In today’s briefing:
- Astera Labs IPO Valuation Update: Multiples Appear Rich, Limited Post-IPO Upside
- Iberdrola/Avangrid: Logical Move
- Permian Resources Corporation: Initiation Of Coverage – 5 Major Drivers
- Karuna Therapeutics: Is The Bidding Battle Underway?
- Skechers U.S.A.: Does The Recovery In Wholesale Orderbook Warrant A Bullish Thesis? – Major Drivers
- Monolithic Power Systems: Increasing Power Requirements for Newly Introduced AI Products Changing The Game! – Major Drivers
- The J. M. Smucker Company: Initiation Of Coverage – Core Business Strategy & 5 Key Performance Drivers – Financial Forecasts
- Nutanix Inc.: What Are The 3 Biggest Challenges On Its Path? – Major Drivers
- Autodesk Inc.: Implementation of The New Transactional Model A Potential Game Changer? – Key Drivers
- Culp, Inc. – Lower Near-Term Expectations; Culp Likely to Restructure
Astera Labs IPO Valuation Update: Multiples Appear Rich, Limited Post-IPO Upside
- Astera Labs, which offers connectivity solutions tailored for AI accelerators, GPUs, FPGAs and other high-performance computing platforms, announced terms for its IPO today.
- California-Based semiconductor company plans to raise ~$392M by offering ~14.8M shares at a price range of $27 to $30. Selling stockholders offer ~3M shares of common stock in this IPO.
- At the midpoint of the proposed price range, Astera Labs would command a fully diluted market value of $5B, above their last private round of $3.15B.
Iberdrola/Avangrid: Logical Move
- Iberdrola SA (IBE SM) launches a $34.25/share cash offer to acquire the minorities (18.4%) in its US subsidiary Avangrid (AGR US). Premium is 6.8%, and the cost c. $2.5 billion.
- The market was awaiting this move since the cancellation of the PNM deal, which explains the recent rise in the share price of Avangrid.
- Gross spread is 4.5%. It seems investors are buying in the hope of an offer sweetening, knowing that Iberdrola has some cash available to spend from the profitable Mexico exit.
Permian Resources Corporation: Initiation Of Coverage – 5 Major Drivers
- This is our first report on Permian Resources, a Delaware-based independent oil and natural gas company.
- The company reported its Q4 and full-year 2023 earnings with significant growth and progress.
- The company finished the year delivering industry-leading returns, exceeding both internal and external expectations.
Karuna Therapeutics: Is The Bidding Battle Underway?
- In December 2023, American multinational pharmaceutical company Bristol Myers Squibb has agreed to acquire Karuna Therapeutics for $330 per share in cash, implying a total equity value of $14B.
- The special meeting of Karuna’s shareholders to be held on March 12, 2023, to consider and vote on various proposals necessary to approve upcoming M&A deal.
- I expect the bidding battle among big pharma to acquire Karuna Therapeutics and its valuable pipeline of transformative medicines to treat schizophrenia and psychosis in Alzheimer’s disease.
Skechers U.S.A.: Does The Recovery In Wholesale Orderbook Warrant A Bullish Thesis? – Major Drivers
- Skechers ended the 2023 fiscal year on a high note, reaching an annual sales record of $8 billion, a $556 million increase compared to the prior year.
- This milestone was the result of four quarterly sales records, including $1.96 billion for the fourth quarter.
- The company also achieved an annual gross margin record of 51.9%.
Monolithic Power Systems: Increasing Power Requirements for Newly Introduced AI Products Changing The Game! – Major Drivers
- Monolithic Power Systems (MPS) enters 2024 with a cautiously optimistic outlook, following a record revenue of $1.82 billion for the full year of 2023, marking its 12th consecutive year of revenue growth.
- The highlights of MPS’ performance in 2023 were the consistent execution, continuous innovation, and robust customer focus.
- However, the visibility beyond the current quarter remains limited due to uncertain customer ordering patterns reflecting overall economic uncertainty.
The J. M. Smucker Company: Initiation Of Coverage – Core Business Strategy & 5 Key Performance Drivers – Financial Forecasts
- This is our first report on food and beverage major, J. M. Smucker.
- In its 3rd quarter earnings for fiscal year 2024, J. M. Smucker Company (Smucker) effectively outlined promising growth indicators across its portfolio, validated the strategic maneuvering of its product mix, and reaffirmed confidence in its forecasting.
- On the surface, company executives displayed a marginal optimism, with the company reporting 6% comparable sales growth.
Nutanix Inc.: What Are The 3 Biggest Challenges On Its Path? – Major Drivers
- Over the quarter, Nutanix reported record revenue of $565 million, which surpassed guidance expectations, as well as an impressive annual recurring revenue (ARR) increment of 26% YoY reaching $1.74 billion.
- Besides solid financial performance, the company also accomplished its first GAAP operating profitability in Q2 which showcased the effective workings of their subscription model.
- Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.
Autodesk Inc.: Implementation of The New Transactional Model A Potential Game Changer? – Key Drivers
- Autodesk demonstrated strong performance in the fourth quarter and full year results of fiscal 2024 with 14% constant currency revenue growth in Q4.
- The report reflects Autodesk’s resilience and discipline manifested through its subscription business model, product diversification, and robust customer base.
- The company’s diversified consumer base spans various regions and industries, enabling balanced growth.
Culp, Inc. – Lower Near-Term Expectations; Culp Likely to Restructure
- We are cutting estimates on Culp, responding to weak demand, and bracing for a restructuring in 4QFY24.
- Culp’s 3QFY24 earnings report, issued Wednesday after the close, highlighted improved revenue and operating results, Y/Y and sequentially.
- Consolidated sales were $60.4 million, up 15% Y/Y and 3% sequentially, aided by a calendar shift in the Chinese New Year from 3Q to 4Q.
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