Late last year, Himax Technologies (NASDAQ: HIMX) and Qualcomm (NASDAQ: QCOM) both jointly announced a 3D sensing development deal. With nearly a year since the news, the hype is not yet playing out. Himax updated investors on Oct. 5, though, when it pre-announced some revenue strength in the coming quarter. Could its 3D Sensing finally add to revenue?
Himax said that revenue will increase 3.9 percent from the previous quarter. Large display driver ICs and TDDI chip output is higher than expected and will lift revenue. Gross margin will be 23.4%, up from the 22.5% guidance given previously. Instead of losing a cent a share, Himax will earn $0.05 a share ($0.026 EPS non-IFRS).
The earnings are paltry but it is a start, especially after the stock lost nearly half its value since the start of the year. On the chart, HIMX stock is showing a "multiple bottom" at the $6.00 level. If the company convinces investors orders and output are growing in a sustained way, then the stock will not fall below the $5.75 - $6.00 range for very long.
At a 41x P/E and 30x forward P/E, Himax is not a cheap stock. You could buy II-VI (NASDAQ: IIVI), which fell 15.5% last week, Lumentum (NASDAQ: LITE), down 8%, or venture into Applied Opto (NASDAQ: AAOI) or Broadcom (NASDAQ: AVGO) for a better discount on a stock.
