Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Bottom-Up

<ul><li>Power Integrations, Inc. reported Q1 revenues of $106 million, reflecting a 15% year-over-year increase, aligning with the mid-point of its guidance range.</li><li>The company achieved a non-GAAP EPS of $0.31 and realized a strong cash flow, which supported its strategic decision to repurchase shares amidst market volatility.</li><li>Each of the four primary end markets—consumer, computer, communications, and industrial—witnessed growth.</li></ul>

Power Integrations, Inc. reported Q1 revenues of $106 million, reflecting a 15% year-over-year increase, aligning with the mid-point of its guidance range.The company achieved a non-GAAP EPS of $0.31 and realized a strong cash flow, which supported its strategic decision to repurchase shares amidst market volatility.Each of the four primary end markets—consumer, computer, communications, and industrial—witnessed growth.

Power Integrations: Geographic and Supply Chain Shifts Are Playing A Key Role In Its Growth Strategy!

Asia and Global Semiconductor and Tech Research

Andrew Lu

Thematic (Sector/Industry)

<ul>
<li>Like other automotive/industrial semi vendors, Diodes guides 4Q23 sales of 20% q/q and 35% y/y decline (miss by 21%) and weaker gross margin/operating margin of 35%/7% (miss by 5ppts).</li>
<li>The company sees 4Q23 sales decline of 20% mainly from 19% of automotive and 26% of industrial customers due to customer inventory cut coupled with year-end distributor inventory management. </li>
<li>We expect this adjustment for automotive/industrial IDMs to last for at least 6 months and suggest our clients to avoid these names unless valuation becoming attractive.  </li>
</ul>


Like other automotive/industrial semi vendors, Diodes guides 4Q23 sales of 20% q/q and 35% y/y decline (miss by 21%) and weaker gross margin/operating margin of 35%/7% (miss by 5ppts).
The company sees 4Q23 sales decline of 20% mainly from 19% of automotive and 26% of industrial customers due to customer inventory cut coupled with year-end distributor inventory management. 
We expect this adjustment for automotive/industrial IDMs to last for at least 6 months and suggest our clients to avoid these names unless valuation becoming attractive.  


With No Surprise, Diodes Guides Automotive/Industrial Semi Demand to Fall over 20% Q/Q

<ul><li>Power Integrations, Inc., a company renowned for its high-performance electronic components focused on power conversion, reported its fourth quarter and full-year results, highlighting a mix of challenges and opportunities.</li><li>The company's Q4 revenue reached $105 million, marking an 18% increase year-over-year but a sequential decline of 9%.</li><li>Despite these mixed signals, revenue for 2024 stood at $419 million, reflecting a 6% decrease from the previous year.</li></ul>

Power Integrations, Inc., a company renowned for its high-performance electronic components focused on power conversion, reported its fourth quarter and full-year results, highlighting a mix of challenges and opportunities.The company's Q4 revenue reached $105 million, marking an 18% increase year-over-year but a sequential decline of 9%.Despite these mixed signals, revenue for 2024 stood at $419 million, reflecting a 6% decrease from the previous year.

Power Integrations Powers Up with GaN Breakthroughs—Is It Time To BUY Into the Future?

<ul><li>Power Integrations' latest financial results presented a nuanced picture of their business standing and future outlook.</li><li>In the third quarter, the company reported revenues amounting to $116 million, reflecting a 9% sequential rise.</li><li>However, the forecast for the fourth quarter paints a less optimistic picture, with an anticipated revenue drop to $105 million.</li></ul>

Power Integrations' latest financial results presented a nuanced picture of their business standing and future outlook.In the third quarter, the company reported revenues amounting to $116 million, reflecting a 9% sequential rise.However, the forecast for the fourth quarter paints a less optimistic picture, with an anticipated revenue drop to $105 million.

Power Integrations Inc.: GaN Technology Advancements & Adoption A Vital Tool For Growth! - Major Drivers

<ul>
<li>Microchip used to be the bellwether for semiconductor demand After many semis guided weaknesses in automotive, industrial, and digital consumer much earlier, Microchip's 19% miss in 1Q24 gives no surprise.</li>
<li>
<strong>Why the worst among all?</strong> We attributed Microchip to over 85% of its products on automotive, industrial, and digital consumer. Other semis have higher exposure on PC and comm.</li>
<li>
<strong>Priced in?</strong> We estimate over 20% y/y decline in 2024 sales vs. Bloomberg's -8% y/y. 2024E EPS of US$2.94 is likely below US$1. Price is only 10% below historical peak.</li>
</ul>


Microchip used to be the bellwether for semiconductor demand After many semis guided weaknesses in automotive, industrial, and digital consumer much earlier, Microchip's 19% miss in 1Q24 gives no surprise.

Why the worst among all? We attributed Microchip to over 85% of its products on automotive, industrial, and digital consumer. Other semis have higher exposure on PC and comm.

Priced in? We estimate over 20% y/y decline in 2024 sales vs. Bloomberg's -8% y/y. 2024E EPS of US$2.94 is likely below US$1. Price is only 10% below historical peak.


From the Bellwether to a Lagging Indicator- Why Does Microchip Guide the Worst Among All?

United States

Power Integrations, Inc. designs, develops, and markets analog integrated circuits for use in alternating current (AC) to direct current (DC) power conversion.  The Company sells its products to original equipment manufacturers in the cellular telephone, consumer electronics, personal computer, and industrial electronics industries.

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Power Integrations (POWI US)

Power Integrations: Geographic and Supply Chain Shifts Are Playing A Key Role In Its Growth Strategy!

Power Integrations, Inc. reported Q1 revenues of $106 million, reflecting a 15% year-over-year increase, aligning with the mid-point of its...

Baptista Research

With No Surprise, Diodes Guides Automotive/Industrial Semi Demand to Fall over 20% Q/Q

With No Surprise, Diodes Guides Automotive/Industrial Semi Demand to Fall over 20% Q/Q, margin contraction, and rising months of inventory. We see...

Andrew Lu

Power Integrations Powers Up with GaN Breakthroughs—Is It Time To BUY Into the Future?

Power Integrations, Inc., a company renowned for its high-performance electronic components focused on power conversion, reported its fourth...

Baptista Research

Power Integrations Inc.: GaN Technology Advancements & Adoption A Vital Tool For Growth! - Major Drivers

Power Integrations' latest financial results presented a nuanced picture of their business standing and future outlook. In the third quarter, the...

Baptista Research

From the Bellwether to a Lagging Indicator- Why Does Microchip Guide the Worst Among All?

From the Bellwether to a Lagging Indicator- Why Does Microchip Guide the Worst Among All? For next six months, we like both Intel and Qualcomm more...

Andrew Lu

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