Metal-Mesh Sensors Are The Key To Uni-Pixel's Growth

Uni-Pixel Inc UNXL reported its June quarter results with the revenue in line with the estimate. Ladenburg Thalmann’s Jon R. Hickman maintained a Buy rating on the company, with a price target of $5.50.

June Quarter Results

Hickman mentioned that the revenues were driven by Uni-Pixel’s legacy business, since a majority of the new program wins are likely to ramp only in the latter half of 2016.

Although gross margins continued to be negative, there was significant improvement, given that the company has now transitioned to manufacturing its own base coat film.

Operating margins for the June quarter were in line with the estimate, while the adjusted EBITDA loss was higher than estimated.

“We anticipate that as revenues ramp the losses will decline as operating cost should remain relatively constant,” Hickman stated.

Metal-Mesh Sensors

The analyst pointed out that the key growth driver for the company has been metal-mesh sensors, with management noting that “an increasing number of RFQs that the company is receiving now require a metal-mesh touch sensor.”

In fact, management believes the paradigm shift in RFQ requirements proves that metal-mesh is rapidly gaining share as an ITO replacement technology.

“This increasing popularity of metal-mesh is driving both UNXL's potential customer pipeline and our confidence in the company's future revenue potential,” the analyst added.

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