Alpha and Omega (AOSL) AI Stock Analysis

• Market Cap: $790.13M
• Dividend Yield: N/A
• Average Volume (3M): 345.08K
• Price to Earnings (P/E): ―
• Beta (1Y): 2.11
• Revenue Growth: 3.57%
• EPS Growth: -134.36%
• Country: US
• Employees: 2,332
• Sector: Technology
• Sector Strength: 84
• Industry: Semiconductors
• EPS (TTM): -0.10
• Shares Outstanding: 29,759,995
• 10 Day Avg. Volume: 302,737
• 30 Day Avg. Volume: 345,083
• PEG Ratio: -0.75
• Price to Book (P/B): 1.02
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -10.05
• Enterprise Value/Market Cap: 1.00
• Enterprise Value/Revenue: 0.30
• Enterprise Value/Gross Profit: 4.89
• Enterprise Value/Ebitda: 4.46
• 1Y Price Target: $26.67
• Price Target Upside: -3.75% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 66 Neutral
• Price Target: $30.00 ▲(8.26%Upside)

Alpha and Omega's stock score is primarily driven by its strong technical momentum and robust balance sheet. However, profitability issues and valuation concerns weigh down the score. The earnings call provided positive growth insights, but challenges remain in certain segments.

Positive Factors

Design Wins

Investors will appreciate the firm’s first data center GPU design win, which has begun initial shipments and is expected to ramp through the year.

Earnings

AOSL delivered solid March quarter results and better than expected guidance, with tariff driven demand pull forward in the Computing segment partially contributing to the outperformance.

Market Leadership

AOSL is becoming the industry leader in the battery PCM market, driven by strong performance from Tier 1 U.S. smartphone customers and Chinese handset OEMs.

Negative Factors

Gross Margin

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

Revenue Trajectory

The price target is being lowered to $32 from $42 to reflect a modestly more cautious revenue trajectory near-term.

Service Agreement End

Gross margin was the only area of disappointment, with a decline attributed to the ending of a high margin engineering services agreement and lack of fixed costs absorption.

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 power semiconductor products. The company's primary revenue streams include direct sales to original equipment manufacturers (OEMs) and sales through distribution channels. AOSL's products are integrated into a wide array of electronic devices and systems, which ensures a steady demand across different industry sectors. The company also engages in strategic partnerships and collaborations to enhance its market reach and product offerings. Factors such as technological advancements, increased demand for energy-efficient solutions, and a strong focus on research and development contribute significantly to its earnings.

Alpha and Omega Financial Statement Overview

Summary

Alpha and Omega shows growth and a strong balance sheet with low leverage. However, profitability challenges are evident with negative net margins and ROE. While cash flow management is improving, profitability needs attention to enhance financial health.

Income Statement

The income statement reveals a mixed performance for Alpha and Omega. The company experienced a slight revenue growth of 3.6% in TTM compared to the previous annual period, while the gross profit margin stands at 23.7%. Despite these positives, the company is facing profitability challenges, as indicated by a negative net profit margin of -3.3% and a negative EBIT margin of -2.7% in TTM. These factors suggest pressure on profitability, although EBITDA margin of 6.7% indicates some operational efficiency.

Balance Sheet

Alpha and Omega's balance sheet shows a strong equity position, with an equity ratio of 79.4% in the TTM, reflecting financial stability. The debt-to-equity ratio is low at 0.06, indicating low leverage. However, ROE is negative at -2.6%, due to negative net income, which is a concern. Overall, the balance sheet is robust, but profitability issues are impacting returns.

Cash Flow

Cash flow analysis shows positive operating cash flow, with an operating cash flow to net income ratio of -1.75, indicating good cash generation relative to net income. Free cash flow improved significantly with a growth rate of 182.9% from the previous annual period, showing better cash management. However, the free cash flow to net income ratio remains challenging at -0.42, reflecting ongoing profitability issues.

Breakdown	TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	680.97M	657.27M	691.32M	777.55M	656.90M	464.91M
Gross Profit	161.15M	171.92M	199.54M	268.56M	204.54M	102.73M
EBITDA	45.51M	50.00M	65.74M	144.89M	116.76M	31.15M
Net Income	-22.65M	-11.08M	12.36M	453.16M	58.12M	-18.26M
Balance Sheet
Total Assets	1.12B	1.15B	1.20B	1.30B	918.57M	792.94M
Cash, Cash Equivalents and Short-Term Investments	169.36M	175.13M	195.19M	314.35M	202.41M	158.54M
Total Debt	54.78M	67.21M	78.80M	98.77M	201.56M	206.40M
Total Liabilities	230.08M	253.41M	315.82M	444.54M	402.25M	361.05M
Stockholders Equity	886.29M	891.61M	883.92M	854.09M	373.20M	293.69M
Cash Flow
Free Cash Flow	9.44M	-11.38M	-89.95M	80.85M	56.04M	-83.00K
Operating Cash Flow	39.62M	25.71M	20.47M	218.87M	128.74M	62.31M
Investing Cash Flow	-29.32M	-35.74M	-109.63M	-130.82M	-72.54M	-60.85M
Financing Cash Flow	-15.25M	-9.90M	-29.61M	21.85M	-18.99M	37.65M

Alpha and Omega Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 27.71
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AOSL, the sentiment is Positive. The current price of 27.71 is above the 20-day moving average (MA) of 24.69, above the 50-day MA of 22.48, and below the 200-day MA of 31.13, indicating a neutral trend. The MACD of 1.10 indicates Negative momentum. The RSI at 71.75 is Negative, neither overbought nor oversold. The STOCH value of 86.72 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AOSL.

Alpha and Omega Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IMOS	71 Outperform	$661.34M	18.12	4.72%	4.53%	-0.41%	-46.38%
AOSL	66 Neutral	$790.13M	―	-2.55%	―	3.57%	-134.36%
COHU	63 Neutral	$912.85M	―	-9.87%	―	-30.75%	-3668.44%
CEVA	62 Neutral	$520.18M	―	-2.51%	―	13.09%	46.89%
ICHR	57 Neutral	$719.25M	―	-2.35%	―	13.41%	72.56%
AAOI	54 Neutral	$1.42B	―	-68.45%	―	50.30%	-111.11%
Sector *	49 Neutral	C$2.92B	2.03	-80.91%	2.68%	12.55%	-24.32%

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.