Stock Alert for Netlist Inc. (NLST)
Netlist Inc. (NASDAQ: NLST)
Netlist Inc. (NLST) designs, manufactures and sells memory subsystems primarily for the server, high-performance computing and communications markets. The Company’s memory subsystems consist of dynamic random access memory integrated circuits (DRAM ICs), NAND flash memory (NAND) and other components assembled on a printed circuit board (PCB). The Company also designs custom semiconductor logic devices, which are integrated into its memory subsystems. Net sales to the two customers: Dell and Hewlett Packard, represented approximately 90% of the Company’s net sales during the fiscal year ended January 3, 2009, (fiscal 2008). Net sales to some of its original equipment manufacturer (OEM) customers include memory modules that are qualified by NLST directly with the OEM customer and sold to electronic manufacturing services providers (EMSs), for incorporation into products manufactured exclusively for the OEM customer.
The Company was founded in 2000 and is headquartered in Irvine, California.
| Share Statistics (Jul-7-10) | FY
2007 |
FY
2008 |
%
Chg |
Q4 2008 | Q4 2009 | %
Chg |
||
| Symbol | NLST | Revenue, $Mn | 100.1M | 67.0M | 33.1% | 6.60M | 6.70M | 1.5% |
| Current price | $2.78 | Gross marg. | 8.8% | 11.3% | 28.4% | -4.2% | 25.4% | 704.8% |
| 52wk Range: | $7.98-0.30 | Oper. margin | -11.8% | -18.3% | 55.1% | -75.8% | -43.3% | 42.9% |
| Avg Vol (3m): | 82,450,000 | Net margin | -7.4% | -22.7% | 206.8% | -75.2% | -44.8% | 40.4% |
| Market Cap. | 70.24M | |||||||
| Shares Outst. | 24.2M | EPS, $ | -0.38 | -0.77 | 102.6% | -0.25 | -0.15 | 40.0% |
Source: Reuters.com, SEC Filings.
Financial Summary
Revenues for the first quarter ended April 3, 2010, were $7.9 million, up 265% from revenues of $2.2 million for the first quarter ended April 4, 2009. Sequentially, revenues improved 17.8% from the $6.7 million in revenues for the fourth quarter ended January 2, 2010. Gross profit for the first quarter ended April 3, 2010, was $1.8 million, or 23.0% of revenues, compared to a gross loss of $537,000, or negative 24.8% of revenues for the first quarter ended April 4, 2009.
Net loss for the first quarter ended April 3, 2010, was $3.0 million, or $0.14 loss per share, compared to a net loss in the prior year period of $3.8 million, or $0.19 loss per share. These results include stock-based compensation expense in the first quarter ended April 3, 2010, of $382,000 compared with $307,000 in the prior year period.
The Company sold 4.6 million shares of common stock in a registered public offering in March 2010. The shares were sold to the public at a per share price of $3.85. The Company received net proceeds of $16.3 million, after underwriting discounts and commissions, and estimated expenses payable by the Company.
As of April 3, 2010, cash, cash equivalents and investments in marketable securities were $26.4 million, total assets were $41.9 million, working capital was $27.5 million, total debt was $125,000, and stockholders’ equity was $33.0 million.
| Financial Strength (Jul-7-2010) | Company | Industry | Sector | S&P 500 |
| Quick Ratio (MRQ) | 3.67 | 0.49 | 1.33 | 0.76 |
| Current Ratio (MRQ) | 4.11 | 0.59 | 1.55 | 0.91 |
| Long-Term Debt to Equity(MRQ) | 0.07 | 6.98 | 16.89 | 138.08 |
| Total Debt to Equity (MRQ) | 0.38 | 11.10 | 27.72 | 206.41 |
Source: Reuters.com, SEC Filings.
Analyst Consensus
| Buy | Outperform | Hold | Underperform | Sell | No Opinion |
This is the consensus forecast amongst 0ne polled investment analysts. Against the Netlist Inc company.
| Analyst Detail | Buy | Outperform | Hold | Underperform | Sell | No Opinion |
| Latest | 0 | 1 | 0 | 0 | 0 | 0 |
| 4 weeks ago | 0 | 1 | 0 | 0 | 0 | 0 |
| 2 months ago | 0 | 0 | 0 | 0 | 0 | 0 |
| 3 months ago | 0 | 0 | 0 | 0 | 0 | 0 |
| Last year | 0 | 0 | 0 | 0 | 0 | 0 |
The one analyst offering a 12-month price target expects NLST share price to rise to 3.50 in the next year from the last price of 2.30.
