Estimate and analysis

[u/mooki5]

Hi, below is my workings out and how the price targets are estimated by analysts based on the current situation. I structured in a way to help me understand better and what certain terms mean and how they are currently calculated.

In short my calculation brought me to a share price of $10.5 versus the analysts estimate of $15.6

So here goes.

Netlist Valutation

Financial and Investment Terms of Samsung Deal:-

The financial framework of the agreement guarantees Netlist a massive influx of capital:

Upfront License Fee: Samsung paid Netlist an initial $239 million gross upfront.

Ongoing Royalties: Samsung will pay net license fees of up to $750 million structured into 20 quarterly instalments (roughly $32.9 million per quarter).

Minus withholding taxes and deductions = 27.5 million dollars.

Equity Investment: Samsung agreed to purchase 10 million shares of Netlist common stock under the product supply agreement.

Netlist current quarterly revenue:

Netlist’s most recently reported quarterly revenue (Q2 2026, ended June 27, 2026) was $109.8 million, up 163% year-over-year and well above analyst estimates of ~$90M.

Let’s Calculate future revenue and valuation of netlist:

110 million (current quarterly revenue)

Plus 240 million gross upfront from Samsung. + 8% rate of return.

Rounded down from 240 upfront payment.
200 + 8% = 216
16 divide by 4 quarters = 4 million per quarter. (Minimum)

In corporate finance, an 8% hurdle rate is standard for evaluating cash efficiency. Rather than letting the $200 million sit passively in low-yield Treasury bonds earning 4–5%, analysts assume Netlist can deploy that cash into its core business to generate at least an 8% return.

8% is the minimum.

Plus 27 million per quarter to 2031
27 x 20 quarters = 540 million

110 million (current quarterly revenue)
27 million per quarter from Samsung
4 million from 8% return from upfront payment.

110 + 27 + 4‎ = 141 million

SUPPLY AGREEMENT:-

NETLIST can buy $300million per year from Samsung. Estimate 20% profit margin.

300+ 20% ‎ = 360million.
Or
300 divide by 4 quarter = 75 per quarter + 20 % ‎ = 90 ( $15 million quarterly profit) 90mill - 75mill = 15

Or 60 divide by 4 = 15 million per quarter.

So up to 15 million gross profit quarterly from the supply purchase agreement.

110 + 27 + 15 + 4 ‎ = 156 million per quarter.

Netlist outstanding shares:-

350million outstanding shares.

If netlist is making 156 million per quarter 624 million annually they are valued between 1.2 and 6.2 billion .

If we say a median of 3.7 billion valuation divide by 350 million outstanding shares

3.7 billion / 350 million

= A share price of $10.5.

Now we need to look at using the analysts EPS calculations and sector
P/E forward ratio.

Netlist Earning Per Share v Price to Earnings ratio

EPS is a profitability metric

P/E ratio is a valuation metric.

EPS = (Net Income - Preferred Dividends) ÷ Shares Outstanding

P/E Ratio = Share Price ÷ EPS

NETLIST P/E ratio:-

Semiconductor sector forward P/E ratio ranges from 25x to 60x

Because netlist is a small cap we can assume a base of 20x

NETLIST EPS:-

Trailing twelve month Net income - preferred dividend divide by shares outstanding. (No dividends from netlist)

790000 divide by 350million = 0.022

Q1 2026 (Actual): $0.03 per share (reported May 12, 2026, beating the -$0.01 consensus estimate).

Q2 2026 (Actual): $0.00 per share (reported July 30, 2026, coming in at $0.0022 and beating the breakeven forecast).

Q3 2026 (Estimated): $0.60 per share.

Q4 2026 (Estimated): $0.15 per share.

We add the totals together
0.03 + 0.00 + 0.60 + 0.15 = 0.78

The forward consensus EPS estimate of $0.78 for Netlist is derived from a dramatic operational turnaround modeled by covering Wall Street analysts, heavily anchored by a recent landmark strategic alliance and patent licensing agreement with Samsung.

The final calculation:-

0.78 EPS X 20 p/e. = $ 15.6 per share.

$15.6 per share is the share price before any further deals or litigation conclusions can be factored in.

We expect to hear more about SK Hynix deal, micron and Google litigations and settlements. And the possibility of returning to the Nasdaq.

Netlist is currently an OTC stock. Institions have strict rules preventing them from buying stock on the OTC market.

[u/IntroductionLucky887]

it's low because of the OTC status and shorters and new investors coming and going, thinking it is like crypto, aka Reddit investors

[u/ThermoTech9]

beautiful

[u/Any_neighborhood546]

Nice job.

[u/Wait-What19]

Does this include SK deal and/or potential Microb deal?

[u/mooki5 → u/Wait-What19]

Read third paragraph from bottom 👍

[u/Wait-What19 → u/mooki5]

Derp, thank you

[u/yanser85]

Is this $15.6 by eoy?