Analysts Weigh in on Two Semiconductor Stocks: Integrated Device Technology Inc (IDTI), Pixelworks, Inc. (PXLW)

Analysts from Cardan Capital and Roth Capital weighed in on semiconductor companies Integrated Device Technology Inc (NASDAQ:IDTI) and Pixelworks, Inc. (NASDAQ:PXLW) following recent earnings announcements. While one analyst remains bullish on Integrated Device Technology after the company posted earnings, the other comments on Pixelworks’ management changes, stating a positive move though cautious on the effect that macro challenges will have on earnings going forward.

Integrated Device Technology Inc

Analyst Marc Estigarriba of Cardan Capital Markets recently weighed in on Integrated Device Technology after the company posted Q3:15 earnings. The analyst pointed to a “solid quarter above market growth” as the company posted y/y growth in revenues, margins, and EPS. While segments such as communications and computing suffered a drop this quarter, the consumer and automatic segments increased 39%, leading the analyst to predict revenue growth for the next quarter.  The analyst is also bullish regarding the recent acquisition of ZDMI, and believes it will contribute $80M a year to the company. Despite his bullishness, the stock plummeted 22% due to weaker than expected revenue guidance and uncertainty regarding the effect of the ZDMI acquisition.

On another note, the analyst claims that “The current turbulent macro affected IDTI a bit, as customer growth slowed slightly and softness looks to remain for the upcoming quarter.” In spite of this, the analyst notes management’s expectations of “content gains toward this latter half of 2016 in new areas.” Overall, the analyst is bullish on the company due to “healthy double digit, above market average CAGR growth in sales, earnings and FCF,” and its “well positioning in a niche growth sector.”

On February 2, 2016, the analyst reiterated his Buy rating and $34 price target on the stock. Marc Estigarriba has a 0% success rate recommending stocks with an average loss of 15.4% per recommendation.

According to TipRanks’ statistics, all 4 analysts who have rated the company in the past 3 months are bullish. The average 12-month price target for the stock is $27.75, marking a nearly 50% increase from where shares last closed.

Pixelworks, Inc.  

Analyst Krishna Shankar of Roth Capital commented on Pixelworks after the company announced management changes and preliminary Q4 results. The company announced that CEO Bruce Walicek would be replaced and Todd DeBonis of QRVO would step in as COO to increase mobile market growth. Management also guided lower Q415 revenues and “indicated near-term weak macro headwinds in China/emerging markets.”

As a result of these management changes, the analyst expects the company to “focus unlocking shareholder value” by ensuring that Pixelworks remains a market leader in the “mature, cash-cow projector chip business” as well as focus on mobile market growth. The analyst also expects operation optimization as well as “converting design win activity for Iris mobile platforms to revenue.” He also expects the company to ease investor concern regarding “slow growth in iris mobile chip/licensing revenues,” which he states will be “modest” for 2015, although expects growth in later years.

Despite Chinese and emerging market economic difficulties, which represent 30-35% of global projector demand, the analyst is bullish regarding PXLW’s “leadership in the projector businesses.” He believes the company’s Iris segment is improving in terms of “power, performance, [and cost-optimization],” and is bullish regarding prospective customers such as Apple, Samsung, and HP purchasing the company’s Chip/IP technology. Even though the analyst projects growth, he is lowering his revenue and EPS estimates for 2015-2017 as well as his price target on the stock “due to the weak macro environment”.

On February 2, 2016, Shankar reiterated a Buy rating on the company though lowered her price target from $6 to $4. Overall, Shankar has a 38% success rate recommending stocks with an average loss of 6.3% per recommendation on TipRanks.

Krishna Shankar Stats

Out of the 2 analysts who have rated the company in the past 3 months on TipRanks, both gave a Buy rating. The average 12-month price target for the stock is $5.50, marking a 290% upside from where shares last closed.


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