Akoustis Technologies, Inc.

AKTS Details

Akoustis Technologies, Inc. (NASDAQ: AKTS) is a commercial products company engaged in the designing and manufacturing of ground-breaking radio frequency (RF) filter solutions for the wireless industry, leveraging its patented Microelectromechanical System (MEMS)-based Bulk Acoustic Wave (BAW) technology and a unique manufacturing process flow, for filters used in RF Front-End (RFFE) applications. AKTS derives its revenue through fabrication services and RF filters, and amplifier product sales. As of August 19, 2021, it had 52 patents and 82 patent applications pending.

Target End Markets (Source: Investor Presentation, September 2021)

Delivery of First 5G Mobile Filters: On August 30, 2021, AKTS shipped the first 5G mobile wafer-level technology (WLP) filters to its tier-1 RF component customer. It anticipates delivering the second WLP filter sample to this customer by the end of Q4CY21, with an expectation to commence production with this customer in H2CY22.

FY21 Results: The company reported a YoY surge of 269.72% in revenue to USD 6.62 million in FY21 (ended June 30, 2021) compared to USD 1.79 million in FY20, owing to an increase in revenue from sales of filters and engineering services. The Foundry Fabrication Services revenue, which accounted for 43.03% of the total revenue in FY21, grew 1.87x YoY, whereas the Product Sales revenue expanded by 371.84% YoY. However, its net loss also increased to USD 44.16 million in FY21 vs. USD 36.14 million in FY20. As of June 30, 2021, the company had a cash balance of USD 88.32 million and no outstanding debt.

Key Risks: AKTS derives the majority of the revenue from a limited number of customers. For example, its top two customers accounted for 47% and 29% of the total FY21 revenue. As a result, the loss of any of these key customers could harm its financial performance.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation

(Analysis by Kalkine Group)

• % Premium/(Discount) is based on our assessment of the company's FY1 trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

AKTS Daily Technical Chart (Source: REFINITIV)

Stock Recommendation: AKTS's stock price decreased 35.69% in the past nine months and is currently leaning towards the lower band of its 52-week range of USD 7.40 to USD 19.15. The stock is currently trading below its 50 and 200 DMA levels, and its RSI Index is at 34.61. We have valued the stock using the EV/Sales-based relative valuation methodology and arrived at a target price of USD 10.41. Considering the significant correction in the stock price, decent balance sheet, current valuation, and associated risks, we recommend a " Speculative Buy" rating on the stock at the current price of USD 8.29, up 0.24% as of October 07, 2021, 3:34 PM ET.

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.

*Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached.