Investors finally gave up on Himax Technologies (NASDAQ:HIMX) after years of promises failed to deliver on growth. Between April and July, the stock failed to break out above $3.50. And after ending last week at $2.99, markets signal that it is unwilling to hold the stock ahead of the earnings report scheduled for Aug. 8.
Selling pressure accelerated when Roth downgraded the stock to "neutral" and set a $3.50 price target. Roth wrote "We believe HIMX represents a differentiated investment opportunity as a diversified display and sensor semiconductor vendor. While HIMX has strong technology offerings across smartphone display driver and 3D sensing, we believe recent macro, smartphone demand and 3D sensing competitive updates are hampering the company’s near-term growth opportunity."
Innovation in the smartphone market is slowing. When Himax started development of 3D sensing with Qualcomm (NASDAQ:QCOM), the solution was too expensive for customers. Manufacturers are unwilling to buy expensive solutions, forcing Himax to develop a less expensive solution.
Rumors that Apple (NASDAQ:AAPL) disbanded its AR/VR headset is a big setback for Himax. Without a new market for growth, Himax only WLO (wafer-level optics) to rely on. But until the demand for WLO or TDDI for smartphones improves, Himax stock may find new lows in 2019.
Tech Insider
