On Friday, Navitas Semiconductor's (NASDAQ:NVTS) stock price target was reduced to $10 from the previous $11 by an analyst at Craig-Hallum, while the Buy rating for the stock was reaffirmed. The adjustment follows the company's announcement of a strong sales performance at the close of Calendar Year 2023, particularly in the Mobile sector.
Still, the first half of 2024 is expected to see a slower start than initially anticipated, with emerging headwinds in most markets except Mobile.
The company has revised its growth expectations for Calendar Year 2024 to a range of 40-50% year-over-year, which is a decrease from the consensus estimate of 62% year-over-year growth. This new projection is intended to establish a foundation for the stock's value.
Despite the attention on Navitas's achievements in the AI sector, where it has secured design wins for high power power supply units, the analyst highlighted the significant progress in other end markets such as solar, appliances, and electric vehicles as potentially larger contributors to the company's stock performance.
Navitas Semiconductor is recognized for its leadership in gallium nitride (GaN) technology and possesses strong silicon carbide (SiC) technology, which it can uniquely combine. This positions the company as a high-growth entity in the small-cap market, with expectations to sustain a growth rate of 40-50% over the coming years.
The importance of power efficiency is on the rise across various markets, and Navitas is at the forefront of this trend.
The analyst anticipates that Navitas Semiconductor will reach a breakeven point within the next two years. The company's solid balance sheet is expected to support substantial investment, making it an attractive option for growth managers.
Despite the lowered price target, the firm's outlook on Navitas remains optimistic, with a continued recommendation to buy.
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