Q1 '23 Earnings Preview

Peraso (PRSO) reports Q1 ’23 results after the close next Monday, May 15, and will host its earnings call before the market opens on Tuesday, May 16. As management’s Q1 revenue guidance was issued just over a week before the quarter ended, we expect the print to hold few surprises and to be largely consistent with our estimates. We note that the consensus revenue projection of $4.5 million, which includes just one other set of estimates, sits slightly below management’s guidance for $4.7-$5.0 million and our estimate of $4.8 million. However, the consensus forecast for adjusted EBITDA and EPS of $(2.2) million and $(0.10), respectively, are in line with our estimates of $(2.1) million and $(0.10).  

Exhibit I: Our Estimates Versus Consensus

Sources: K. Liu & Company LLC; FactSet Estimates

Of more significance will be the company’s outlook for Q2. Although we continue to expect sequential revenue growth driven by an ongoing ramp in Peraso’s mmWave products, we suspect management may temper expectations somewhat considering the inventory corrections affecting the broader semiconductor industry. That said, between an uptick in revenue and the benefit of significant expense reductions enacted earlier this year, we still anticipate moderating losses and cash burn in Q2 and beyond.

Aside from the results and guidance, our focus will be on the pipeline of potential design wins for Peraso’s 60 GHz mmWave modules and 5G beamformer ICs as well as the company’s progress in securing any non-recurring engineering (NRE) services agreements. While the former is critical for the company’s long-term growth prospects, we believe any favorable developments on the NRE front could serve as a catalyst for shares given the more immediate boost to cash flow. In this regard, we continue to believe shares of PRSO are significantly undervalued but recognize that the current overhang on the stock is unlikely to dissipate until the company shores up its balance sheet and moves closer to positive cash flow. Our price target remains $2.00 based on a FY ’23 EV/Sales multiple of approximately 3x.

Our report with model and disclosures is available here.

Disclosure(s):

K. Liu & Company LLC (“the firm”) receives or intends to seek compensation from the companies covered in its research reports. The firm has received compensation from Peraso Inc. (PRSO) in the past 12 months for “Sponsored Research.”

Sponsored Research produced by the firm is paid for by the subject company in the form of an initial retainer and a recurring monthly fee. The analysis and recommendations in our Sponsored Research reports are derived from the same process and methodologies utilized in all of our research reports whether sponsored or not. The subject company does not review any aspect of our Sponsored Research reports prior to publication.