Synaptics Poised to Rebound in 2018

On Tuesday, Dec. 12,

Revenue growth guidance for the midterm remains 15% along with an increase in adjusted gross margin midpoint from 35.5% to 37%. Consumer Internet of Things currently accounts for roughly 25% of revenue and remains a chief growth engine for Synaptics as it solidifies its place through far-field voice and video processing solutions (from recent acquisitions: Conexant and Marvell’s multimedia solutions business, respectively). Within mobile, we think Synaptics will benefit from non-Samsung OLED capacity ramps and in-display fingerprint sensors, which management expects to exceed the 15% top-line growth target. Meanwhile, touch and display integrated solutions are forecast to rise in the mid-single digits, consistent with our model, while discrete display driver chips for LCD screens (most prominently for Apple), will decline considerably to serve as an offset due to the shift by Apple to OLED screens.

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