QuickLogic’s common shares will need to reach $23 to achieve average annual stock market performance of 9.0% over the next 6 years. QuickLogic’s stock price will need to reach $27 by 2029 to achieve upper quartile performance. What is the market’s view of QuickLogic’s future operating performance as reflected in the current price of $14?
Executive Summary
- Price Target Research identifies QuickLogic as having: high expected growth, high profitability, above average financial strength, and low stability. A big positive influence on QuickLogic’s valuation is its superior Growth.
- Very high valuation, leading shareholder returns. Current valuation levels are very high relative to the QuickLogic Peer Group. Recent market returns have significantly outperformed the QuickLogic Peer Group. Total shareholder returns expected to significantly lag the overall equity market. Based on current investor expectations, QuickLogic shares should reach a level of $17 by 2029 — an 3.2% per year total shareholder return. A 2029 stock price of $23 would reflect median performance and a price of $27 would be required to reach upper quartile performance.
- Growth has been QuickLogic’s biggest valuation strength. Historical growth has been very high relative to the QuickLogic Peer Group and forecasted growth is relatively very high. Equity Growth, Revenue Growth, and Asset Growth have been superior. These factors have buoyed market perceptions of QuickLogic. QuickLogic’s historical income statement and balance sheet growth are not available. QuickLogic’s consensus growth expectations are higher than historical growth.
- Pretax ROA, and Pretax Margin are group leading. These factors have strengthened market perceptions of QuickLogic. The company has high excess cash and will have to work to reinvest at attractive returns to support profitability and valuation.
- QuickLogic’s risk profile is very favorable. Overall variability has been very low with very low revenue variability, and very high stock price volatility. Financial Strength is relatively high and earnings’ expectations are only average. The debt/capital ratio has declined very significantly.
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