MagnaChip Receives a Buy from Needham

In a report released today, Rajvindra Gill from Needham maintained a Buy rating on MagnaChip (NYSE: MX), with a price target of $15. The company’s shares opened today at $10.10.

Gill noted:

“OLED revenue was the highlight of the qrt. while GM was inline despite wafer price headwinds. In our view, this quarter was critical: 1) OLED attach rates in the Chinese handset market is indeed accelerating, despite the volatility around the Apple iPhone X; and 2) demonstrates MX’s comprehensive OELD product portfolio and inherent cost advantage in OLED, and hence enabling Chinese OEMs to offer “iPhone” like experience at roughly half the BOM. OLED revenue this year is expected to exceed 2016’s figure of ~$160MM, which would still only represent less than 10% attach rate. Importantly, while still unknown, we believe MX is in a good competitive position to be a second source to Apple for the OLED DDIC next year as it is taping out a 28nm OLED DDIC with exceptional low-power.”

According to TipRanks.com, Gill is a top 100 analyst with an average return of 19.9% and a 62.5% success rate. Gill covers the Consumer Goods sector, focusing on stocks such as Everspin Technologies Inc, Smart Global Holdings Inc, and Adesto Technologies Corp.

MagnaChip has an analyst consensus of Moderate Buy, with a price target consensus of $15.

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Based on MagnaChip’s latest earnings report for the quarter ending December 31, the company posted quarterly revenue of $174 million and quarterly net profit of $43.65 million. In comparison, last year the company earned revenue of $161 million and had a net profit of $43.74 million.

Based on the recent corporate insider activity of 20 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of MX in relation to earlier this year.

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MagnaChip Semiconductor Corp. engages in the design and manufacture of analog and mixed-signal semiconductor products for consumer, computing, communication, industrial, automotive, and Internet of Things applications. It offers technology platforms for analog, mixed-signal, power, high voltage, non-volatile memory, and Radio Frequency applications.