This tech company is on the radar of Wall Street, where analysts have recently upgraded its shares and raised its price target to $90 per share.
Synaptics (SYNA)
from Upside
Synaptics (SYNA) shares have delivered a 16% total return this year yet trade at just 14 times trailing earnings—35% below the average for S&P 1500 technology stocks. The company reported solid March-quarter results and encouraging guidance for the current quarter. Per-share earnings reached $0.63 excluding items, down 20% but $0.06 above the consensus. Sales jumped 25%, marking the fifth consecutive quarter of growth in excess of 20%.
The results included the first full quarter of the fingerprint business Synaptics acquired in a deal worth up to $255 million. The deal keeps Synaptics at the forefront of mobile technology and could help expand its share in high-end devices. It also continues Synaptics’ transition toward mobile devices (74% of March-quarter revenue, compared to 51% in the same quarter two years ago) and away from PCs (26%, versus 49%).
The midpoint of Synaptics’ June-quarter sales guidance is $285 million, implying 24% growth and exceeding the consensus of $231 million at the time of the announcement. Synaptics is rated Best Buy.
Richard J. Moroney, CFA, Upside, www.upsidestocks.com, 800-233-5922, May 5, 2014