Synaptics Shares Collapse, Cowen Defends Company Amid Concerns About Biometric Licensing

Shares of Synaptics, Incorporated SYNA dropped about 25 percent since the company reported its results on October 27. On Tuesday, the stock fell about 8 percent on concerns about biometric licensing. However, Cowen believes the stock was oversold after news of Precise Biometrics licensed fingerprint recognition algorithm software to Samsung.

Analysts Robert Stone and James Medvedeff defended Synaptics pointing out that the company won against Samsung’s internal competition. They couldn't find any fingerprint solution from the Korean firm in the market until now. The analysts thinks the latest win of TDDI for Galaxy On5 and On7 demonstrated that Synaptics could win with a superior solution.

The brokerage pointed out that Precise Biometrics license could be used for a variety of models with smartphone fingerprint penetration, which reached about 50 percent, would witness a growth in the next year.

In a note, Cowen said, “It is expected that Samsung is working on an under-glass design for the GS8. The increased difficulty of reading a finger image through glass makes a tight combination of hardware and software more important. We believe SYNA is likely to supply both sensor and software for under-glass designs.”

The brokerage maintained its Outperform rating and target price of $75.

At last check, Synaptics fell 8.02 percent to $50.55.