Full report: 

https://s27.q4cdn.com/906368049/files/News/2022/Zacks_SCR_Research_11212022_POET_Thompson.pdf

Nuggets:

1. Given its unique product offering and large TAM we believe POET shares are worth $13.82 based on peer multiples given no further equity dilution than forecast.

2. POET also sees a huge market developing in AI. Its customer Celestial AI projects selling 1 million AI accelerators of which there are four POET chips in a unit. At $100 per chip, Celestial represents $400 million in potential revenues by itself. So far, everything Celestial is planning to sell contains POET. Celestial AI is addressing a market expected to be $70 billion in 2025. 

3. In the next three months, we expect major customers to be announced surpassing those landed to date.

4. At its current burn rate, the company has a potential of seven to eight quarters of cash ($10.3 million + $4.1 million +$5 million = $19.4) from today. As revenues ramp, we expect the burn rate to decline. Cash flow breakeven is still expected at a revenue level of $20 million per quarter.

5. The stock currently trades at a fully diluted enterprise value of US$110 million. The global market for optical transceivers is estimated to be $5.7 billion in 2020 and is projected to reach a value of $9.2 billion by 2025, representing a CAGR of 10.0%, according to MarketsandMarkets. POET’s product is a component of an optical transceiver and the market is about a third of the transceiver market. If POET can secure even a small portion of that market with its unique offering, its valuation should far exceed its current price. We believe the stock could be worth US$13.82 based on $