On Tuesday, Northland initiated coverage on shares of QuickLogic (NASDAQ: NASDAQ:QUIK), a supplier of field-programmable gate array (FPGA) intellectual property (IP), chiplets, and chips. The firm set an Outperform rating for the stock, along with a price target of $11.60.
Currently trading at $8.09, the stock has shown significant momentum with a 9.2% gain over the past week, according to InvestingPro data. The rationale behind this decision stems from QuickLogic's involvement in the aerospace and defense industry, as well as critical infrastructure sectors that require specialized technology such as radiation-hardening, extended temperature ranges, and secure supply chains.
The analyst from Northland highlighted the importance of QuickLogic's niche in the FPGA market, which is expected to expand due to increasing geopolitical tensions and the strategic importance of space.
InvestingPro data shows the company's revenue grew by 23% in the last twelve months, with analysts expecting profitability this year despite current market volatility. Get access to 10+ additional ProTips and comprehensive analysis with an InvestingPro subscription.
The term "Cold War 2.0" was used to describe the current international climate, which involves a race for technological supremacy and the potential militarization of outer space. These factors are believed to drive demand for the specialized products that QuickLogic provides.
QuickLogic's offerings are tailored to meet the stringent requirements of their target markets, ensuring functionality under extreme conditions and maintaining a secure supply chain. This focus on reliability and security in essential sectors is a key factor in the positive outlook provided by Northland.
The Outperform rating indicates that Northland sees QuickLogic's stock performing better than the average stock within the analyst's coverage universe. The price target of $11.60 suggests a level of confidence in the company's growth prospects and its ability to capitalize on the current market dynamics.
The coverage initiation by Northland provides investors with an overview of QuickLogic's strategic position in a specialized and growing segment of the technology market. The Outperform rating and price target reflect an expectation of the company's performance amid the challenges and opportunities presented by the evolving geopolitical landscape.
Based on InvestingPro's Fair Value analysis, the stock appears overvalued at current levels, though analyst targets range from $10 to $13. Dive deeper into QuickLogic's potential with InvestingPro's exclusive Research Report, featuring comprehensive analysis of this and 1,400+ other US stocks.
In other recent news, QuickLogic Corporation reported its Q3 2024 earnings results, revealing a year-over-year revenue dip to $4.3 million. Despite this, the company expects an increase in Q4 revenue to around $6 million, primarily due to IP contract delays. QuickLogic also reported a non-GAAP net loss of $0.9 million for Q3 and projects Q4 cash usage to be under $500,000.
In further developments, QuickLogic is focusing on eFPGA Hard IP optimized for Intel (NASDAQ:INTC) 18A, anticipating growth in shipments of its EOS S3 chips. The company has also expanded its distribution agreements internationally and renewed an OEM agreement with Synopsys (NASDAQ:SNPS).
QuickLogic is positioned to capture opportunities in the eFPGA market after the acquisition of competitor Flex (NASDAQ:FLEX) Logix by Analog Devices (NASDAQ:ADI). The company also anticipates growth in 2025 due to a more diversified customer base and favorable market conditions. However, it refrained from providing a full year revenue model for 2025, citing uncertainty in quarterly performance.
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