NLST - Netlist: Underwhelming Q1 2024 Results As Gross Margin Shrinks To 2%

2024-05-01 00:23:42 ET

Summary

• The company’s revenues soared by 296.9% to $35.8 million in Q1 2024 thanks to a strong global memory market.
• However, the gross profit margin shrunk to just 2% and the operating loss rose to $17.4 million due to higher legal expenses.
• Netlist has suffered setbacks on the legal front in recent months and I think the company could run out of cash before the end of the year.
• The short borrow fee rate is less than 10%, but there are no options available, and the short squeeze risk seems high.
• I think risk-averse investors should avoid Netlist’s stock.

Introduction

I’ve been following chipmaker Netlist (NLST) closely and I’ve written a total of five articles about the company on SA since 2021. The latest of them was in October 2023 when I said that the financial results of Netlist were deteriorating, and the share price could go down below $1.00 before the end of 2023....

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