The earnings season creates entry points for value investors looking for a discount. While the following three stocks have the risk of not returning to a rebound in business, the stock dip is notable.
Synaptics (NASDAQ: SYNA) fell 5% last week after reporting $0.92 a share in earnings, while revenue fell 11.3% Y/Y to $394 million. Q4’s guidance is poor: revenue will miss the $418.8 million consensus and coming in at $370 million - $410 million. Mobile product revenue falling 34% Y/Y was the culprit. It makes up for most of the company’s sales. SYNA stock risks breaking below $40.
Nuance Communications (NASDAQ: NUAN) is a voice recognition software company whose stock was on my watch list for many years. The strong quarterly results in the past proved transient: management and the CEO are not leading the company to growth. Instead, they are enriching themselves. Q2 profits missed consensus calls and revenue rose only 1%.
The outlook is poor: new bookings fell 8% to $376.6 million. Recurring revenue fell by 4% to 71%. CEO Ricci gets paid too much, at $20 million, for these results.
Symantec (NASDAQ: SYMC) plunging 33% is more than notable. Unfortunately, the audit probe into its finances is troubling. How the anti-virus software company, which is probably losing business to Microsoft (NASDAQ: MSFT) and other better, free, options, accounts for revenue may be too aggressive
