Synaptics Looks Like Icarus Now, But Could Become A Phoenix Again

When it comes to semiconductors, whatever the market gives during the booms it can take away during the busts, and Synaptics (NASDAQ:SYNA) shareholders have been experiencing that over the past year as the shares have been hammered on weakening consumer electronics markets. Down about a third since my last update, the shares have erased significant outperformance over the SOX index and are down more than 70% this year.

I understand the concern over weak PC and mobile demand, not to mention weakening consumer IoT demand. Likewise, I understand the fears that the aggressive pricing realizations that Synaptics took in 2021-2022, and that boosted gross margins above management’s prior long-term targets, will unwind. Those fears are fair to a point, but I think the share price now overlooks the longer-term opportunities in IoT that management has already shown it can successfully target. It may take another six months or so for investors to come back to this name, and maybe longer, but the valuation here.

 

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Synaptics Looks Like Icarus Now, But Could Become A Phoenix Again