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Everspin Stock Is a Winner, But How Much Higher Can It Go?

It’s safe to assume, Everspin Technologies (MRAM) investors enjoyed a few celebratory drinks on the weekend. Shares of the semiconductor player saw out last week with a 64% gain in Friday’s session after the company’s Q3 earnings impressed on all fronts. It also doesn’t hurt that the stock climbed another 13.59% Monday.

So what’s all the excitement about?

Everspin generated revenue of $14.8 million, amounting to a 46.5% year-over-year uptick and beating the Street’s forecast by $2.6 million. GAAP EPS hit $0.05, $0.10 above the consensus estimate.

Where so many have stumbled lately, Everspin delivered too; the company’s Q4 guidance calls for revenue between $16.25 million to $17.25 million and EPS of $0.05 at the mid-point. The street was expecting $12.75 million and $0.01, respectively.

The market is evidently showing an appetite for Everspin’s magnetoresistive random access memory (MRAM) products, as noted by Needham analyst Rajvindra Gill.

“Toggle MRAM continues to set quarterly revenue records, driven by demand in industrial robotics, aerospace (U.S. Govt. contract revenues hitting the top line this quarter) and automotive (deal signed with EV maker Lucid), and the backlog remains very high with the company being 100% booked the last 2 quarters,” the 5-star analyst said. “Additionally, IP licensing deals are bringing in revenue, with more expected in Q4.”

The company has not been totally immune to the supply chain constraints, which have led to gross margins come under pressure. However, they have remained around 58%, a “healthy” level Gill expects them to stay at.

Due to the accelerated demand for both products and IP, Gill has raised CY22’s revenue estimates from $53 million to $60 million while analyst’s EPS forecast rises from $0.01 to $0.15. 

Accordingly, there is also a price target hike; the figure moves from $10 to $12. However, after the recent share rally, his target implies a modest downside. It will be interesting to see whether the analyst downgrades his rating or upgrades his price target over the coming months. (To watch Gill’s track record, click here)

Some stocks fly under Wall Street’s radar and Everspin appears to be once such name at present with Gill’s review the only one on record. It will also be interesting to see if other analysts start covering this name following the latest set of impressive results. (See Everspin stock analysis on TipRanks)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.