Alpha and Omega (AOSL) AI Stock Analysis

• Market Cap: $477.99M
• Dividend Yield: N/A
• Average Volume (3M): 517.90K
• Price to Earnings (P/E): ―
• Beta (1Y): 2.06
• Revenue Growth: 4.12%
• EPS Growth: -29.74%
• Country: US
• Employees: 2,332
• Sector: Technology
• Sector Strength: 44
• Industry: Semiconductors
• EPS (TTM): -0.80
• Shares Outstanding: 29,414,980
• 10 Day Avg. Volume: 692,681
• 30 Day Avg. Volume: 517,901
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.16
• Price to Cash Flow (P/CF): 13.70
• P/FCF Ratio: 13.60
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $37.25
• Price Target Upside: 129.23% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4

Alpha and Omega's stock score is impacted by significant financial challenges, including negative margins and erratic revenue performance. Despite a strong balance sheet with low leverage, the technical indicators suggest a bearish outlook. The valuation is not favorable, with a negative P/E ratio and no dividend yield. While there are industry strengths, these are overshadowed by broader financial instability and market pressures.

Positive Factors

Market Expansion

AOSL continues to transition from a component supplier to a total solutions provider, driving market share expansion and higher bill-of-materials content.

Product Opportunities

Increased confidence in the firm’s opportunity to participate across the full NVDA Blackwell product family, including content-rich on-board devices for data center servers, which provides up to a 5x increase in sockets per GPU.

Negative Factors

Financial Performance

Gross margin pressure driving a sizeable miss on the bottom line.

Margin Challenges

Gross margin was the only area of disappointment due to the high margin engineering services agreement ending and lack of fixed costs absorption.

Pricing Pressure

Gross margin the only area of disappointment due to pricing pressure and unfavorable product mix.

Alpha and Omega Business Overview & Revenue Model

Company Description

Alpha and Omega Semiconductor Limited designs, develops, and supplies power semiconductor products for computing, consumer electronics, communication, and industrial applications in Hong Kong, China, South Korea, the United States, and internationally. It offers power discrete products, including metal-oxide-semiconductor field-effect transistors (MOSFET), SRFETs, XSFET, electrostatic discharge, protected MOSFETs, high and mid-voltage MOSFETs, and insulated gate bipolar transistors for use in smart phone chargers, battery packs, notebooks, desktop and servers, data centers, base stations, graphics card, game boxes, TVs, AC adapters, power supplies, motor control, power tools, e-vehicles, white goods and industrial motor drives, UPS systems, solar inverters, and industrial welding. The company also provides power ICs that deliver power, as well as control and regulate the power management variables, such as the flow of current and level of voltage. Its power ICs are used in flat panel displays, TVs, Notebooks, graphic cards, servers, DVD/Blu-Ray players, set-top boxes, and networking equipment. In addition, the company offers aMOS5 MOSFET for quick charger, adapter, PC power, server, industrial power, telecom, and datacenter applications; and Transient Voltage Suppressors for laptops, televisions, and other electronic devices. Further, it provides EZBuck regulators; SOA MOSFET for hot swap applications; RigidCSP for battery management; and Type-C power delivery protection switches. The company was incorporated in 2000 and is headquartered in Sunnyvale, California.

How the Company Makes Money

Alpha and Omega Semiconductor Limited generates revenue through the sale of its diverse portfolio of power semiconductor products. The company's key revenue streams include the direct sale of its semiconductors to original equipment manufacturers (OEMs) and distributors in various sectors. AOSL benefits from strategic partnerships and collaborations with major technology companies, enhancing its market reach and technological development. Additionally, AOSL's focus on innovation and efficiency in power management solutions contributes to its competitive advantage in the semiconductor market, driving sales and profitability.

Alpha and Omega Financial Statement Overview

Summary

Alpha and Omega faces challenges in profitability and revenue stability, evidenced by negative margins and declining revenue. The balance sheet is a relative strength, with low leverage and a strong equity position. Cash flow improvements are promising but may not be sustainable without addressing underlying profitability issues. Continued focus on operational efficiency and strategic growth initiatives will be crucial for enhancing financial performance.

