GT Advanced Technologies: Severely Misunderstood And Undervalued By Wall Street Analysts – By Matt Margolis (posted today at Seeking Alpha)
- Current analyst estimates for GT Advanced Technologies do not reflect significant revenue that will be booked outside of Apple in 2015 and 2016.
- Shares of GTAT are fairly valued at $64 to $85 per share, assuming a 15-20x FY16E EPS of $4.26.
- Adoption of sapphire cover screens on Apple’s iPad would provide a significant upside to revenue and EPS estimates.
I wrote my first Seeking Alpha article on GT Advanced Technologies (GTAT) on January 21, 2014, GT’s share price was around $9 and there was a lot of questions regarding Apple (AAPL) and the use sapphire cover screens. In less than 2 months GT’s share price has nearly doubled after touching $18 within the last week. Based on what I know about GT’s technological war chest and the upside potential across GT’s business portfolio, it is clear to me that the welcoming party for GT shareholders hasn’t even started yet. GT’s management indicated their focus was to execute on their commitments to Apple and prepare GT to become a world class supplier of sapphire material for a variety of other customers. In addition, GT indicated they would like to expand their materials business into other material segments outside of sapphire. Lastly, they seemed very excited that their diversification strategy is on schedule to bear fruits across LED, power electronics, advanced solar and industrial markets.