Syna Tumbles

NEW YORK (TheStreet) – Shares of mobile phone components maker Synaptics (SYNA) are tumbling after research firm Pacific Crest downgraded the stock, saying that the company had probably lost an important contract.

WHAT’S NEW: Pacific Crest analyst John Vinh downgraded Synaptics to Sector Perform from Outperform in a note to investors today. Synaptics, which had supplied touch controllers for Samsung’s Galaxy S smartphones, was probably not chosen to provide the component for the upcoming Galaxy S 6, according to Vinh. A competitor, STMicroelectronics (STM) , was able to offer a touch controller that was “good enough,” and significantly cheaper than Synaptics’ controller, the analyst stated. Synaptics should be able to compensate for the loss by selling more of its other components, but Samsung’s decision is likely to increase investors’ concerns and cause the stock’s multiple to decline, Vinh believes. Additionally, Synaptics is having problems with the development of its fingerprint algorithm and is looking to license software from other providers in order to solve the difficulties, Vinh stated. Increased competition in touch controllers and the difficulties with fingerprint algorithms could cause Synaptics’ profit margins to drop, warned Vinh.…



I do not know if they lost the contract for the Samsung S6 but I would doubt that Samsung would go with something that is “Good Enough” for their flag ship product but maybe I am wrong. Here is a blurb the company put out on December 4th though. Raising their Revenue estimates.

“As a result of our dynamic growth over the past few years, Synaptics is now a much larger company with increasing global scale. We believe we have the right vision, talent and technological innovation to continue our position as the leading human interface company. This transition provides an opportunity to find another world-class CFO to provide strong financial leadership to take us through the next phase of our growth,” concluded Mr. Bergman.


Sorry about that here is the link.