InvenSense (INVN) Reports Slight 2Q EPS Beat; Canaccord Genuity Reiterates Buy
Canaccord Genuity maintained a Buy rating on InvenSense (NYSE: INVN), and cut the price target to $14.00 (from $15.00), following the company's 2Q16 earnings results. InvenSense reported solid growth with sales of $112.5M, up 25% Y/Y. Non-GAAP EPS was $0.16, slightly consensus estimates.
Analyst Matthew Ramsay commented, "Overall, we believe InvenSense should drive solid growth over the next several years due to strong sales to top customer Apple, lower 6-axis motion sensor but solid OIS growth at Samsung, increasing gyroscope and OIS adoption at Chinese OEMs, and new mobile device sensor opportunities including microphones, integrated DSP and MCU sensor modules, and integrated sensor software. Long term, drones, wearables and the IoT present a diverse set of opportunities that showed progress in SeptQ, where growth will likely ramp more slowly but with more attractive ASP and margin profiles versus mobile. We believe InvenSense shares represent an attractive opportunity for long-term investors; however, near-term customer concentration at Apple will likely put a ceiling on margins and socket loss at key customer Samsung could limit growth. Reiterate BUY, but lower F'16/'17 estimates consistent with our recent smartphone estimate reductions and lower our price target from $15 to $14."
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Shares of InvenSense closed at $10.65 yesterday.