Will 15% Rally in Himax Technologies Hold This Time?

Predictably, the selling in shares of Himax Technologies (NASDAQ:HIMX) came to an end during CES 2019. Himax presented at the event but also shared positive news for TDDI. It posted on Jan. 11 that it secured design wins for Tier 1 smartphone OEMs, automotive applications and additional applications.

The long-awaited news sent the stock up by around 15% last week. Are the $3.00 lows set in December 2018 and January 2019 at an end?

Short float is moderate at 12.6%. Bears made the easy money by betting against the stock around six months ago. But now that TDDI sales are set to double year-over-year, Himax’s financial should stabilize in 2019. If orders grow and the company retains market share, it may win additional orders.

HIS Market forecast TDDI sales growing from $380 million in 2018 to 510 million units in 2019. In preparation of the higher sales, Himax spent the last few quarters redirecting capex to new fabs. It will fulfill customer orders without any issues.

Qualcomm Partnership Stalled

The 3D sensing demand ended up very weak. Himax has no choice but to put its expectations on hold. Markets already punished it for lack of revenue from this segment. The stock’s PEG is just 1.15 times while the forward P/E is 20 times.

Watch HIMX stock in the next few weeks. Its earnings report on around Feb. 7 could move the stock again.