Baird analyst, Tristan Gerra, raised his price target to $10 from $9 and reiterated his Outperform rating on shares of Himax Technologies (NASDAQ: HIMX). Looking ahead 2016 has a number of trending growth drivers including augmented reality (LCOS, WLO), TDDI and Force Touch, AMOLED smartphones and 4K TVs.

4Q15 revenue was $178.0 million, up 7.5% sequentially, driven by increased share of large panel business in China, along with inventory restocking and new smartphone model ramp in China. Gross margin was 22.9%, up 110bp sequentially, helped by a higher mix of Small-Medium Display Driver ICs (SMDDIC) for high end smartphones, higher-than-expected engineering fees from AR/VR project engagements with both existing and new customers, along with cost down measures. EPS was $0.04

The $181 million revenue guidance midpoint for 1Q16 is above consensus of $171.2 million. 1Q16 revenue guidance is $176-$181 million, down 1% to up 4% sequentially. 1Q16 gross margin guidance is ~25%, significantly higher than the estimated 22.7%.

2016 revenue growth drivers include augmented reality (LCOS, WLO), TDDI and Force Touch, along with the ramp of AMOLED smartphone-related wins and 4K TVs.

Himax has an impressive list of over 30 customers for its LCOS and WLO (Wafer Level Optics) products, mostly in the U.S., with little or no competition and very high barriers of entry. The company's WLO product roadmap is very promising, which in addition to augmented reality targets array cameras and 3D sensing, in integration with Himax's always-on ultra low-power CMOS sensors and near-infrared sensors.

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Shares of Himax Technologies closed at $8.10 yesterday.