Stock Alert for Netlist Inc. (NLST)
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  • Stock Alert for Netlist Inc. ($NLST)
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    Stock Alert for Netlist Inc. (NLST)

    Netlist Inc. (NLST) engages in the design and manufacture of high-performance, logic-based memory subsystems for datacenter server and high-performance computing and communications markets. Its flagship products include HyperCloud Memory, which breaks traditional memory barriers, and the NetVault family of products, including both battery and flash memory-based subsystems, which enables data retention for weeks following a disaster. The memory technologies are developed for applications in which high-speed, high-capacity memory, enhanced functionality, small form factor, and heat dissipation are key requirements. These applications include tower-servers, rack-mounted servers, blade servers, high-performance computing clusters, engineering workstations, and telecommunication equipment.

    NLST was founded in 2000 and is headquartered in Irvine, California. It maintains manufacturing facilities in Suzhou, People’s Republic of China.

    Share Statistics (03-Feb-11) FY

    2008

    FY

    2009

    %

    Chg

    Q3

    2009

    Q3

    2010

    %

    Chg

    Symbol NLST Revenue, $Mn 67.01 18.48 -72.4% 6.45 10.56 63.7%
    Current price $2.43 Gross marg. 11.3% 16.0% 41.6% 24.3% 28.6% 17.7%
    52wk Range: $1.81-$5.10 Oper. margin -72.7% -46.6%
    Avg Vol (3m): 290,453 Net margin -22.7% -69.9% 207.9% -32.4% -46.8% 44.4%
    Market Cap. 61.49M
    Shares Outstanding 25.31M EPS, $ -0.77 -0.65 -15.6% -0.11 -0.20 81.8%

    Source: Reuters.com, SEC Filings.

    Financial Summary

    For the third quarter ended October 2, 2010, NLST reported revenues of $10.6 million, up 64% from revenues of $6.4 million for the third quarter ended October 3, 2009. Sequentially, revenues improved 14% from the $9.3 million in revenues for the second quarter ended July 3, 2010. Gross profit for the third quarter ended October 2, 2010, was $3.0 million, or 28.6% of revenues, compared to a gross profit of $1.6 million, or 24.3% of revenues, for the third quarter ended October 3, 2009. Sequentially, gross profit improved 66% and gross margin improved 9 percentage points from the second quarter ended July 3, 2010.

    Net loss for the third quarter ended October 2, 2010, was $4.9 million, or $0.20 loss per share, compared to a net loss in the prior year period of $2.1 million, or $0.11 loss per share. The increased loss was primarily attributable to higher engineering, sales and marketing costs associated with technology development, and sampling and qualification efforts at various OEMs and end-users. These results include stock-based compensation expense in the third quarter ended October 2, 2010, of $0.4 million compared with $0.6 million in the prior year period.

    Revenues for the nine months ended October 2, 2010, were $27.8 million, up 136% from revenues of $11.8 million for the nine months ended October 3, 2009. Gross profit for the nine months ended October 2, 2010, was $6.7 million, or 24.0% of revenues, compared to gross profit of $1.3 million, or 10.8% of revenues for the nine months ended October 3, 2009.

    Net loss for the nine months ended October 2, 2010, was $11.9 million, or $0.51 loss per share, compared to a net loss in the prior year period of $9.9 million, or $0.50 loss per share. These results include stock-based compensation expense for both periods of $1.2 million.

    As of October 2, 2010, cash, cash equivalents, and investments in marketable securities were $19.0 million, total assets were $35.8 million, working capital was $20.6 million, total debt was $1.7 million, and stockholders’ equity was $24.8 million.

    Source: www.netlist.com


    Financial Strength (03-Feb-2011) Company Industry Sector S&P 500
    Quick Ratio (MRQ) 2.68 0.53 1.26 0.63
    Current Ratio (MRQ) 3.07 0.64 2.12 0.96
    LT Debt to Equity (MRQ) 4.34 5.78 12.70 107.74
    Total Debt to Equity (MRQ) 6.92 10.87 22.08 152.28
    Interest Coverage (TTM) 0.01 0.56 14.04

    Source: Reuters.com, SEC Filings.

    Analyst Consensus

    This is the consensus forecast among two polled investment analysts. Against the Netlist Inc company.

    Analyst Detail Buy Outperform Hold Underperform Sell No Opinion
    Latest 0 1 1 0 0 0
    4 weeks ago 0 1 1 0 0 0
    2 months ago 0 1 1 0 0 0
    3 months ago 1 1 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 4.00 in the next year from the last price of 2.16.