Source: www.ft.com
Consensus Estimates Analysis
| # of Estimates | Mean | High | Low | 1 Year Ago | |
| SALES (in millions) | |||||
| Quarter Ending Sep-10 | 1 | 11.00 | 11.00 | 11.00 | – |
| Quarter Ending Dec-10 | 1 | 15.00 | 15.00 | 15.00 | – |
| Year Ending Dec-10 | 1 | 42.19 | 42.19 | 42.19 | – |
| EARNINGS (per share) | |||||
| Quarter Ending Sep-10 | 1 | -0.15 | -0.15 | -0.15 | – |
| Quarter Ending Dec-10 | 1 | -0.09 | -0.09 | -0.09 | – |
| Year Ending Dec-10 | 1 | -0.59 | -0.59 | -0.59 | – |
Source: http://www.reuters.com/finance/stocks/financialHighlights?symbol=NLST.W
Investment Highlights
NLST recently announced that Dell Inc. (Nasdaq: DELL) has qualified both its 512 megabyte and 1 gigabyte flash memory-based, non-volatile cache subsystems, NetVault NV™, to support RAID storage applications on PowerEdge servers and PowerVault Direct Attached Storage solutions. With NetVault NV, NLST is helping enable Dell servers to recover and retain data for weeks following data center power failures. The announcement follows Dell’s recent selection of NLST’s battery-backed module, NetVault BB.
NetVault NV provides a solution for enhanced data center fault recovery, reduced system downtime and reduced total cost of ownership. The modules offer extended data retention by uniquely combining DRAM and Flash for high throughput performance. With Dell’s PowerEdge RAID Controllers (PERC) using NetVault NV, Dell’s enterprise customers are able to recover business critical data more reliably following a system outage versus traditional subsystems, which often cannot preserve cache data for more than 24 to 72 hours. In addition, alternative subsystems often require either unplanned or planned system downtime for maintenance. NetVault NV eliminates the need for these system downtimes and the associated loss of sales that can occur during these events.
In addition, NetVault NV only requires power for less than a minute to backup cache data. This flexibility allows OEMs to either use smaller, lower cost batteries or eliminate batteries altogether with the use of the NetVault NV’s Power Module Unit (PMU). The PMU uses ultra capacitor technology and allows the NetVault NV solution to achieve full RoHS 6/6 product compliance.
NLST, a designer and manufacturer of high-performance memory subsystems, recently announced that it will join the Russell Microcap® Index when Russell Investments reconstitutes its family of U.S. indexes after the close of the U.S. markets today, according to a preliminary list of additions posted June 11 on www.russell.com.
Membership in the Russell Microcap Index, which remains in place for one year, means automatic inclusion in the appropriate growth and value style indexes. Russell determines membership for its equity indexes primarily by objective, market-capitalization rankings and style attributes.
Russell indexes are widely used by investment managers and institutional investors for index funds and as benchmarks for both passive and active investment strategies. An industry-leading $3.9 trillion in assets currently are benchmarked to them.
Annual reconstitution of Russell Indexes captures the 4,000 largest U.S. stocks as of the end of May, ranking them by total market capitalization to create the Russell 3000® Index and Russell Microcap. These investment tools originated from Russell’s multi-manager investment business in the early 1980s when the company saw the need for a more objective, market-driven set of benchmarks in order to evaluate outside investment managers.
Source: http://www.netlist.com/
Technical Analysis
Source: http://stockcharts.com
NLST is trading within its Bollinger Bands. This is a normal condition and suggests that the stock is neither overbought nor oversold relative to the recent price action.
The MACD for NLST currently indicates a strong bearish signal for two reasons. First, the MACD is below the signal line, a 9-day moving average. Second, the MACD is below the critical level of zero, which implies that the underlying moving averages are trending lower.
Comparative Analysis
| Company Name | Ticker | Price per | Mrkt. Cap. | P/E | P/S | ||
| Jul-7-2010 | symbol | Share, $ | $ Mn | 2010 | 2011 | 2010 | 2011 |
| OCZ Technology Group Inc. | OCZ | 3.15 | 83.51M | n/a | n/a | n/a | n/a |
| GenCorp Inc. | GY | 4.43 | 261.37M | 8.40 | n/a | 0.34 | n/a |
| Dataram Corp. | DRAM | 1.41 | 12.57M | n/a | n/a | 0.45 | n/a |
| Semiconductor Median | 119.15M | n/a | n/a | 0.39 | n/a | ||
| Netlist Inc. | NLST | 2.78 | 70.24M | n/a | n/a | 3.21 | n/a |
Source: Thomson Financial
Insider Trading Activity
| NET SHARES PURCHASE ACTIVITY
Inside Purchases – Last 6 Months |
||
| Shares | Transaction | |
| Purchases | n/a | 0 |
| Sales | 75,000 | 2 |
| Net Shares Purchased (Sold) | (75,000) | 2 |
| Total Insider Shares Held | 9.35M | n/a |
| % Net Shares Purchased (Sold) | (0.8%) | n/a |
| Net Institutional Purchases — Prior Qtr to Latest Qtr | |
| Shares | |
| Net Shares Purchased (Sold) | 1,276,840 |
| % Change in Institutional Shares Held | 18.01% |
Source: Yahoo Finance
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