Shares of indie Semiconductor (INDI) have performed very well over the past three months, rising by 46.8%.
I believe that the existence of solid catalysts will likely send this share price to higher levels. Thus, I am bullish on this stock. (See Analysts’ Top Stocks on TipRanks)
Based in Aliso Viejo, California, indie is a global provider of semiconductors and related software solutions, currently supplying the largest operators in the automotive industry, and most popular original equipment manufacturers (OEMs) worldwide.
Its solutions are applied to advanced driver assistance systems, including light detection and ranging, and to connected cars with remote or cloud-based data centers.
OEMs use indie’s technologies to produce several electrification applications such as lighting, personal device connectivity and charging, which are found in the cabin of vehicles.
Most Recent Quarter
In the second quarter of 2021, total revenue hit a record amount of $9.2 million as a result of growing demand. It represented a nearly 150% increase year-over-year.
The adjusted gross margin also grew by 140 basis points year-over-year, up to a 42.1% rate of total revenue.
Due to higher spending in research and developments and the sustainment of costs connected with the IPO, the adjusted operating loss more than doubled to $9.6 million.
Acquisition Pipeline, Growth Prospects
In the final quarter of 2021, indie should complete the acquisition of TeraXion, a designer of optical sensing, holding over 30 patents globally. From Analog Devices (ADI), indie is on track to acquire the development of radar hardware and software solutions for emerging safety system applications.
Through these two deals, indie is aiming to strengthen its position in the light detection and ranging market, and in the radar market. Both are fast-growing markets opening up to higher fortune in the automotive global industry.
As a supplier of the most popular vehicle manufacturers and OEMs, indie is well-positioned to capitalize on the increasing adoption of electrification across the automotive industry, and the growing demand for architectures that promote vehicle interactivity with its user.
The company is expected to continue to improve its turnover and profitability, which, in turn, should produce a positive fallout on the share price.
Wall Street’s Take
In the past three months, three Wall Street analysts have issued a 12-month price target for INDI.
The average indie Semiconductor price target is $16.67, implying 24% upside potential. The analyst rating consensus is a Strong Buy rating, based on three Buy ratings.
Summary
The climate urgency has imposed governments around the world to promote the adoption of electrification. Users want to have absolute command of their vehicles.
This will guarantee a robust demand for integrated automotive semiconductors, and software solutions for indie and other operators.
Disclosure: At the time of publication, Alberto Abaterusso did not have a position in any of the securities mentioned in this article.
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