By Lisa Thompson
NYSE: GCTS
READ THE FULL GCTS RESEARCH REPORT
GCT Semiconductor (NYSE: GCTS) reported the fourth quarter and 2025 year last night and slightly exceeded our estimates. While 2025 results were disappointing overall, the company is beginning to recover, having posted sequential revenue improvement. Orders are beginning to come in, and we expect that at some point, we will hear about a meaningful backlog, even if the company is not yet able to reveal from which customers the orders are. Once these customers announce their products, we expect to learn who they are. On the call, management discussed its new licensing agreement with a very large satellite communications company that currently has a sole source arrangement with GCT and could buy as much as $40 million annually based on volumes from its current supplier.
In Q4, the company generated revenues from three customers, with one being a production order. In Q1, GCT is expected to supply products to 3-5 different customers and expects to reach over $2 million in sales. This is a meaningful improvement from the $758,000 reported in Q4 2025. Management expects sequential quarterly revenue growth for the foreseeable future.
In March, the company exhibited at Mobile World Congress in Barcelona and had lots of interest and over 50 meetings with companies primarily in the satellite, automotive, FWA (fixed wireless access), and millimeter wave industries. Of note is that many companies are seeking non-Chinese sourced components, as the FCC is moving to scrutinize and restrict what is going into devices, specifically calling out routers, which can have a broad definition and include FWA.
While it has been a long journey, we believe the company is well-positioned to gain traction, and the next few quarters should show that it is on its way to meaningful revenues. In 2027, the company should be able to reach over $100 million in revenues. As a show-me stock, it now just has to get there. We believe the stock is worth $4.40 based on $95 million in revenues in 2027 at 3.65x EV to Sales. This is conservative, using only half the valuation of its peers.
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