Needham analyst N. Quinn Bolton initiates coverage on Lattice Semiconductor Corp (NASDAQ:LSCC) with a Buy rating and a price target of $90.
The analyst forecasts a 12.2% CAGR over the coming three years for revenue from the company’s Nexus platform, launched in 2019.
Also, the launch of LSCC’s new mid-range Avant platform more than doubles its TAM and represents a significant new growth vector, notes the analyst.
While not immune to macroeconomic factors, Lattice, the analyst says, can maintain its growth as a result of its expanding product portfolio and lean distributor inventory levels.
The analyst expects an in-line quarter and guidance when the company reports 3Q23 earnings on October 30 and is of the view that earnings risk should decrease in 2024 as the economy gets on a better footing.
The analyst does not foresee last Tuesday’s expanded export control rules as having a material impact on LSCC.
Despite not being a direct play on AI, the analyst says the company should trade at a premium based on strong organic growth expectations, diversified customers, exposure to attractive end-markets and geographies, industry-leading gross and operating margins, sticky wins, and lack of political/export control risk.
Price Action: LSCC shares are trading higher by 1.33% at $72.38 on the last check Tuesday.
