Market Overview

Analyst: IoT Demand Sets Up Adesto Technologies For Long-Term Growth

Share:
Analyst: IoT Demand Sets Up Adesto Technologies For Long-Term Growth

Semiconductor supplier Adesto Technologies Corp (NASDAQ: IOTS) is well-positioned to benefit from the growth in demand for Internet of Things-related endpoints, according to Canaccord Genuity. 

The Analyst

Canaccord's T. Michael Walkley initiated coverage of Adesto Technologies with a Buy rating and $9 price target.

The Thesis

Adesto is best known for its non-volatile memory, or NVM, solutions for IoT endpoints and should benefit over the coming years given its differentiated offerings that include low power and long battery life solutions, Walkley said in the Monday initiation note. (See the analyst's track record here.) 

The company's new product lines including MavriqCM and EcoXip should help Adesto generate strong revenue growth and significant operating leverage, even if it only wins a modest market share from existing products, the analyst said. 

The bullish case for Adesto is also predicated on its recent acquisition of S3 Semiconductors and the pending purchase of Echelon, Walkley said. The addition of S3's products will expand Adesto's addressable market, he said. 

The potential Echelon acquisition would increase Adesto's addressable market from IoT ASICs to complete industrial IoT solutions, according to Canaccord. 

In light of favorable industrywide trends and benefits from acquisitions, Adesto's revenue growth over the coming years should outpace its expense growth, Walkley said. This should help lift the company's earnings per share from a loss of 15 cents to positive 54 cents in 2020, with a long-term earnings growth profile to follow, the analyst said. 

Price Action

Adesto shares were trading up 1.5 percent to $5.79 at the time of publication Monday. 

Related Links:

Analyst Says Adesto Tech Offers A Play On Growing IoT Market

AlarmCom Is A Rare Home Automation, IoT Play, Jefferies Says In Upgrade

Latest Ratings for IOTS

DateFirmActionFromTo
Sep 2019Initiates Coverage OnBuy
Sep 2019Initiates Coverage OnBuy
Aug 2019DowngradesOutperformMarket Perform

View More Analyst Ratings for IOTS
View the Latest Analyst Ratings

Posted-In: Canaccord Genuity Internet of Things IoT T. Michael WalkleyAnalyst Color Price Target Initiation Analyst Ratings Best of Benzinga

 

Related Articles (IOTS)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
ABBBarclaysInitiates Coverage On
DPLOWilliam BlairUpgrades
SUPVItau BBADowngrades
GGALItau BBADowngrades
BMAItau BBADowngrades
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

KBW Upgrades Wells Fargo Despite Q2 Miss, Says Valuation 'Compelling'

EUR/USD Has Its Technical Battle Lines Clearly Drawn – Confluence Detector