What Wall Street Is Saying About OmniVision Technologies

OmniVision Technologies, Inc. OVTI reported fiscal Q3 results Thursday.

Revenue came in at $292.3 million versus estimates of $292.12 million. EPS was $0.38, above estimates of $0.29.

The company guided its fiscal Q4 EPS in the range of $0.15 to $0.31. Revenue was guided in the range of $265 million to $295 million.

On Friday, the stock opened higher but quickly fell and traded at $26.44 by the afternoon, down 0.26 percent.

Analysts commented on the stock and were largely tepid following the results. Below are highlights along with current ratings and price targets.

Oppenheimer - Perform, no price target

"OVTI's outlook is filled with uncertainty. The quarter saw a slowdown in mobile, primarily in China where sales were affected by the 3G-4G transition and inventory corrections, and management sees no signs of near-term improvement. ASPs fell more than 10 percent due to pricing pressure and lower mix of high-end products. Non-mobile markets remain a bright spot, with key design wins in both Auto and Entertainment markets. No updates were given in regard to Hua Capital Management's proposed acquisition at $29/share. With limited near-term visibility, we reiterate Perform."

Pacific Crest Securities - Sector Perform, no price target

"Diversification and cost control are encouraging, but Chinese LTE transition and competition create near-term headwinds. OmniVision reported in line FQ3 (Jan.) revenue and guided FQ4 (April) revenue above expectations, mainly driven by continued strength in Korea and new product ramps in auto and security, which are offsetting impacts from inventory correction from the 3G-4G transition in China. The company also showed solid margin improvement through cost control despite declining ASPs. However, we believe the increased competition in China will continue to create near-term uncertainties and pressure gross margin."

Wedbush - Neutral, $27 price target

"While FQ4 guidance was better, expectations were quite low and our LT concerns remain unchanged that the highly competitive landscape in the very price sensitive and unpredictable Asian handset market will continue to be a considerable challenge that we believe will negatively impact OVTI's revenue and earnings power. However, with that said, we continue to expect the stock to be range bound until a decision is made by OVTI's Board of Directors to either accept, counter, or reject the buyout offer of $29 in cash per share that OVTI received in mid-August from Chinese private equity firm HCM."