Receives $11.3 Million in EOL Purchase Orders

Yesterday morning, Peraso (PRSO) announced that the company has received $11.3 million in non-cancelable purchase orders for its memory IC products. Recall that the company previously announced the end-of-life for its memory IC products and guided for these final purchase orders to total $15.0-$20.0 million. With a majority of the expected orders in hand already, we believe Peraso is well on its way to achieving its initial target and may very well surpass management’s prior expectations when all is said and done. More importantly, fulfillment against the initial orders has commenced and while a portion of the shipments will extend into next year, we surmise cash flow should see a boost in the interim. This in turn could push out the need for another capital raise in FY ‘23, positioning the company to bolster its balance sheet when conditions are potentially more favorable. Considering the improved visibility into the winddown of the memory IC business and the positive cash flow implications, we were surprised to see the stock ultimately trade lower on the day. Our price target remains $1.00 based on a FY ’23 EV/Sales multiple of 2x.

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Disclosure(s):

K. Liu & Company LLC (“the firm”) receives or intends to seek compensation from the companies covered in its research reports. The firm has received compensation from Peraso Inc. (PRSO) in the past 12 months for “Sponsored Research.”

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