Alpha and Omega (AOSL) AI Stock Analysis

• Market Cap: $688.65M
• Dividend Yield: N/A
• Average Volume (3M): 560.73K
• Price to Earnings (P/E): ―
• Beta (1Y): 2.06
• Revenue Growth: 3.57%
• EPS Growth: -134.36%
• Country: US
• Employees: 2,332
• Sector: Technology
• Sector Strength: 76
• Industry: Semiconductors
• EPS (TTM): -0.10
• Shares Outstanding: 29,759,995
• 10 Day Avg. Volume: 372,698
• 30 Day Avg. Volume: 560,728
• PEG Ratio: 1.42
• Price to Book (P/B): 0.70
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 20.64
• Enterprise Value/Market Cap: 0.75
• Enterprise Value/Revenue: 0.20
• Enterprise Value/Gross Profit: 3.20
• Enterprise Value/Ebitda: 2.82
• 1Y Price Target: $26.67
• Price Target Upside: 15.25% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

Alpha and Omega Semiconductor demonstrates robust growth in certain segments and maintains financial stability, but faces significant profitability challenges that impact its valuation and overall stock performance. Strong growth projections in computing and AI, alongside improved cash flow management, provide optimism, though negative earnings and segment-specific setbacks require cautious consideration.

Positive Factors

Design Wins

Investors will appreciate the firm’s first data center GPU design win, which has begun initial shipments and are expected to ramp through the year.

Earnings and Guidance

AOSL delivered solid March quarter results and better than expected guidance with tariff driven demand pull forward in the Computing segment partially contributing to the outperformance.

Market Position

AOSL is becoming the industry leader in the battery PCM market, driven by strong performance from Tier 1 U.S. smartphone customers and Chinese handset OEMs.

Negative Factors

Gross Margin

Gross margin was the only area of disappointment due to the high margin engineering services agreement ending in mid-February and the lack of fixed costs absorption on the Lunar Holiday closure.

Price Target

The price target is being lowered to $32 from $42 to reflect a modestly more cautious revenue trajectory near-term.

Alpha and Omega Business Overview & Revenue Model

Company Description

Alpha and Omega Semiconductor Limited (AOSL) is a global leader in the design, development, and supply of a broad range of power semiconductors. These semiconductors are critical components that enhance energy efficiency in electronic systems. The company's product portfolio includes power MOSFETs, IGBTs, TVS diodes, and digital power products, which are utilized in various applications such as consumer electronics, computing, communication, and industrial equipment. AOSL is recognized for its innovative solutions and commitment to delivering high-performance, cost-effective products to its diverse client base.

How the Company Makes Money

Alpha and Omega Semiconductor Limited generates revenue through the sale of its power semiconductor products. The company's primary revenue streams include direct sales to original equipment manufacturers (OEMs) and sales through distribution channels. AOSL's products are integrated into a wide array of electronic devices and systems, which ensures a steady demand across different industry sectors. The company also engages in strategic partnerships and collaborations to enhance its market reach and product offerings. Factors such as technological advancements, increased demand for energy-efficient solutions, and a strong focus on research and development contribute significantly to its earnings.

Alpha and Omega Financial Statement Overview

Summary

Alpha and Omega faces challenges in profitability and revenue stability, evidenced by negative margins and declining revenue. The balance sheet is a relative strength, with low leverage and a strong equity position. Cash flow improvements are promising but may not be sustainable without addressing underlying profitability issues. Continued focus on operational efficiency and strategic growth initiatives will be crucial for enhancing financial performance.

Income Statement

The income statement reveals declining revenue and profitability. The TTM (Trailing-Twelve-Months) data shows a negative net income with a net profit margin of -3.46%, indicating financial struggles. Revenue growth has been erratic, with a notable decline compared to previous years. The gross profit margin has decreased, reflecting rising costs or pricing pressures. EBIT and EBITDA margins have also been negative, highlighting operational challenges.

