Q: Both of these names have had a nice pop in the last quarter. Do you have a preference, or both?
5i Research Answer:
Both companies look decent here, however we like STLC more due to growth outlook and size. STLC is forecasted ~6% growth in revenues and an 80% increase in EPS in 2024. Both these forecasts are significantly higher than ASTL, while ASTL's forecast suggests a decline in revenues in 2024. Valuation is nearly identical for both companies at 8.9x forward earnings for ASTL and 8.5x forward earnings for STLC. ASTL is a bit smaller at $1.31B market cap, while STLC stands at $2.68B market cap. ASTL does have a lower debt balance and a net cash position, but STLC's net debt position is relatively small due to a high cash balance. We prefer STLC here due to the higher growth forecast in 2024.