SMART Analyst Slashes Price Target By 25% Citing Macro Challenges In LED & Memory Segments - SMART Glb Hldgs (NASDAQ:SGH)

Needham analyst Rajvindra Gill maintained SMART Global Holdings, Inc SGH with a Buy and cut the price target from $40 to $30.
SMART reported quarterly sales of $438.00 million, down 6.4% year-on-year, missing the consensus of $440.00 million.
SMART reported quarterly adjusted EPS of $0.80, which beat the consensus of $0.65.
SMART reported a solid print given the volatile macroeconomic climate though the LED and Memory segments were affected by supply chain and demand challenges, especially in Brazil.
Meanwhile, Intelligent Platform Solutions (IPS) continues to be strong, growing 48% Y/Y, and should grow over 50% Y/Y in FY23 when factoring in the Stratus acquisition.
He opted for caution amidst a weakening macroeconomic backdrop.
His Memory and LED estimates move significantly lower.
Net, his FY23 revenue number comes down to $100 million, despite the Stratus acquisition adding $150 million to the top line.
His price target moves to $30 based on a 50/50 blend of EV/S (~1.2x) and P/E (9x) on his reduced FY23 estimates.
He continues to favor the shifting business underneath the hood.
He models the IPS segment (higher margin, higher growth) to account for 38% of revenue in FY23, up from 24% in the last three years.
Price Action: SGH shares traded lower by 5.14% at $16.14 on the last check Wednesday.