7. Indie Semiconductor Inc. (NASDAQ:INDI)
3-Year Revenue CAGR: 95.42%
Year-over-Year Revenue CAGR: 51.23%
Share Price as of September 5: $3.90
Number of Hedge Fund Holders: 16
Indie Semiconductor Inc. (NASDAQ:INDI) designs and makes specialized chips used in cars and other electronic devices. It provides automotive semiconductors and software solutions for advanced driver assistance systems, autonomous vehicles, and in-cabin, connected car, and electrification applications.
Investors are interested in this company because it brings about immense revenue growth despite its small size. It has a 3-year revenue compound annual growth rate of 95.42%. In the second quarter of 2024, 16 hedge funds were long in the company. The biggest stake is held by Soros Fund Management amounting to $16,537,673.
The company recorded a revenue of $52.36 million in Q2, exhibiting a 0.47% year-over-year improvement. This revenue was lower than Street estimates and came with a loss per share of $0.09.
These results were similar to the overall car industry, as global economic problems slowed down car production by 2%. In the next quarter, sales are expected to grow slightly, although car sales are expected to fall by about 2.5%.
The main thing that sets this company apart from its competitors is that it is the only chip vendor offering all 4 of the key ADAS sensors (radar, vision, LiDAR, and ultrasound). Hence it can offer any combination of these sensors to its partners.
Its new radar front-end application was recently validated and made it a leader in the market for next-generation radar solutions. Management noted that the company’s new product launches and current customer status will enable the company to continue delivering growth above the market and reach outsized growth levels in 2025.
Baron Opportunity Fund stated the following regarding Indie Semiconductor, Inc. (NASDAQ:INDI) in its first quarter 2024 investor letter:
“Indie Semiconductor, Inc. (NASDAQ:INDI) is a fabless designer, developer, and marketer of automotive semiconductors for advanced driver assistance systems and connected car, user experience, and electrification applications. Shares fell during the quarter as the company guided revenue growth for 2024 below Street expectations as its customers digest excess inventory in the early parts of the year. While indie conservatively still expects to be growing at a healthy 25%-plus year-over-year growth rate, well above the industry and peers, investors are concerned the inventory digestion could last longer into 2024 than initially expected despite management confidence in a strong second half of 2024 driven by over 20 new projects layering in through the year across various automakers and applications. Despite the near-term softening, we believe indie remains well positioned for growth over the medium and long term supported by its $6.3 billion design win backlog (versus $220 million in 2023 revenue), and its large program ramps in 2025, including a marquee radar-related rollout, the biggest program in the company’s history. We believe indie can continue to significantly outpace the broader industry and approach $1 billion in revenue by 2028 with premium margins, all supported by its contracted visibility.”
