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Peregrine Semiconductor Should Benefit From Improvements in its End Markets

December 08, 2014 | About:

Peregrine Semiconductor (PSMI) looks strong this year. There are a number of positive trends that should positively turn out to be stepping stones for the company this year. It should benefit this year from strong global demand for LTE smartphones and tablets. The growing complication of RF requirement for 4G phones unveils strong outlook for Peregrine going forward. Also, the wireless operators are building non-stop pressure to OEMs for supporting more frequency bands. These trends in the market should assist Peregrine to post better show in the upcoming quarters.

LTE advanced to accelerate its performance

Peregrine should benefit from the launch of LTE advanced carrier aggregation networks and extra frequency bands. The company is seeing strong demand from OEMs across worldwide for its parts that are exploited to strengthen LTE advanced networks. Also, the company is seeing strong growth in its design activities from OEMs customers in China. The company believes that these customers are in the initial phases of rolling out LTE smartphones in the region and will positively expand its sales beyond domestic consumption by next year. This trend should accelerate growth for its design activities in short as well as in the long-run.

In addition, Peregrine should gain from growing demand for increased data traffic. Also, mobile operators are consistently rolling out new LTE markets due to strong demand for increased mobile data. There are about 175 live LTE networks and approximately 249 are in pipeline. Peregrine should benefit as it has high-performing switches that are considered preferred solutions for this growing LTE spectrum. Also, more frequency will lead to more switches per phone that should accelerate its sales in the long run.

Additionally, the company sells a set of diverse product to more than 1,500 customers around the world in dozen of end markets. This end markets ranges from wireless infrastructure to broadband to test and measurement. Also, customers are now coming to Peregrine for an alternative to gas that has supreme UltraCMOS technology. CMOS technology meets the requirement of these customers as it has benefit of better quality and dependability, scalable technology roadmap and value-added cost structure.

Partnerships and products

Moreover, the company shares strong partnerships with its leading cultural module partners that should accelerate sales for its reference designs in the future. Peregrine sees tremendous growth opportunities in this market and remains strong with long-term positive trend in this market. Also, it is experiencing strong demand for its product UltraCMOS 10. UltraCMOS 10 offers one of the best and highest performances in the industry for RF SOI technologies. Also, the company remains quite strong with its growth prospects in key design sockets in the future. In fact, Peregrine has ramped up the production for Ultra CMOS 10 in good volumes.

In addition, Peregrine should benefit from its Global One integrated RF front-end family that stays quite potential. The company enjoys support for more frequency bands with the kind of targeted portfolio of products it has at its fold. Peregrine is additionally planning to expand its products that can make use of its power amplifier, which has gallium arsenide levels of performance with all the benefits of standard silicon. Besides, the company is on its toe with product enhancement that has received positive feedback from leading platform vendors across the world.

Peregrine is also gaining market share in the broadband market. The company is strong adoption of its PE42723 single pole double throw switch. This product is the only switch in the market today that has capacity to meet the stringent linearity and insertion loss requirements for DOCSIS 3.1. This innovative solution is fetching a lot of customers to its folds. In fact, the company has recently won a multimillion-dollar lifetime revenue design win with the major provider of cable TV set-top boxes in support of the rollout of DOCSIS 3.1 equipment.


Peregrine looks a great pick that has solid short-term growth opportunity. It should benefit from the strong positive trends in the market that are driving growth for its products and services. Analyst expects its earnings to grow at CAGR of 163.90% for next year. The stock is currently being traded at the forward P/E of 54.13. Its balance sheet carries total cash of $48.55 million with no debt outstanding. It has operating cash flow of $18.40 million and free cash flow of $26.13 million.

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