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Roth Reiterates Buy On InvenSense: 'Fundamentals May Improve During 2H'16'

Roth Reiterates Buy On InvenSense: 'Fundamentals May Improve During 2H'16'

Roth Capital’s Krishna Shankar mentioned recent industry data points suggest iPhone 7 shipments of 70–75 million in 2H16, with InvenSense Inc (NYSE: INVN) expected to continue to be a major supplier for Apple Inc. (NASDAQ: AAPL).

Shankar maintains a Buy rating on InvenSense, with a price target of $10.

Expectations For 2H16

“We believe that fundamentals may improve during 2H16 driven by iPhone7 ramp and growing non-mobile revenues with high margins in areas such as image stabilization modules, microphones, sensor System-On-Chip, wearables, Internet of Things, smart TV, drones and virtual reality applications,” the analyst stated.

Related Link: Concerns About iPhone Production Cuts Likely Already Priced Into Suppliers

Shankar believes the sequential revenue decline of 33 percent during 4Q16 and the guidance suggesting another 24 percent sequential decline in 1Q17 were driven by the slowing demand for the iPhone 6s, loss of market share at Samsung, a weak macro environment and inventory reductions.

Apple’s iPhone shipments declined 31 percent during the March quarter, with the company guiding to 17 percent revenue decline for the June quarter.

Long-Term Opportunity

Shankar believes “recent new software-rich platform introductions from INVN for mobile turn-by-turn navigation, fitness and wearable applications, industrial and automotive IOT applications, microphone design wins, and fingerprint touch sensor platforms are positive data points for longer term revenue diversification away from Apple and Samsung and higher margins.”

Other high margin growth opportunities for InvenSense include microphones, stabilization modules, Internet of Things, sensor System-on-Chip, wearables, smart TV, virtual reality apps and drones.

Latest Ratings for INVN

Dec 2016DowngradesOverweightSector Weight
Dec 2016DowngradesBuyHold
Dec 2016Initiates Coverage OnBuy

View More Analyst Ratings for INVN
View the Latest Analyst Ratings

Posted-In: Krishna ShankarAnalyst Color Long Ideas Price Target Reiteration Analyst Ratings Tech Trading Ideas


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