Intel stock extends gains after report of possible U.S. government stake
Investing.com - Alpha & Omega Semiconductor (NASDAQ:AOSL) received an upgrade from Stifel on Tuesday, with its rating raised from Sell to Hold and its price target increased to $25.00 from $18.00.
The upgrade follows the company’s announcement of the sale of its China joint venture stake for $150 million in cash. The transaction values the entire JV at approximately $738.9 million, with Alpha & Omega’s remaining 18.9% equity ownership valued at roughly $139.7 million.
Stifel notes that while the sale reduces the book value of the JV by approximately $65 million (about 18%), the company’s pro forma net cash position would improve to $7.50 per share from $3.89 per share.
The research firm believes the risk-reward profile for Alpha & Omega shares is now "relatively balanced" due to three key factors: a materially improved balance sheet upon closing the transaction, reduced exposure to the competitive Chinese foundry market, and improved downside protection with the stock trading at approximately 3.6 times pro forma net cash.
Stifel’s new $25 price target is based on an enterprise value to sales multiple of 0.9 times its calendar year 2026 sales estimate, which represents about 2.3 times the company’s pro forma net cash per share.
In other recent news, Alpha and Omega Semiconductor reported its Q3 FY2025 earnings, revealing a non-GAAP EPS of -$0.10, which fell short of the forecasted $0.0033. The company also reported revenue of $164.6 million, slightly below the expected $167.77 million. Despite the earnings miss, Alpha and Omega Semiconductor experienced a 9.7% year-over-year revenue increase, with notable growth in computing and power supply sectors. In a separate development, the company announced an agreement to sell 20.3% of its joint venture in Chongqing, China, for $150 million in cash, expected to close by the end of 2025.
Additionally, Alpha and Omega Semiconductor has reached a $4.25 million settlement with the U.S. Department of Commerce’s Bureau of Industry and Security over export control practices. The company also introduced a new 25V MOSFET featuring advanced packaging for data centers, highlighting its focus on high-power density applications. Meanwhile, Stifel analysts maintained a Sell rating on Alpha and Omega Semiconductor, citing limited near-term gross margin expansion despite a recent revenue beat. The company plans to use proceeds from the joint venture sale to invest in technology and research, aiming to expand its product portfolio.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.