Craig-Hallum Upgrades Synaptics After Dialog Semi Deal Collapses: 'Give This Cheap Stock Another Look'

After news of the Dialog Semi deal termination, Craig-Hallum revisited its thesis for human interface developer Synaptics Inc. SYNA.

The Analyst

Analyst Anthony J. Stoss upgraded Synaptics from Hold to Buy and maintained a $51 price target. 

The Thesis

Craig-Hallum never believed the Dialog Semi deal would occur, Stoss said in the upgrade note. (See the analyst's track record here.) 

In addition to announcing the call-off, Synaptics said it expects higher earnings per share than its original guidance suggested. 

“SYNA can now focus on its business, and we urge investors to buy the weakness today, as SYNA has plenty to like over the next six-to-12 months as new products like CoF, in-display fingerprint and OLED DDIC begin ramping in volumes,” the analyst said. “Notably, we expect SYNA to see a big ramp in CoF at various customers including Apple.com, Inc. AAPL for the LCD models of their upcoming iPhone generation.”

Synaptics is also a preferred partner for platforms like Amazon.com Inc. AMZN's Alexa, Alphabet Inc GOOGL GOOG's Assistant and Microsoft Corporation MSFT's Cortana. These-third party devices will likely benefit Synaptics while driving high volumes and revenue growth.

"With SYNA back to trading in a range that provides upside on a fundamental basis, we believe investors would be well-served to give this cheap stock another look," Stoss said. Synaptics reports earnings Aug. 9. 

Price Action

Synaptics shares were falling 5.39 percent to $47.41 at the time of publication Wednesday. 

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