Himax Technologies (NASDAQ:HIMX) looked like a stock to sell when shares bottomed at $1.70 last year. But a January 2020 pre-earnings report led to a doubling for investors.
Despite years of failed side projects that did not lead to revenue growth, wafer-level optics sales grew. This offset the R&D and operating costs related to its time of flight and the 3D-sensing collaboration project with Qualcomm (NASDAQ:QCOM).
In the fourth quarter, Himax posted non-GAAP earnings of a penny. Revenue fell 8.4% Y/Y to $174.93 million. It posted an upside Q1 outlook by giving the following guidance:
"Provides Q1 2020 Guidance Revenue to Increase between 1.0% to 10.0% Sequentially, Gross Margin to Increase by 1.0% to 2.0%
Sequentially, IFRS Profit per Diluted ADS to be around -0.5 Cents to 1.8 Cents, and Non-IFRS Profit per Diluted ADS to be around -0.2 Cents to 2.1 Cents."
Revenue will actually grow from 1% to 10% to $177 million to $192 million. Margins will also improve. If Himax posts another quarterly beat in three months, the stock could head into the $10.00 range. Investor confidence will build as Himax reports progress in its 3D-sensing developments.
Now that component prices are falling, the technology may be inexpensive enough for phone suppliers to use these components.
