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Netlist (NLST) Stock Jumps 17.9%: Will It Continue to Soar?

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Netlist, Inc. (NLST - Free Report) shares soared 17.9% in the last trading session to close at $6.66. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 12.6% gain over the past four weeks.

The increase in share price can be attributed to the settlement with Micron.

Under the terms of the settlement, both companies have agreed to settle and mutually release all pending legal proceedings between them.

Further, Micron will receive a five-year term license to NLST’s patent portfolio, including server DIMMs and High Bandwidth Memory technologies.

In return, Micron will pay Netlist $30 million every quarter, beginning in the fourth quarter of 2026 and continuing through the third quarter of 2031. The payments amount to $600 million over the five-year license term, giving Netlist a recurring stream from its patent portfolio.

In a regulatory filing, NLST disclosed that Micron agreed to purchase 10 million Netlist common shares for an aggregate of $1 million, with the shares subject to a lock-up and phased release schedule over five years.

In August, NLST had announced a five-year strategic alliance with Samsung. The alliance spans patent portfolio cross-licensing, memory product supply and technology cooperation. Under the terms, Samsung will receive access to Netlist's complete patent portfolio, including server DIMM and HBM technologies. Netlist will get DRAM and NAND supply from Samsung. More importantly, both companies agreed to settle and mutually release all pending legal actions. Samsung will also purchase 10 million shares of Netlist common stock.

This company is expected to post quarterly earnings of $0.60 per share in its upcoming report, which represents a year-over-year change of +3100%. Revenues are expected to be $308.6 million, up 630.8% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Netlist, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on NLST going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Netlist belongs to the Zacks Computer- Storage Devices industry. Another stock from the same industry, Western Digital (WDC - Free Report) , closed the last trading session 6.9% lower at $411.04. Over the past month, WDC has returned -5.5%.

For Western Digital, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $4.07. This represents a change of +128.7% from what the company reported a year ago. Western Digital currently has a Zacks Rank of #3 (Hold).

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