Augmented reality remains of particular interest in the future, as the analysts project accelerated growth in near term
Himax Technologies, Inc. (ADR) (NASDAQ:HIMX) jumped 18% in August according to S&P data and continued surging 0.47% in the market on Thursday. The performance can be commended, as it has risen 29.51% year-to-date through Thursday.
Compared to this, the shares of rival Maxim Integrated Products Inc. (NASDAQ:MXIM) increased only 2.6% in the market on YTD basis. Furthermore, on YTD basis, even Nasdaq and Dow Jones are rising just 4.84% and 4.51%, respectively. This could be the result of its better than expected revenues. It had pleased its investors by increasing its revenues 18.8% year-over-year. The revenues grew on strong Augmented Reality outlook as the division started showing healthy future prospects.
Furthermore, it has 343.82 million outstanding shares in the market. These shares have a one year stock value of $5.77-12 and daily stock value of $10.49-10.71. The main reason that the semiconductor producer showed exceptional results was that it reported solid wins in this growing segment. The analysts believe that it is well positioned to benefit from the expanding AR segment.
This segment would in turn result in higher revenues for wafer-level optics and liquid crystal, especially in the second half of FY16. CEO Jordan Wu believes that the segment is expanding to include smartphones that hold long term growth potential as the market has shown prospects of growing into a multibillion dollar industry.
In addition to this, the management holds several reasons to be bullish on AR position. The foremost reason could be that the Taiwanese company has high expertise in the area as it has been working in the industry for past 15 years, leading it to have a competitive edge in terms of designs in the recent years.
It is also believed to have a secured a spot with Microsoft Corporation (NASDAQ:MSFT) to bring AR headsets to the market. The headsets would take time to realize gains but still pose huge contributions in the initial stages. Firms like Morgan Stanley also have high hopes as they believe that 14% of the revenues is to be generated from this segment in FY16.
Under these expectations, investors have gained bullish sentiments as the $1.77 billion company already started growing revenues in the non-driver businesses that includes AR segment revenue in the second quarter. They believe that the company holds huge potential as the segment is showing signs to grow to $90 billion by FY20.
Thus, it shows enough potential to deliver on its AR expected results. As a result, Himax Technologies has largely received six Buy, one Overweight, and two hold evaluations from the analysts at FactSet Fundamentals. The average price target has also been given at $11.76, showing potential to rise by 10.79% over the closing price of September 15.