Dougherty: AuthenTec Embedded Security Business Building Momentum

In a research report published today by Dougherty & Company, AuthenTec Inc.'s

embedded security business is buying time for the fingerprint sensor business. According to Dougherty, “We estimate that the Embedded business has delivered $7.5MM of EBIT (ex stock-based comp and one-time items) in the last two quarters alone. AuthenTec paid just over $11MM for this business two years ago. It has been an absolute home run. Meanwhile, the sensor business did not have a great quarter. The main culprit seemed to be weak shipments of enterprise PCs (where fingerprint sensor penetration is higher) into Europe. We are willing to digest some PC softness so long as AUTH is building toward a ramp in mobile.” Dougherty & Company maintains its Buy rating and $5 PT on AuthenTec, which closed Friday at $3.43.