Preliminary Q2 ’24 Revenue Exceeds Expectations
Before market open yesterday, Peraso (PRSO) announced preliminary Q2 ‘24 revenue of $4.2 million, exceeding management’s guidance of $3.7-$4.0 million, our estimate of $3.8 million and consensus of $3.9 million. The revenue performance marked a return to strong sequential and Y/Y growth driven by ongoing shipments of end-of-life (EOL) memory IC products against the company’s existing backlog and the first of hopefully many orders of Peraso’s DUNE platform by a South African service provider. Given that the trajectory of EOL memory sales is largely known at this juncture, we assume the upside in Q2 was fully attributable to the mmWave business. More importantly, management expressed confidence in continued growth during the latter half of FY ‘24.
We raise our Q2 estimates to reflect the revenue upside but plan to await the company’s formal earnings release prior to making any other revisions. Considering the revenue upside, remaining backlog of memory EOL orders and private sale of 100,000 shares for gross proceeds of $127,000 to Director Ian McWalter last month, we continue to believe Peraso has sufficient cash on hand to operate through year-end. We note, however, that the company recently filed an S-3, which we believe provides management with the flexibility to raise capital should an opportunity arise from the confluence of improved business and market conditions. Our price target remains $4.00 based on an unchanged FY ’24 EV/Sales multiple of 1x.
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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.”
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