Mediatek 3Q24 inline, 4Q guidance slightly weak, flattish revenue outlook and the stock is expensive
Since 4Q23, revenues have been fattish in NT$. YoY revenue growth is the result of the 2023 downturn. Our main concern regarding Mediatek is high valuations versus already 5 flattish quarters.
Conclusions
3Q24 results are inline at the Operating level and 12% above Consensus at the Net Income level, hence higher non ops gains / lower tax rate. 4Q guidance inline for revenues but 10% below Consensus at Operating level.
Smartphone revenues increased strongly in 3Q24, despite weak end demand, on Premium AI-enabled chipset in Chinese smartphones. However, 4Q revenue outlook is flat YoY and QoQ. The growth recovery period after the 2023 downturn seems to be coming to an end.
The Mediatek conundrum is that the stock is expensive versus a slow 2025 outlook. Growth drivers exists but beyond 2025. In the short term, the stock is unattractive.
Since 4Q23, revenues have been fattish in NT$, YoY revenue growth resulting from the 2023 downturn. this is our main concern regarding Mediatek: high valuations versus 5 flattish quarters.
