Synaptics (SYNA) Surging After Announcing Renesas Partnership

Jianyu Zhao |

Synaptics stock, Renesas, SYNA, LCD drive unit, Renesas stock, mobile phonesApple (AAPL) , for $475 million. The deal is expected to pave a potential path for Synaptics to win back Apple as a customer. The stock of Synaptics then has been increasing 27.35 percent to $84.72 per share since the open. As of 3:00pm EDT, 8.22 million shares were traded, compared to the average volume of 1.28 million per day.

Renesas a Key Player for Apple Products

Renesas SP Drivers, Inc. is a division of the Japan-based chip manufacturer Renesas Electronics Corp. (RNECY) , which is also known as the industry leader in small and medium-size display driver ICs (DDICs) for smartphones and tablets.

Synaptics will buy the full unit in cash, which, as the company said in a press release, can help grow its addressable market by 150 percent, and “accelerate its product roadmap for touch-and-display driver integration.” The combination enables platform-level solutions for select segments of the mobile market as well as extending its leadership position in Touch and DDIC product families.

“The acquisition of Renesas SP Drivers unites complementary and best-in-class technologies and brings on board a very experienced, highly skilled engineering team, strengthening Synaptics’ position as the number one touchscreen controller supplier to the mobile display market, with unmatched platform level technologies,” said CEO Rick Bergman.

Positive Outlook For Fiscal 2014 Boosted

The move also prompted Synaptics to increase its revenue guidance for Q4 of fiscal 2014. Due to the growing demands of mobile and PC, the company now raises its revenue range to $300.0 million and $310.0 million from the previous guidance of $275.0 million to $295.0 million, beating the consensus estimate of a Thomson Reuters poll of $285.8 million.

SYNA’s Doing Well

Synaptics' investors are likely happy with these new figures. The company’s strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels, solid stock price performance and expanding profit margins.

According to Equities.com’s EVA Reports, the company’s revenue growth was 21.04 percent in fiscal 2013, significantly higher than the industry average of 3.20 percent. Synaptics also maintains a quick ratio of 3.00, demonstrating the ability to cover short-term cash needs, and a gross profit margin of 47.70 percent, which is strong compared to the rest players in the market.

Compared to its closing price of one year earlier, the share price for Synaptics has leapt 56.95 percent, exceeding the performance of the broader market.

The San Jose, Calif.-based Synaptics develops, markets, and sells custom-designed human interface solutions for electronic devices and products primarily in China, South Korea, Taiwan, Japan, and the United States.

 

 

 

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Companies

Symbol Name Price Change % Volume
AAPL Apple Inc. 109.90 0.41 0.37 26,527,997
SYNA Synaptics Incorporated 52.30 0.08 0.15 467,272
OSEMF Osem Investments Ltd 20.51 0.00 0.00 0

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