On Tuesday, Morgan Stanley up to date its outlook on Tuya Inc (NYSE:TUYA) shares, a world IoT platform, by elevating the value goal to $3.50 from the earlier $3.00 whereas retaining an Obese ranking on the inventory.
The adjustment displays a optimistic stance on the corporate’s efficiency and future prospects. The agency’s choice comes within the wake of Tuya’s current monetary achievements, which surpassed expectations.
The analyst cited a “sustained recovery in consumer electronics IoT demand, market share consolidation, and customers’ inventory restocking” as key drivers behind Tuya’s 13% income beat. Moreover, a shift in product combine in the direction of higher-value segments has resulted in a document excessive gross revenue margin (GPM).
In response to those developments, Morgan Stanley has elevated its income forecast for Tuya by 6-8% and its normalized earnings per share (EPS) estimates by 30-39% for the years 2024 to 2026. This revision takes under consideration the corporate’s efficiency within the first quarter of 2024 and anticipates continued progress.
The brand new worth goal of $3.50 implies a possible upside of over 60%, signaling sturdy confidence within the inventory’s worth. The analyst additionally highlighted Tuya’s present valuation, noting that the corporate is buying and selling at an ex-cash price-to-earnings (P/E) ratio of 4.4x for 2024 and 4.1x for 2025, which they contemplate to be fairly engaging. This valuation means that Tuya’s inventory is probably undervalued given its earnings potential.
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