Lake Street Capital Bullish On Pixelworks

Analysts at Lake Street Capital Markets initiated coverage on Pixelworks Inc. PXLW with a Buy rating and $8.50 price target Thursday.

Jaeson Schmidt feels Pixelworks is poised for significant growth as is benefits from
rising 4K TV penetration, and the recent introduction of a mobile video processor chip last June.

Analysts estimate $25 million to $30 million in mobile revenue in 2016 excluding any contribution from Apple Inc. Schmidt stated, “Apple is the wildcard in our view. We think of it as a significant call option because it has the potential to be very large, but currently has limited visibility.”

Upside may also be driven by Pixelworks' market share, currently the company controls 30 to 35 percent of the projector market. Schmidt predicts this number to increase to 50 percent market share by next year.

Mobile opportunity also presents significant growth potential. With its new processing chip, Pixelworks is able to target electronics with a 5.5” screen and above. Schmidt stated, “we think entry into this market could be transformational for the Company as it expands
its addressable market significantly.”

Shares of Pixelworks are trading at $6.58 down 1.9 percent.