Roth Capital analyst Krishna Shankar weighed in today with his views on InvenSense Inc (NYSE:INVN), as the company is scheduled to report its fiscal first-quarter earnings results today after the market close.
The analyst expects InvenSense to report 1Q16 revenue/proforma EPS of $104.9 million/$0.13 with GAAP gross margin of 42.5% with seasonal guidance for 13 to 15% sequential revenue growth driven by momentum for Apple iPhone6 offsetting weakness at Samsung and momentum with China Android vendors such as Xiomi, Huawei, Lenovo, Oppo, and ZTE.
Shankar believes that gross margins may stay in 43% range in FY16 offset somewhat by higher revenues due to impact of large OEM customer discounts for customers such as Apple and Samsung. He believes that INVN opex may stabilize at current levels for new R&D programs and customer support programs to support potential large new customers and market opportunities for sensor SoCs, software development, and wearable computing/displays and microphone/audio platforms.”
Longer-term, the analyst expects that new motion processing, audio, and SoCs for wearables, Internet-Of-Things, higher-end smartphones, and new applications such as gaming, virtual reality, automotive, etc., may enrich ASPs and margins.
“We maintain our FY16 (March) revenue/proforma EPS and GAAP GM estimates of $462.3 million/$0.70 with 43% GM and our FY17 estimates of $518.5 million/$0.85 with 44% GM. We reiterate our Buy rating and our target price of $20 based on 25x our calendar 2016 proforma EPS of $0.81 relative to estimated 20% secular earnings growth.”, the analyst noted.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Krishna Shankar has a total average return of 4.4% and a 47.5% success rate. Shankar has a -17.6% average return when recommending INVN, and is ranked #1146 out of 3724 analysts.