    Source: markets.ft.com

    Consensus Estimates Analysis


    # of Estimates Mean High Low 1 Year Ago
    SALES (in millions)
    Quarter Ending Mar-11 2 11.49 12.30 10.68
    Quarter Ending Jun-11 2 12.61 13.50 11.73
    Year Ending Dec-11 2 58.53 64.05 53.00
    EARNINGS (per share)
    Quarter Ending Mar-11 2 -0.16 -0.13 -0.18
    Quarter Ending Jun-11 2 -0.14 -0.11 -0.17
    Year Ending Dec-11 1 -0.33 -0.33 -0.33

    Source: http://www.reuters.com/finance/stocks/financialHighlights?symbol=NLST.OQ


    Investment Highlights

    NLST shares on Thursday jumped nearly 13% to close at $2.43. The stock has traded between $1.81 and $5.10 over the last 52 weeks. NLST trading volume skyrocketed to 4.59 million shares on Thursday, nearly 13X its average daily volume.  The stock is currently below the 50-day moving average of 2.42 but above the 200-day moving average of 2.75.  At Thursday’s closing market price, the NLTS’s market capitalization stands at $61.49 million.

    Computer memory products maker NLST recently announced that its HyperCloud memory module has achieved independent industry functional certification from Computer Memory Test Labs (CMTL). The testing agency has confirmed the Company’s 8GB and 16GB HyperCloud memory products successful functionality on, and compatibility with, standard Intel Xeon 5600 server motherboards.

    Steve McClure, NLST vice president of worldwide sales and marketing, commented in a press release, “The CMTL certification of both our 8GB and 16GB HyperCloud modules further reinforces the capabilities of our memory technology for end-user applications.” The company also said that it would continue towards working on the products. CMTL also said that its testing of Netlist products has confirmed the products’ functional compatibility.

    The Company’s HyperCloud memory technology was certified by using a test that conducts a flow using DDR3 RDIMM functionality processes. CMTL also used standard 12 slot and 18 slot Intel Xeon5600 server motherboards.

    “Our independent testing of HyperCloud on an array of server platforms which includes Intel-based systems, confirms the memory technology’s functional compatibility,” stated Raji Tannouri, general manager of CMTL.  “HyperCloud now joins a limited list of memory products that have passed our extensive battery of certification tests.”

    Last month, NLST said it has teamed with Ultra-X, a provider of hardware and software diagnostic solutions for the IT industry, to deliver an enhanced memory test solution specifically for high-capacity memory server systems.  With support from NLST, Ultra-X’s RAM Stress Test (RST) Premium, a memory diagnostic tool designed for the rigorous testing needs of server and memory manufacturers, has been enhanced to significantly reduce test session time while also preserving RST’s test coverage.

    “With Ultra-X RST-Pro now supporting up to 512GB, our mutual customers can accelerate the development of high memory density systems,” McClure said.  “With this enhancement, RST-Premium streamlines the test process for high capacity memory systems, establishing HyperCloud as the high density memory module standard.

    NLST posted a wider loss in the third quarter, mainly reflecting higher engineering, sales and marketing costs associated with technology development, and sampling and qualification efforts at various OEMs and end-users.

    Visit NLST at www.netlist.com

    Technical Analysis

    Source: http://stockcharts.com

    On Wednesday, NLST closed above its 20-day moving average. This is generally considered to be an indication of a bullish trend.

    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.

    NLST’s MACD is currently indicating a weak bullish signal. Although the MACD is trending above the signal line, the indicator is still below 0, which suggests that the underlying moving averages are bearish.

    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    Feb03-2011 symbol Share, $ $ Mn 2010 2011 2010 2011
    SMART Modular Technologies (WWH) Inc. SMOD 6.89 434.78M 10.44 7.66 0.57 0.52
    STEC Inc. STEC 23.07 1.17B 34.95 18.91 4.24 3.00
    Sanmina-SCI Corp. SANM 15.89 1.27B 8.50 6.94 0.19 0.17
    Micron Technology Inc. MU 10.90 10.87B 21.8 9.73 1.22 1.09
    Semiconductor- Memory Chips Median 16.10 n/a 1.61 n/a
    Netlist Inc. NLST 2.43 61.49M n/a n/a 1.58 1.05

    Source: Thomson Financial

    Insider Trading Activity

    NET SHARES PURCHSE ACTIVITY

    Inside Purchases – Last 6 Months

    Shares Transaction
    Purchases n/a 0
    Sales 125,000 3
    Net Shares Purchased (Sold) (125,000) 3
    Total Insider Shares Held 9.36M n/a
    % Net Shares Purchased (Sold) (1.3%) n/a
    Net Institutional Purchases — Prior Qtr to Latest Qtr
    Shares
    Net Shares Purchased (Sold) (5,704,160)
    % Change in Institutional Shares Held 164.04%

    Source: Yahoo Finance

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