The article was written by Aline Rzetelna, a Financial Analyst at I Know First. 

“Great things in business are never done by one persons. They’re done by a team of people.” – Steve Jobs. 

HIMX Stock Forecast

Summary:

• Himax Delivers Strong Financial Results for Q3
• HIMX Start Major Ramp and Shipment Of The New WLO For Apple
• Himax Announces Partnership With Qualcomm To Develop 3D Sensing Technology For Android Smartphones
• I Know First Bullish Forecast on HIMX

Founded in 2001, Himax Technologies, Inc. (NASDAQ: HIMX) is a fabless semiconductor company that provides display imaging processing technologies to consumer electronics worldwide. The company, which has its headquarters in Tainan, Taiwan, operates in two segments: Driver IC (Integrated Circuit) and Non-Driver Products. Himax offers display driver ICs and timing controllers used in TVs, laptops, mobile phones, tablets, digital cameras, car navigation, virtual reality devices and many other consumer electronics devices. Himax also designs and provides controllers for touch sensor displays, in-cell Touch and Display Driver Integration (TDDI) single-chip solutions, LED driver ICs, power management ICs, scaler products for monitors and projectors, tailor-made video processing IC solutions, silicon IPs and LCOS micro-displays for augmented reality (AR) devices and head-up displays (HUD) for automotive. Additionally, the Company offers digital camera solutions, including CMOS image sensors and wafer level optics which are used in a wide variety of applications such as mobile phone, tablet, laptop, TV, PC camera, automobile, security, medical devices and Internet of Things. HIMX has over three thousand patents in three continents and is one of the worldwide market leaders in its segment.

Himax Technologies Reports Third Quarter 2017 Financial Results

On November 9th, 2017, Himax Technologies, Inc. reported its financial results for the third quarter ended September 30, 2017. The company has presented strong results.

HIMX revenue for the Q3 increased 29% over the previous quarter to $197.1 million. This came in at high end of the guidance range. Moreover, the company’s product sales went up in comparison with the previous quarter in all of its segments. For the small and medium-sized driver ICs, which represents almost 45% of the Himax’s revenue, the product sales increased 24.5% in comparison with the previous quarter. In the large panel driver ICs, which represents 27.9% of the company’s revenue, the product sales went up 5.4% QoQ. Furthermore, for the non-driver IC products, 27.9% of revenue, the product sales went up almost 86% QoQ, driven by the new WLO product shipment to a leading customer.

Himax gross margin exceeded its guidance by 70%, reaching the patamar of 25.5% on the Q3. The company’s Non-GAAP net income of $9.0 million, or 5.2 cents per diluted ADS, also exceeded the guidance range. The Q3 GAAP net income of $3.7 million, or 2.1 cents per diluted ADS, was in line with the guidance range of 1.3 to 2.5.

After this release of stronger-than-expected results, HIMX stock price ramped over 34% in November (See the chart below).

According to President and CEO, Mr. Jordan Wu, despite the decline in the first half in HIMX’s business, Himax delivered solid results in the third quarter, achieving both top and bottom line growth across all three major product categories.

Himax’s Projects

Wafer-Level Optics For Apple

Himax started major ramp and shipment of the new WLO (wafer-level optics) product to Apple. WLO consists of a chip that allows facial recognition on Apple’s iPhone. The WLO is part of the company’s non-driver segment.

Mr. Wu stated that the company “expect shipment to the same customer to accelerate significantly into the fourth quarter and beyond”. Furthermore, he also affirmed that the company is in parallel “working on several new development projects with the same customer for their future generation products.”

Himax Announces Partnership with Qualcomm

Himax announced recently a partnership with Qualcomm for collaboration in the development and commercialization of the state-of-the-art 3D sensing total solution for the Android Smartphone. The company expects that this solution and production capacity will be ready for mass production by Q1 2018.

The company believes that 3D sensing is among the most significant new features for the next generation of smartphones. According to Mr. Wu, “In the Android market, we are seeing leading players also aggressively looking to adopt 3D sensing. We are in close collaboration with multiple top tier Android smartphone OEMs, aggressively aiming to launch flagship smartphone models with 3D sensing total solution during the first half of 2018. By the time we started shipping our 3D total solutions, they will be major contributor to both our revenues and profit, consequently creating a more favorable product mix for us.”

I Know First Bullish Forecast on HIMX

After beating expectations in Q3 Financial Results, investors are starting to get confident again in HIMX growth story. Moreover, the development of all those projects that the company is investing on also ensures for Himax a solid position. Therefore, I rate HIMX as a buy. This rating is also supported by the I Know First bullish forecast on HIMX for the medium and long term.

Past I Know First Success with HIMX

On June 4th, 2017, I Know First issued a bullish forecast for HIMX. Since then, the stock is up 35%, in accordance with the I Know First algorithm that was sent to I Know First subscribers on June 4, 2017.

Source: Google Finance

I Know First Algorithm Heatmap Explanation

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