Income Statement

The income statement reveals declining revenue and profitability. The TTM (Trailing-Twelve-Months) data shows a negative net income with a net profit margin of -3.46%, indicating financial struggles. Revenue growth has been erratic, with a notable decline compared to previous years. The gross profit margin has decreased, reflecting rising costs or pricing pressures. EBIT and EBITDA margins have also been negative, highlighting operational challenges.

Balance Sheet

The balance sheet shows a strong equity position with a debt-to-equity ratio of 0.07, indicating low leverage. The equity ratio of 79.58% suggests a healthy balance with significant assets funded by equity. However, declining equity compared to total assets may pose future risks if profitability issues persist. The company maintains a stable cash position, which provides some financial flexibility.

Cash Flow

Cash flow analysis indicates some positive trends with a free cash flow growth rate of 499.22% in the latest TTM period, showing improvement from prior negative figures. The operating cash flow to net income ratio is 2.62, suggesting efficient cash generation relative to net income. However, the company's ability to sustain this cash flow growth remains uncertain given the volatile net income performance.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
666.40M	657.27M	691.32M	777.55M	656.90M	464.91M
	Gross Profit
161.53M	171.92M	199.54M	268.56M	204.54M	102.73M
	EBIT
-18.16M	-3.76M	22.53M	102.04M	11.39M	-13.34M
	EBITDA
7.90M	50.00M	65.74M	144.89M	116.76M	31.15M
	Net Income Common Stockholders
-23.05M	-11.08M	12.36M	453.16M	58.12M	-18.26M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
114.41M	175.13M	195.19M	314.35M	202.41M	158.54M
	Total Assets
329.70M	1.15B	1.20B	1.30B	918.57M	792.94M
	Total Debt
14.68M	67.21M	78.80M	98.77M	201.56M	206.40M
	Net Debt
-99.74M	-107.92M	-116.38M	-215.58M	-851.00K	47.87M
	Total Liabilities
93.22M	253.41M	315.82M	444.54M	402.25M	361.05M
	Stockholders Equity
236.49M	891.61M	883.92M	854.09M	373.20M	293.69M
Cash Flow		Free Cash Flow
31.00M	-11.38M	-89.95M	80.85M	56.04M	-83.00K
	Operating Cash Flow
60.47M	25.71M	20.47M	218.87M	128.74M	62.31M
	Investing Cash Flow
-28.41M	-35.74M	-109.63M	-130.82M	-72.54M	-60.85M
	Financing Cash Flow
-11.49M	-9.90M	-29.61M	21.85M	-18.99M	37.65M

Alpha and Omega Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 16.25
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AOSL, the sentiment is Negative. The current price of 16.25 is below the 20-day moving average (MA) of 21.35, below the 50-day MA of 26.64, and below the 200-day MA of 35.02, indicating a bearish trend. The MACD of -2.95 indicates Positive momentum. The RSI at 31.31 is Neutral, neither overbought nor oversold. The STOCH value of 6.46 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AOSL.

Alpha and Omega Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IMOS	66 Neutral	$556.42M	12.41	5.63%	5.38%	3.24%	-26.85%
Sector *	58 Neutral	$9.82B	10.00	-6.63%	3.09%	7.49%	-11.58%
CEVA	58 Neutral	$542.29M	―	-3.31%	―	3.68%	26.36%
ICHR	50 Neutral	$591.01M	―	-3.30%	―	4.68%	55.72%
COHU	48 Neutral	$665.52M	―	-7.73%	―	-36.86%	-351.11%
AOSL	47 Neutral	$477.99M	―	-2.57%	―	4.12%	-29.74%
AAOI	41 Neutral	$505.01M	―	-84.12%	―	14.57%	-139.27%

Alpha and Omega Corporate Events

Alpha and Omega Announces Leadership Restructuring

On March 3, 2025, Dr. Mike F. Chang resigned as Executive Chairman of Alpha & Omega Semiconductor Limited but will continue as a director and Chairman of the Board and has been appointed as Executive Vice President of Strategic Initiative. His compensation was adjusted, with a reduced base salary and target annual cash bonus, alongside an award of restricted share units. Additionally, the company announced an executive bonus plan for 2025, linking executive bonuses to the attainment of specific non-GAAP earnings per share and revenue goals, with varying bonus percentages based on performance levels.