Rubicon Technology Grows with Increased Sapphire Demand

Jacob Harper |

All it took was a vote of confidence from JPMorgan Chase and Co. (JPM) to get Rubicon Technologies (RBCN) above a $300 million valuation and thus pushing the stock into the commonly held definition of “small-cap” status.

In their analyst note, JPMorgan notched Rubicon from Neutral to Overweight, and raised their price target on the stock from $12 to $14 a share. Analyst Paul Coster noted the company’s “sapphire” growth crystal technology, a major part of LED industry, was due for a big ramp-up as demand increases for wearable tech. He wrote, "Ramping demand for LEDs and sapphire covers used in smartphones and wearable CE devices should drive strong sales of sapphire cores, wafers, and specialized optical components for the industrial sapphire market and for Rubicon, leading to a recovery in gross margins and a return to net profit in late 2014, followed by a strong earnings recovery in 2015.”

Rubicon also received a vote of confidence from UBS, who maintained a Neutral rating on the stock but raised their price target from $9.50 to $12 a share. And on March 18th, analysts at Davidson raised their price target on shares of Rubicon from $13 to $17 a share.

Rubicon is slowly climbing back up the charts after deflating in 2011, where the company saw shares more than halved, as the company reversed a string of earnings beats in 2010 with a plunge into the red. The company has consistently been losing money, although the growing revenues from increased sapphire shipments should mitigate the size of the loss, if not possibly bring the company back to the black.

By midday trading, Rubicon had gained 14.18 percent to hit $12.89 a share. They're up 92.4 percent from the April 1 of last year.

With the day's rise, Rubicon now sports a valuation of $332.37 million. Volume was heavy, with over 1.3 million shares moved by 2pm against an average daily volume under 800,000.

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