It’s not uncommon for the market to assign negative value to a deal and punish the acquiring company accordingly, but the degree of punishment being meted out to ams AG (OTCPK:AMSSY) over its acquisition of Osram (OSAGY) is on a level all its own.
Given its margins and near-term growth prospects from its 3D sensing business, ams would quite possibly trade at four times forward revenue on a standalone basis. Even if you factor in a steep discount for the company’s reliance on Apple (AAPL) (close to half of revenue), the fact is that the stock currently trades at an EV/revenue of less than 2x pro-forma 2021 revenue estimates.
There are a lot of things to dislike about the Osram deal, but with ams’s core sensing business performing well and still leveraged to opportunities like behind-OLED sensing (or BOLED), the discount seems extreme. Management at ams has given investors and analysts plenty to dislike, and plenty of reasons to avoid the stock, but expectations seem incredibly low now.
Read more here:
No comments:
Post a Comment