California Micro Devices Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : California Micro Devices

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Elvis Jones who wrote (133)	12/1/1999 1:23:00 AM
From: Alan A. Hicks	Read Replies (2) of 168

Duke, I did a valuation analysis on CAMD that shows it should be at least a double from here: CalMicro shares at $8 1/4 currently have a $84 million market capitalization which is just over 2 times current year's estimated revenues of $40 million. CalMicro is now on track to show 30-35 percent growth rates by their March quarter. If they can sustain that rate of growth, CalMicro is undervalued relative to the growth rates of other thick film passives companies. Traditional thick-film passives companies such as AVX or Kemet are selling for about 2.5 times revenues. AVX is a $3 billion company growing about 15 percent per year. Kemet is a $600 million company growing about 20 percent per year. If CAMD turns profitable as expected this quarter and shows 30-35 percent revenue growth by their March quarter, CAMD will be growing twice as fast as the traditional passives companies and it would be reasonable to value CAMD at about twice the valuation of those companies. That would suggest a valuation of about 5 times revenues or about $20 per share. CalMicro could also be viewed more like an analog IC company with unique passives solutions using semiconductor and analog IC expertise. Profitable analog IC companies such as Linear Technology, Maxim, or Burr-Brown sell for between 5 and 20 times revenues. Still another way to value CalMicro would be to value CalMicro's IPD business, growing at a 100 percent annual rate, at 10 times revenues (not giving any value to the rest of the business). CalMicro's IPD business should generate $16 million in revenues this year $32 million next year. That would suggest a current value of $16 and $32 a year from now. If CalMicro begins to win significant cell phone business, CalMicro could also be compared to RF Micro Devices, which is growing at over 100 percent annually and sells at 20 times current revenues. But, at the very least a case can made that CAMD should sell for about double its current valuation. The next several quarters should show very strong comparisons over the previous year so I believe $15-$20 should be a reasonable target over the next year. CAMD now has the wind in its sails with strong industry conditions and growing acceptance of its technology. It will be up to management to carefully execute on its opportunities over the next couple of years. If they do get meaningful design wins in cell phones and begin to be accepted as the technology solution for making high-speed buses really work such as RamBus and others, then a good case could be made much further upside.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next