Iqe Share Discussion Threads

[guildedge] 26/7/2024 22:13

They are heavily invested in the 3x revenue now. They said at previous AGM that their current set up was for mass production well above what they are producing now.

They have made some cost savings but the days of turning over 132-160m and making 10-20m profit are gone. They may well get margins closer to 30% at some point but these new contracts are taking time to make any real impact on the bottom line. The high value of the pound is not likely helping either.

They are geared up production wise for revenue that is 2-3x what they are currently making. Revenue is heading in the right direction just not as fast as some here think. The brokers are not far off right now.

There was a 2m late trade that showed up this morning. So volumes kicking in at 30p. So the market still has a lot of confidence even at 30p. So i wouldn't hit the panic button just yet.

[bbonsall] 26/7/2024 20:08

CW
I was only trying to say that losses on £150 million in the past doesn't automatically mean that similar revenues mean similar losses now.

[crosswires] 26/7/2024 16:46

I think for now us investors shouldn’t assume margins have improved just like we shouldn’t assume large revenue growth is coming. To date nothing confirms either all we have is Americo targeting both, so we await something concrete to point us in the right direction…

Another false dawn week, but time for some cold beer and a weekend of cricket at Edgbaston. Cheers to all 🍻

[bbonsall] 26/7/2024 16:41

What we don’t know, when speculating on losses still being made on revenue of £180 million, is whether margins have improved. If margins have improved, as Americo is intending, then decent profits are possible on revenue of £150 million.

[msparky1] 26/7/2024 12:27

Sorry sally missed the year was it 2028

[longtallsally] 26/7/2024 10:33

The more I reflect on the non entity of a TU the more I am unsurprised by the flat market reaction especially as the semi markets are generally so fully valued atm. Americo couldn’t even bring himself to commit to coming IQE growth just saying “growth opportunities”, which as usual is rather wishy washy. Anyone expecting much different in September will likely be disappointed so us investors will probably need to manage out expectations and ignore anything posted here re market opportunities because I don’t think much positive will happen until into next year. Maybe the picture will be clearer in March.

[lord loads of lolly] 25/7/2024 22:16

guildedge - if you re-read my post, you’ll see I said a doubling or tripling of the current share price was only possible & that I wasn’t banking on it.

Not sure how you work out the company’s own estimates for 2027 would only equate to a 70p share price or so. Whilst nobody believes Lemos’ 3x revenue 30%+ GM mantra, he hasn’t disowned it yet. And if you believe that would only lead to a 70p share price, I’d suggest you think again.

[guildedge] 25/7/2024 22:04

IQE will need major news to reach 180-200m revenue in 2025. With revenue growth in 2024 H2 they are only likely to reach circa 142m. The brokers are only predicting 163.89m in 2025. That comes with a 12-13m loss. Even with 184m revenue in 2026 brokers suggest a 4m loss. If they don't meet these targets a share issue would likely follow.

Revenue needs to break 190m+ for break even here. Why would the value of the company surge to 80-90p+? The companies own estimates suggest 70p in 3 or so years. Maybe just reaching the brokers targets is enough to push the share price higher?

I am not saying things won't happen eventually but I can't believe the brokers are that far off. It worries me that they downgraded the 2024 figures by 4m a week before the TU came out. At 30p that is a decent rise from the low of 14-15p. If they meet the brokers figure then maybe 30p is fine. The three major shareholders here seem to be backing the share right now.

At present no funds seem to be buying/selling in volume here. 1-2m taded most days now. Maybe 36-38p short term but that would need news to be maintained. Not sure I would buy at those prices given the double digit losses here.

Maybe the firn is holding back and will make big announcements in H2. I think the climb here will be more gradual.

[lord loads of lolly] 25/7/2024 21:30

wingnut707 - the 2017 profit & share price leap largely reflected the increased proportion of (much higher margin) photonics sales.

With the benefit of hindsight, the share price got way ahead of itself, with investors expecting both revenues & margins to continue rising.

Not altogether unreasonable then it seemed, as Admiral Nelson’s 2017 FY outlook statement stated amongst other things “Based on existing products, IQE expects compound annual growth rates (CAGRs) over the next 3-5 years of up to 10% in Wireless, 40-60% in Photonics, and 5-15% in InfraRed, with the potential for higher growth through new product introductions.”;. He also implied another 10 tools were likely to need ordering fairly imminently. Whereas, in reality, he was the one and only real tool.

So the growth never happened. Then Covid came along, further messing with the supply chain & sector stock levels.

As you say, major new customer wins are needed if the share price is ever to rerate significantly. What’s more, those wins really need to be well above the 30% GM level.

