After spending September in the $10 - $11 a share range, Himax Technologies (NASDAQ: HIMX) fell sharply in the week of October 9. An analyst downgraded HIMX stock but the consensus estimate is still $11.50 price target.
Mizuho downgraded Himax for no fundamental reasons. In the last month, Himax co-announced a 3D camera sensing partnership with chip giant Qualcomm (NASDAQ: QCOM). It disposed of an investment in a China-based company, netting $32 million in proceeds. Himax paid only around $9 million for the asset. The upcoming growth in WLO and augmented reality components was not enough to impress the analyst.
Himax’s valuations are in the high range that would deter value investors from buying the stock. At a 23x forward P/E, Himax must deliver on orders and grow revenue as the market expects. It is unlikely the stock will fall back to past lows but markets are impatient. Still, the stock pays a healthy dividend of over 2.5 percent, a rate that should limit the downside on the shares. It will also keep its long-term investors happy.
As business grows through 2018 and beyond and smartphone companies adapt 3D scanning and sensing in the new models, Himax will benefit.
Tech Insider
