QuickLogic Corporation (NASDAQ:QUIK) has been impressing investors with its innovative ultra-low-power multi-core voice-enabled SoCs. The company’s stock soared more than 14% in Thursday trading after it announced that Shenzhen AONI Electronic has selected its EOS S3 multi-core voice-enabled System on a Chip (SoC) for its Active Noise Cancelling (ANC) Bluetooth headphone set and Bluetooth enabled sports earphone.
“We selected QuickLogic’s EOS S3 Sensor Processing Platform for its always-on voice trigger, fast response time, and ultra-low power consumption,” said ShiJie Wu from AONI. “Their complete solution and excellent technical support enabled us to quickly and easily add voice control support to our sports earphone and headphone products at very low power levels.”
Source: finviz.com
QuickLogic stock price gained 39% in the last twelve months, but the stock is down 34% in the past three years. Despite the latest rally, QuickLogic shares have limited upside potential in days to come, amid its lower than expected results.
In the latest quarter, the company missed the consensus estimate by $0.05 million, while the revenue increased only 5.7% compared to the same period last year. Its revenue growth in the past three years was standing around negative 24%, compared to the industry average of 7%. The revenue growth in the range of mid-single to low-double-digit is never considered as a solid performance from growth stocks.
On the other hand, the company has also been posting big losses over the last three years. In the latest quarter, it generated a loss of $3.6 million.
On the back of poor financial results, its valuations increased compared to the industry average; a poor sign for its share price growth.
QuickLogic shares look substantially overvalued, trading around 8 times to book value and 11 times to sales, compared to the industry average of 4.5 and 4.8 times, respectively. Although the company has been introducing new products and trying to expand their market share, its financial numbers are likely to remain depressed in the following quarters. The company needs to work on improving their efficiencies to turn the revenue growth into profits. Therefore, the stock has limited upside despite the recent rally.
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