I don’t see us returning anywhere near 160p for the foreseeable. But a doubling (even tripling) of the current share price is still possible by 2027 IMHO, even if Americo only gets half way towards his stated revenue target, assuming margins have also significantly improved by then.

I wouldn’t currently bank on this outcome either, which is why I’m holding & hoping at this level. Rather than adding to average down.

[wingnut707] 25/7/2024 20:13

Tomduck/provonar thanks for your recent updates.had a look at Iqe results for 2017 giving a profit of £24 million from £154million revenue and a share price topping out at 160p . I understand inflation since then will distort the picture.I was wondering tomduck if your prediction for 2027 is £250million revenue would this be enough to make a profit near the figures for 2017.a share price anywhere near 2017 levels would be great.Provonair good to see you predicting a possible increase in GAN devices in 2025.Of course what Iqe really needs is a major deal promising real profits not only for the people who work for Iqe but also long suffering shareholders.Thanking you and holding on.

[longtallsally] 25/7/2024 15:12

It’s ok Sweenoid and a whole host of other posters predicted 60-80p by year end ;)

[tiffaboy] 25/7/2024 15:07

Alotto I was thinking the same but would have said low 20s. Just had an underwhelming Trading Update and possibly no more news or updates until September 11th.Nothing to get excited about ( or underwhelmed again) until then

[alotto] 25/7/2024 12:57

Apple you could have waited at least for 25p

[apple53] 25/7/2024 12:12

I have bought back below 30p some of what I sold at 34-35p, which itself was c. 10% of my holding.

[crosswires] 24/7/2024 17:11

I think you have both summed it up nicely Tomduck and Provanar. I suspect some of the recent falls in the Nasdaq and Semi index are to do with the likelihood of Trump getting in once more which “might” not be the best news for chip companies sales.

Certainly not much at the moment to be very positive about IQE for the short term and longer term remains very much “finger in the air”.

[tomduck] 24/7/2024 10:34

I think in hindsight Americo will regret externally saying in 2022 that he was targeting 3x revenue by 2027. He’s now caught between that rock and that hard place. We all know it won’t happen but he can’t say it, so he’s left with simply not achieving it in 2027 which will be a disappointment for many. However I never believed it possible and even 2x would have been a seriously impressive result.

I still believe 2025 will be a record revenue year for IQE, perhaps £180-200m range, then I can see £220-240m in 2026 and £250-280m in 2027. Being very bullish £300-320m is the best I can foresee in his timeframe however in my opinion so long as we are achieving over 20% margins that would still see a major share price re rate at £1+.

However I don’t think it’s realistic with what we are hearing directly from IQE to expect a major share price re rate this year, as I don’t see where the news will come to drive it yet. Clearly IQE are still saying their markets are struggling to fully recover to even get back to 2022 earnings, so it’s better to manage expectations for better news flow into 2025.

Let’s see if we get any clues on September 11th…

[longtallsally] 24/7/2024 10:18

Sadly right now, despite some uber enthusiastic posts from some, hope is all we have as there is zero evidence of new contracts and the serious growth that Americo targets.

IQE is even struggling to get back to the revenue they achieved in 2020 (£178m) let alone 3x 2022 revenues which would be £502m

[msparky1] 24/7/2024 08:48

I agree with you lolly but as a long term investor the word we all look to is HOPE .We hope that iqe will eventually realise where they should be ,we just HOPE we live long enough !!!

[lord loads of lolly] 23/7/2024 13:51

Interesting that the most pessimistic year end estimate is still >20% above IQE’s current price.

Suggests even we realists expect the forecast & outlook to be improving by end December. This morning’s faintly positive share price movement also points to this.

I wonder what it would take for sweenoid & his fellow uber-optimistic posters to turn negative on IQE? One senses they’d even try to read positives into liquidation.

[mw16] 23/7/2024 13:40

Does iqe exist in the twilight zone. They always seem to be, eternally, in the market correction phase of their industry. Their updates always seem to mention recovery and restocking. I can't remember an update that suggested boom or now recovered.

[longtallsally] 23/7/2024 12:03

I still think that if it was obvious internally at IQE that business was about to boom, we would see insiders buying.

[nickwild] 23/7/2024 10:11

On course for my 38p

[mw16] 23/7/2024 09:40

Cookie cutter statement.

[msparky1] 23/7/2024 09:02

Hi I am with you sally as an investor since 2017.Yet to see convincing evidence that IQE have turned corner ,would put a price of mid 40s for end of year that's all .It's easy to dream but you have to look at facts ,we need more proof .