Himax Technologies, Inc. – Nasdaq: HIMX
In September Taiwan-based Himax Technologies (Nasdaq: HIMX) was trading just under $11 – then the analysts started downgrading the technology company. From the end of September until yesterday there were six downgrades and yesterday HIMX settled barely above $5.
On September 23, 2016 Nomura was the first firm to issue a downgrade on HIMX – the stock dropped from $10.73 to $8.63 on volumes in exceeding 22 million shares when the average daily volume was around 2.5 million. HIMX continued to slide and the next downgrade was issued from Morgan Stanley on Nov 7, followed by five more downgrades in thirty days beginning on January 6, 2017.
So why are analysts being so hard on Himax? Himax supplies image processing technology. To over-simplify – they supply the technology that turns computer code into the picture on a screen. The company primarily supplies its technology to the manufacturers of smartphones and handheld devices but smartphone sales are slowing globally. Also working against Himax is the augmented reality sector. They are a key supplier to, and are predicted to be heavily revenue dependent on, Microsoft’s HoloLens headwear – smartglasses. The HoloLens headwear, which look like futuristic sunglasses, is Microsoft’s entrant into the 3D, augmented reality market. Analysts are not being kind to Microsoft’s 3D effort either – pushing back revenue and sales estimates into late 2017. Lastly, analysts are claiming that Himax’s technology is inferior to what the competition is coming out with.
All of these factors have pushed analysts to not only downgrade HIMX but also to forecast further downside between 20 – 30%. This represents a reversal of fortune for a Himax as their sales grew from $633 million in 2011 to $840.5 million in 2014. EPS for HIMX shareholders grew similarly – the company posted earnings of $0.06 EPS in 2011 and $0.39 in 2014. Then 2015 came and the figures declined – $0.15 EPS on sales of $691.8 million.
Analysts are forecasting 4th quarter 2016 revenues to come in between $200 and $220 million with EPS between $0.05 and $0.13. Himax Technologies is scheduled to release its earnings next Thursday – February 13.
I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.
|Last Price a/o 4:00 PM EST||$ 5.14|
|Market Cap (mlns)||$ 897.65|
|Shares Outstanding (mlns)||174.64|
|Share Float (mlns)||148.8|
|Short Interest Ratio||3.03|