Himax Spikes 8% On 3Q Guidance Beat

Shares of Himax Technologies are surging 8.2% after the fabless semiconductor company provided third-quarter preliminary results, which exceed its guidance issued on Aug. 6.

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Himax (HIMX) is scheduled to report 3Q results in November. The company said it expects strong business momentum across its major sectors in the fourth quarter as well.

It now forecasts 3Q revenues will increase 46.1% year-over-year and 28.3% sequentially to $239.9 million, exceeding the Street consensus of $226.1 million. The company had previously guided sequential increase of around 20%. 3Q gross margin is expected to be 22.3%, exceeding the earlier guidance of being flat to slightly down from 2Q margin of 21%.

Non-IFRS [International Financial Reporting Standards] earnings per diluted ADS [American depositary share] are set to grow by 281.6% year-over-year to about $0.073. Analysts had expected 3Q non-IFRS earnings per ADS of $0.04. Previously issued guidance was for around $0.035-$0.043 per ADS. (See HIMX stock analysis on TipRanks)

On Aug. 6, Robert W. Baird analyst Tristan Gerra raised the stock’s price target to $6 (73.4% upside potential) from $5 and maintained a Buy rating. The 5-star analyst said “Himax is currently benefiting from work-at-home trends spurring demand for displays, the ongoing ramp of TDDI [touch and display integration] notably in tablets and automotive, along with overall share gains associated with a TFT LCD [thin-film-transistor liquid-crystal display] supply chain shift to China.” He also sees significant growth opportunities into HUD (heads-up display) and AR [augmented reality] applications over the long-term.

Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 1 Buy and 1 Hold. The average price target of $5 implies upside potential of about 44.5% to current levels. Shares have surged about 30.1% year-to-date.