Needham & Company Downgrades Synaptics (SYNA) to Hold

October 28, 2016 7:28 AM EDT
Get Alerts SYNA Hot Sheet
Price: $53.70 --0%

Rating Summary:
    13 Buy, 6 Hold, 1 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 11 | Down: 8 | New: 3
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Needham & Company downgraded Synaptics (NASDAQ: SYNA) from Buy to Hold.

Analyst Rajvindra Gill commented, "

We are downgrading SYNA to a Hold from a Buy on a significantly lower gross margin profile. While we wrote about our concerns of gross margins trending down as TDDI represented a higher mix of sales (lower GM), the extent of the gross margin decline moves us to the sidelines (guided GMs 450 bps lower than our est. at 33.5% mid-point). Even though revenue came in ~7% higher for the Dec. guide, the lower GM profile led to the EPS miss. While SYNA is managing OPEX well, we are always concerned when gross margins decline in the semiconductor industry - there's a high correlation to gross margins to semiconductor stock prices. The company is ramping TDDI well, revenue is essentially doubling quarter-over-quarter at 15% of sales and fingerprint designs are also accelerating, but need to see evidence that gross margins can recover."

For an analyst ratings summary and ratings history on Synaptics click here. For more ratings news on Synaptics click here.

Shares of Synaptics closed at $67.70 yesterday.

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