Benchmark maintains Buy on Indie Semiconductor shares

On Wednesday, Benchmark reiterated a Buy rating on Indie Semiconductor Inc (NASDAQ:INDI), with a steady price target of $6.00. The stock, currently trading at $2.45, has seen significant volatility, declining over 60% in the past year. According to InvestingPro analysis, the company appears to be trading below its Fair Value. Indie Semiconductor has announced its intention to divest its 34.38% equity stake in its Chinese subsidiary, Wuxi indie Microelectronics Technology Co. The sale is to United Faith Auto Engineering, a company listed in China. Although Indie Semiconductor holds a minority interest, it possesses 59% of the voting rights, enabling it to fully consolidate Wuxi’s financials.

The analyst from Benchmark highlighted the strategic move by Indie Semiconductor, noting the significance of the company’s control over Wuxi’s voting rights despite a minority equity share. The consolidation of financials has been possible due to this control. InvestingPro data reveals the company’s challenging financial position, with negative EBITDA of $113.78 million and rapidly depleting cash reserves, though its current ratio of 5.3 indicates strong short-term liquidity. The transaction between Indie Semiconductor and United Faith Auto Engineering is not yet finalized, as it is subject to a non-binding agreement and is expected to be completed by the end of calendar year 2025 or early 2026.

The decision to sell the equity interest in Wuxi indie Microelectronics is a notable step for Indie Semiconductor, which is actively engaged in the semiconductor industry. The company’s strategic maneuvers are closely watched by investors and analysts, given the critical role semiconductors play in various technology sectors.

This move comes at a time when the global semiconductor landscape is undergoing significant shifts, with companies constantly looking for ways to streamline operations and focus on core competencies. Indie Semiconductor’s planned divestiture of its stake in the Chinese subsidiary is part of this broader industry context.

Investors and stakeholders of Indie Semiconductor are expected to keep a close eye on the progress of this transaction, as it moves towards a finalized agreement. The closure of this deal could have implications for the company’s financial structure and strategic direction moving forward. With analyst price targets ranging from $4 to $6, and 13 additional exclusive ProTips available on InvestingPro, subscribers can access comprehensive analysis including the detailed Pro Research Report, which provides deeper insights into the company’s strategic positioning and growth potential.

In other recent news, Indie Semiconductor has reported its first-quarter 2025 earnings, revealing a larger-than-expected net loss and revenue that fell short of forecasts. The company posted earnings per share of -$0.18, missing the anticipated -$0.08, with revenue at $54.1 million, below the projected $55.94 million. Despite a 3.3% year-over-year revenue increase, the results did not meet market expectations. Following these earnings, KeyBanc Capital Markets adjusted its outlook on Indie Semiconductor, lowering the price target from $7.00 to $6.00, while maintaining an Overweight rating. The adjustment comes in response to the company’s mixed first-quarter results and lower-than-expected second-quarter guidance. Indie Semiconductor is facing challenges due to increased tariffs affecting the auto sector, leading to a restructuring plan aimed at reducing operating expenses by 24% by the fourth quarter of 2025. KeyBanc remains optimistic about the company’s long-term prospects, particularly highlighting the potential revenue contribution from its radar and vision programs expected to ramp up in the latter half of 2025. Despite the current setbacks, the firm anticipates sustainable long-term performance for Indie Semiconductor.

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