LRCX Stock Forecast: Embracing Double-Digit Growth

March 22, 2024
Meiru ZhongThis LRCX Stock Forecast article was written by Meiru Zhong – Financial Analyst at I Know First.

Summary

  • The decreased sales of wafer fabrication equipment (WFE) were mainly driven by the weakened customer demand, especially in the memory market, and trade restrictions on sales of specific products and services to China.
  • By the end of the December quarter of 2023, LRCX earned a total revenue of $3.76 billion, reduced by 28. 8%. Its system revenue dropped by 35.2% and customer support-related revenue decreased by 15.7% compared with the last December quarter.
  • The company differentiates products and services by focusing on multiple available market expansion opportunities and gets closer to customers by processing development capabilities near customers and manufacturing, including the Malaysia facility.
  • Lam Research has outperformed and remained resilient in spite of the slowing economy, as the revenue growth rate is almost double the growth rate expected by the World Semiconductor Trade Statistics.
  • DCF Values LRCX at $1,023, an upside potential of 8% compared with the stock price of $949.08 on March 20, 2024.

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SAIA Stock Forecast: Thriving in the Post-Yellow Corp. Era

January 31, 2024
Meiru ZhongThis SAIA Stock Forecast article was written by Meiru Zhong – Financial Analyst at I Know First.

Summary

  • Yellow Corp., the third-largest player in the LTL industry, filed for bankruptcy in July 2023, presenting an opportunity for SAIA to expand its business and increase sales by tapping into its market share.
  • Saia's Q3'23 financial report showed robust performance, marked by significant increases in LTL volume and tonnage.
  • Flat operating margins reflected rising expenses, particularly in salaries, wages, and employee benefits. The company increased transportation miles and workforce utilization to manage costs.
  • Saia demonstrated financial strength with a current ratio of 2.16 and debt-to-EBITDA ratio of 0.24, outperforming peers in the LTL industry. Its sufficient capital resources facilitated its strategic expansion and sustained operation.
  • DCF supports the $511 target stock price for Saia, Inc., 13% upside potential from the January 29, 2024 price of $450.15.

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AMD Stock Forecast: Overcoming Challenges and Embracing

December 25, 2023
Meiru ZhongThis AMD Stock Forecast article was written by Meiru Zhong – Financial Analyst at I Know First.

Summary

  • AMD faced challenges in the first nine months of 2023, with lower sales of key processors and increased R&D investment, partially offset by positive contributions from Radeon GPU sales, product mix adjustments, and the inclusion of Xilinx.
  • AMD's strategic focus on high-performance and adaptive computing technology, reflected in a $4.4 billion investment in R&D for the nine months of 2023.
  • AMD’s Q3 2023 highlighted a strong cash position of $5.8 billion for future stock buyback and a robust industry outperformance.
  • DCF valued AMD at $143, a 6% upside potential compared to $135.47 on December 20, 2023. 

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GOOG Stock Forecast: A Tale of Thriving Revenue

November 20, 2023
Meiru ZhongThis GOOG Stock Forecast article was written by Meiru Zhong – Financial Analyst at I Know First.

Summary

  • Alphabet earned revenue of US$76.7 billion, growing by 11% in Q3 2023 compared to Q3 2022. The operating income also grew by 24.6% to $21.3 billion because of strong demands for products and services and robust cost control.
  • Google advertising had grown by 9% to $59,647 million in Q3’23 compared to last year. The growth was primarily driven by the increase in the number of users’ engagement and the average amount charged for advertisers for each click in Google Search & other properties (including YouTube) and offset by the decrease in the number of impressions and the average amount charged for each impression in Google Network.
  • Alphabet's cost structure was robust, and its cost of revenue and operating costs had a stable proportion of the total revenue, about 44% and 29% respectively in Q3’23.
  • GOOG repurchased US$15.9 billion shares in the third quarter and invested $8.1 billion capital expenditure in technical infrastructure for business expansion, signaling managers’ strong confidence. 
  • DCF valued GOOG at $142, a 4% upside potential compared to $136.94 on November 18, 2023.

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CHTR Stock Forecast: Robust and Scalable Business

October 23, 2023
Meiru ZhongThis CHTR Stock Forecast article was written by Meiru Zhong – Financial Analyst at I Know First.

Summary

  • CHTR earned revenue of $13.66 billion growing by 0.5% in Q2 2023 compared to Q2 2022. The net income decreased by 16.9% to $1.22 billion, mainly due to the higher interest expense and losses on investments.
  • Residential Internet and Commercial businesses contributed most to the total revenue and maintained a continuous and stable growth rate. Mobile business has the greatest growing potential and the rapid growth is expected to sustain in the next few years.
  • CHTR’s current strategy is focused on evolution, expansion, and execution. Specifically, evolution includes Spectrum One, Multi-gigabit Speed Program, and Xumo while expansion is about rural builds to tap into unserved and underserved areas.
  • CHTR has a moderate Performance compared with Peers in the telecommunication service industry. But its liquidity and solvency risks are worth noting as the expected debt needed to be paid will be half or even more than EBIT in the next few years. 
  • DCF values CHTR at $483, with an upside potential of 10%, compared with the stock price of $440.80 on October 19, 2023

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ASML Stock Forecast: A Monopoly with Higher Upside

September 7, 2023
Meiru ZhongThis ASML Stock Forecast article was written by Meiru Zhong – Financial Analyst at I Know First.

Summary

  • The increased sales of EUV and DUV were mainly driven by the strong demand of chipmakers due to digital transformation and chip shortage.
  • ASML is a monopoly on the manufacturing of EUV lithography machines and it has a strong pricing power that the price per EUV had increased by 22% to €176.1 million from 2020 to 2022.
  • ASML has a strong competitive position in the semiconductor industry, with low threats of rivals, new entrants, and substitutes, and low bargaining power of customers and suppliers. It has over 90% market share of the lithography market and 100% share of the EUV market.
  • EUV 0.55 NA, the next generation of the EUV system and promising engine of revenue growth, is expected to ship to customers for R&D purposes at the end of 2023 and support high-volume manufacturing by 2025. 
  • DCF Values ASML at $696, an upside potential of 4% compared with the stock price of $666.04 on September 6, 2023

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META Stock Forecast: Pioneer to New Heights

August 14, 2023
Meiru ZhongThis META Stock Forecast article was written by Meiru Zhong – Financial Analyst at I Know First.

Summary

  • The underperformance in 2022 was attributed to significant currency risks, reduced advertising demand, and strict regulation on target advertising.
  • The advertising revenue is resilient and a good sign shows that advertisers have a strong demand as the economy recovers from COVID and the recession.
  • Restructuring, by implementing a series of cost management practices, reflects META's determination to align business and strategic priorities for operating efficiency.
  • Although it’s difficult to depict how the metaverse will develop and the operating losses kept increasing for Reality Labs, META expects this will be the next chapter of the Internet and will unlock monetization chances.  
  • DCF estimates META stock will grow to $313, an 4% upside potential for the year 2023.

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