Akoustis Technologies, Inc.

AKTS Details

Akoustis Technologies, Inc. (NASDAQ: AKTS) is a startup focusing on creating, engineering, and manufacturing RF filter solutions for the wireless sector, including smartphones and tablets, network infrastructure equipment, WiFi Customer Premise Equipment, and defence applications. The company makes money by selling filter items to customers who place individual purchase orders.

Latest News:

• Order From Tier 1 Customer: An order for the development of XBAWTM filters for mobile smartphones and other devices was announced from a new multi-billion-dollar tier-1 5G mobile front-end module customer.
• High-rise in Patents: As of April 15, 2022, the company's XBAWTM patent portfolio has grown to 58 with another 100 patents pending.

Q3 FY22 Results:

• Sequential Revenue Growth: Revenue increased by 83.04% to record USD 4.61 million in Q3FY22 (ending March 31, 2022) from USD 2.52 million in Q3FY21, owing to an increase in RF product income, which includes revenue from sales of RFM Integrated Device, Inc (RFMi) products.
• Expansion in Operational Losses: The company posted a loss from operations of USD 14.79 million in Q3 FY22 compared to USD 9.08 in Q3 FY21 due to a significant increase in research and development expenses.
• Strong and Debt Free Balance Sheet: As of March 31, 2022, the cash position was USD 55.87 million, with zero debt and a current ratio of 5.93x , implies a strong liquidity position of the company.

Key Risks:

The industry and the markets in which the Company operates are highly competitive and subject to rapid technological change. Therefore, in order for the company’s RF filters to be competitive and achieve market acceptance, they need to keep pace with rapid development of new process technologies. Further, AKTS is dependent on the proper functioning of their critical facilities, supply chain and distribution networks and the financial stability of its customers. Also, the company is exposed to volatility in the semiconductor prices.

Valuation Methodology: EV/Sales-based Relative Valuation

(Source: Analysis by Kalkine Group)

*% Premium/(Discount) is based on our assessment of the company’s NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

Stock Recommendation:

AKTS’s stock price has fallen 57.78% in the past nine months and is leaning towards the lower end of its 52-week range of USD 11.50 to USD 3.25. We have valued the stock using the Ev/Sales-based relative valuation methodology and arrived at a target price of USD 4.76.

Further, the company is expected to produce another quarter of record revenue in the current June quarter, with a top-line sequential growth of higher than 30%, based on significant activity in both the sales and design win pipelines.

Considering the strong sequential revenue growth, strong outlook, steady performance, increased patents, associated risks, and current valuation, we recommend a "Speculative Buy" rating on the stock at the current market price of USD 3.93 as of May 27, 2022, at the 07:30 AM PDT.

AKTS’s 1 Year Technical Price Chart (as of May 27, 2022, at 07:30 AM PDT). Source: REFINITIV, Analysis by Kalkine Group

Technical Summary Analysis

*CMP as of May 27, 2022, at 07:30 AM PDT

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

Note 1: The reference data in this report has been partly sourced from REFINITIV.  

Note 2: Investment decision should be made depending on the investors' appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the valuation has been achieved and subject to the factors discussed above. 

Note 3: The report publishing date is as per the Pacific Time Zone.