Microsoft (NASDAQ:MSFT) teased a Hololens 2 in development even though Hololens 1 is not on the market yet. The news is still good for Himax Technologies (NASDAQ:HIMX), which supplies components for the VR device. Fortunately, the first-quarter earnings report added nothing new. Management did not say much about its LCoS and VR customer orders either. But if VR interest picks up, HIMX stock may get some buzz yet.
Himax reported that revenue grew just 6% Y/Y. It forecast downbeat Q1 revenue: a decline of 14% - 19% and an EPS loss will disappoint investors who held this stock for years. But after losing more than half its value from the double-digit highs last year, the stock is a worthwhile speculation.
Himax has three opportunities ahead. First, 3D sensing, at a lower cost point, could convince Android phone makers to take the risk and adapt its technology. 3D sensing has a use case in automotive, security cameras, and other applications. Second, VR is an unexpected tailwind. The third growth potential is in 8K televisions and WLO demand.
Stronger Second Half (2H)
Himax will pay its annual dividend in the second half of the year. It also expects TDDI demand recovering as manufacturers launch slim bezel phones. At sub-$4 a share, take another look at starting a position in Himax stock.
