Netlist stock is a buy, Roth says

Roth Capital Markets analyst Suji Desilva said in a July 3 report that Netlist (Netlist Stock Quote, Chart, News, Analysts, Financials NASDAQ:NLST) has strengthened its balance sheet through a registered direct offering, providing near-term support for its strategic plan and ongoing litigation. Desilva maintained a “Buy” rating on the stock with a 12-month price target of $2.00.

“NLST raised gross proceeds of $12m through a registered direct offering, resulting in an incremental ~17m shares,” Desilva said. “With this raise, we believe NLST’s cash balance should comfortably come in just under $40m in 2Q25, supporting the company’s near-term operating plan and bolstering prolonged litigation efforts. We believe that cash burn will moderate in CY25 as litigation spend moderates and product resale revenues remain healthy.”

He said Netlist also issued two warrants for each share, with a strike price of $0.70 and a five-year exercise window.

“We are including these warrants in our share count starting 3Q25 in our model, resulting in minor adjustments to our EPS estimates,” he said. “Additionally, as part of the funding, CEO Chuck Hong purchased $3m of the offering, further increasing our confidence in a constructive near-term outcome for the company.”

Desilva said ongoing litigation against Samsung and Micron in East Texas is moving in a positive direction for Netlist, as the company works to secure hundreds of millions in potential awards or negotiate long-term patent licensing deals for its memory technologies, including DDR, LPDDR, and HBM.

“In July 2025, the judge in the MU East Texas case provided a final court order in the $445m damages award against MU covering the 2021 to 24 periods for NLST’s ‘912 and ‘417 patents,” Desilva said. “We believe this will push this case to the appeals process, which typically runs 12-18 months on average.”

Desilva said the appeal of the $303-million damages verdict against Samsung from September 2023 is ongoing and is expected to be resolved by mid-2026.

“We expect additional case opportunities in the coming months to increase pressure on these large memory companies to settle in a manner like the current NLST licensee Hynix (000660.KRX-NC),” he said. “We believe continued healthy data-center demand can drive favourable revenue for NLST’s memory products in the near term.

Desilva expects Netlist to generate $134-million in revenue in fiscal 2025, rising to $150-million in 2026. He estimates a non-GAAP EPS loss of $0.07 in 2025 (improved from a prior estimate of $0.09) and $0.04 in 2026. Adjusted EBITDA was not provided.

Netlist makes high-performance memory products that combine DRAM and NAND flash for cloud and big data applications. Its newest product, HybriDIMM, is the first storage class memory to run on current servers without hardware changes, scaling memory to terabytes and speeding storage to nanoseconds. Founded in 2000, the company is based in Irvine, California and has about 75 employees.

-30-