Balance Sheet

The balance sheet shows a strong equity position with a debt-to-equity ratio of 0.07, indicating low leverage. The equity ratio of 79.58% suggests a healthy balance with significant assets funded by equity. However, declining equity compared to total assets may pose future risks if profitability issues persist. The company maintains a stable cash position, which provides some financial flexibility.

Cash Flow

Cash flow analysis indicates some positive trends with a free cash flow growth rate of 499.22% in the latest TTM period, showing improvement from prior negative figures. The operating cash flow to net income ratio is 2.62, suggesting efficient cash generation relative to net income. However, the company's ability to sustain this cash flow growth remains uncertain given the volatile net income performance.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
666.40M	657.27M	691.32M	777.55M	656.90M	464.91M
	Gross Profit
161.53M	171.92M	199.54M	268.56M	204.54M	102.73M
	EBIT
-18.16M	-3.76M	22.53M	102.04M	11.39M	-13.34M
	EBITDA
39.36M	49.40M	65.74M	144.89M	116.76M	31.15M
	Net Income Common Stockholders
-23.05M	-11.08M	12.36M	453.16M	58.12M	-18.26M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
182.59M	175.13M	195.19M	314.35M	202.41M	158.54M
	Total Assets
1.13B	1.15B	1.20B	1.30B	918.57M	792.94M
	Total Debt
59.21M	67.21M	78.80M	98.77M	201.56M	206.40M
	Net Debt
-123.38M	-107.92M	-116.38M	-215.58M	-851.00K	47.87M
	Total Liabilities
231.36M	253.41M	315.82M	444.54M	402.25M	361.05M
	Stockholders Equity
902.58M	891.61M	883.92M	854.09M	373.20M	293.69M
Cash Flow		Free Cash Flow
31.00M	-11.38M	-89.95M	80.85M	56.04M	-83.00K
	Operating Cash Flow
60.47M	25.71M	20.47M	218.87M	128.74M	62.31M
	Investing Cash Flow
-28.41M	-35.74M	-109.63M	-130.82M	-72.54M	-60.85M
	Financing Cash Flow
-11.49M	-9.90M	-29.61M	21.85M	-18.99M	37.65M

Alpha and Omega Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 23.14
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AOSL, the sentiment is Neutral. The current price of 23.14 is above the 20-day moving average (MA) of 20.42, above the 50-day MA of 22.43, and below the 200-day MA of 33.10, indicating a neutral trend. The MACD of 0.50 indicates Negative momentum. The RSI at 56.11 is Neutral, neither overbought nor oversold. The STOCH value of 74.07 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for AOSL.

Alpha and Omega Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IMOS	71 Outperform	$687.08M	19.53	4.64%	4.41%	-0.41%	-47.27%
AOSL	66 Neutral	$688.65M	―	-2.55%	―	3.57%	-134.36%
COHU	62 Neutral	$826.12M	―	-9.87%	―	-30.75%	-3668.44%
Sector *	60 Neutral	$11.59B	10.39	-7.23%	2.94%	7.46%	-10.76%
CEVA	54 Neutral	$507.74M	―	-2.51%	―	13.09%	46.89%
ICHR	52 Neutral	$624.39M	―	-2.35%	―	13.41%	72.56%
AAOI	48 Neutral	$1.04B	―	-68.45%	―	50.30%	-111.11%

Alpha and Omega Corporate Events

Alpha and Omega Announces Leadership Restructuring

On March 3, 2025, Dr. Mike F. Chang resigned as Executive Chairman of Alpha & Omega Semiconductor Limited but will continue as a director and Chairman of the Board and has been appointed as Executive Vice President of Strategic Initiative. His compensation was adjusted, with a reduced base salary and target annual cash bonus, alongside an award of restricted share units. Additionally, the company announced an executive bonus plan for 2025, linking executive bonuses to the attainment of specific non-GAAP earnings per share and revenue goals, with varying bonus percentages based on performance levels.