Everspin Tanks 13% On CEO Departure, Lower Sales Guidance

Everspin Technologies on Dec. 15 announced the resignation of its CEO and President Kevin Conley, effective Jan. 30. Conley has served as CEO of the semiconductor company since 2017. Shares lost 12.7% in Wednesday’s pre-market trading.

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Effective Jan. 30., Everspin Technologies (MRAM) Chairman Darin Billerbeck, who has previously served as the CEO of Lattice Semiconductor and Zilog, will become interim CEO.

In addition, Everspin lowered its Q420 revenue guidance to between $10.1 million and $10.5 million, from the range of $10.1 million-$10.9 million provided on Nov. 5.

Last month, the company reported Q3 revenue of $10.1 million, which rose 10.3% year-on-year, but missed analysts’ estimates by $0.4 million. Higher demand for memory and storage applications benefitting from the performance and consistency of MRAM drove revenue growth. The net loss per share was flat at $0.21, but lagged the Street’s estimates by $0.17.

The stock has gained around 8% YTD and is trading at a discount of 37% to its 52-week high. (See MRAM stock analysis on TipRanks)

On Nov. 6, Needham analyst Rajvindra Gill reiterated a Buy rating on MRAM. The analyst has a price target of $10 on the stock, which implies that investors could be reaping a 76.4% gain over the coming 12 months.

“There are positive developments in the inventory levels of customers and hence we expect gross margins to rebound to 50% levels in C4Q and should expand further in CY21 due to better yields and favorable mix shift. Moreover, the design win funnel is robust, both with Toggle and STT-MRAM, which should add to revenue growth in CY21,” Gill commented in a note to investors.

“We continue to see the long-term trend towards industry MRAM adoption as positive and believe Everspin is the leading supplier in this space. Moreover, we are encouraged by the growing traction of Everspin’s 1Gb STT-MRAM device in data center and industrial IoT applications. Additionally, we expect Toggle to resume to growth and gain new design wins throughout 2020.” Gill added.