Revenue is turning and AI power is growing. At 20 times my 2027 earnings of $4 the stock sits near $80, a market-like return from $79.41.
Key points
- $6.5 billion is management’s 2026 revenue estimate; I use it as the base.
- $4.00 is my 2027 non-GAAP earnings per share after 12% growth and 43% gross margin.
- 20 times that earnings produces an $80 twelve-month target, even with the stock.
The call
The shares at $79.41 require about $4 of 2027 earnings at 20 times, or faster growth at a richer multiple. That is the old-cycle earnings power of 2023, delivered on a smaller sales base after a two-year contraction.
I believe the company can earn that $4. Utilization is 83%, book-to-bill is above one, and AI data-center sales are set to more than double this year. I do not give the stock a higher multiple until 2027 sales and margins print, not just guide.
Revenue ($ billions)Company filings through Q2 2026; Q3-Q4 2026E and 2027E are mine
Valuation
| Item | Figure |
|---|
| 2026 revenue (company estimate) | $6.5 billion |
| 2027 revenue (mine, +12%) | $7.28 billion |
| 2027 gross margin / operating margin | 43% / 25% |
| 2027 earnings per share (mine) | $4.00 |
| Multiple | 20 times |
| 12-month target | $80 |
Twenty times is a mid-cycle analog-and-power multiple, not a peak. If 2027 earnings land at $4 the stock is fairly set; if they miss, 16 times on $3.50 is about $56. The rating is hold because the gap either way is small.
Gross margin, reported vs my pathSEC XBRL through Q2 2026; Q3 2026E and FY27E are mine
Risks
- AI data-center shipments stay prioritized and auto or industrial restocking stalls; watch sequential auto revenue.
- Synaptics cash deal at $5.7 billion closes with extra debt and delayed synergies; watch mid-2027 close and leverage.
- Gross margin stays near 39% instead of 43% if utilization slips; watch the next two prints versus 40-42% Q3 guide.
What would change my mind
Two quarters of revenue above $1.75 billion with non-GAAP gross margin above 42% would justify 22 times and a buy.