Sunday, December 9, 2018

ams AG Decimated On Further Apple Shortfalls

It’s been a brutal stretch for companies exposed to 3D sensing, with ams AG (OTCPK:AMSSY) (AMS.S) and IQE (OTC:IQEPY) having a particularly rough year. Recent weakness tied to Apple (AAPL) has hit the sector hard (including Lumentum (LITE) ), and weak volumes, underutilized capacity, and price pressure have all combined to savage ams’s near-term earning prospects and share price.

Sell-side analysts have slashed their price targets for ams by two thirds over the past four months, with one analyst going from a target of CHF 190 to CHF 23.60, and it remains to be seen just how quickly Android adoption of 3D sensing will develop and whether OEMs will favor the structured light technology where ams is strongest. Although the shares do look undervalued even after a sharp revision to expectations, this isn’t a hill I’m particularly eager to die on and investors need to weigh the potential of 3D sensing adoption against the risk that the adoption curve will be long enough that ams’s advantages will be whittled away by lower-priced Asian suppliers.

Read more here:
ams AG Decimated On Further Apple Shortfalls

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