Technology
ADEA has been swept up in the latest market selling as fears related to tariffs have taken hold even though the company generates its revenue from long-term licensing agreements. ~85% of revenue stems from pay TV and streaming video operators. The remaining portion is from semiconductor companies where tariffs remain an unknown. Q1 was filled with renewals as ADEA tries to leverage last year’s video streaming license with Amazon into new license agreements. Investors are overlooking the resilience of the business and the cash flow ADEA is able to generate this year to further reduce its debt. Hamed Khorsand expects the share price to bounce back when the company reports Q1 results in May. TP $18 (50% upside).
Edition: 209
- 18 April, 2025
Technology
Hamed Khorsand thinks ADEA could be the most under the radar AI beneficiary through its patent portfolio related to hybrid bonding. Key points from his report include: 1) ADEA has secured nearly the entire DRAM and flash market through licenses and is expected to broaden to image and logic semiconductors. 2) Hybrid bonding is expected to help usher the next generation of semiconductors to handle the growing need for speed and bandwidth with lower power consumption. 3) ADEA’s stock has been mainly valued on the FCF the business is able to generate from its media patent portfolio with little value given to its semiconductor patent portfolio. 12-month TP $16 (50% upside).
Edition: 162
- 09 June, 2023