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Is It Time To Give Up On InvenSense?

Is It Time To Give Up On InvenSense?

Shares of sensor maker InvenSense Inc (NYSE: INVN) have fallen more than 50 percent over the past year, as the company was hard hit by the decline in Apple Inc. (NASDAQ: AAPL)'s smartphone sales and CEO Steve Jobs' decision not to use InvenSense sensors in the firm's Apple Watch.

Now, with shares trading at just $7.27 some are wondering if there is a case to buy on the hopes of a bounce.

Apple Woes

InvenSense was dealt a blow last year when the company lost out on a contract to supply the motion sensors for Apple's smartwatch. The firm's decision not to go with InvenSense was an ominous sign for investors, as the company has been using InvenSense components in its iPhones, and many wondered what drove Apple's decision to abandon the supplier for its watches, especially when InvenSense sensors were being used in the majority of competitors' watches at the time.

Related Link: "Apple Monitor" Shows Stock Still Worth $200

Not only that, but Apple's fourth-quarter earnings report showed that iPhone sales were declining, a bad sign for InvenSense. Apple is InvenSense's largest customer, so a slowdown in smartphone sales directly impacts the firm's bottom line.

Looking To The Future

On its January earnings call, InvenSense was upbeat about its future prospects.

The company said its MEMS microphone technology and image stabilization technologies present some opportunities for growth. CFO Mark Dentinger reassured investors that margins for the company's mobile-oriented offerings are stabilizing and that the firm is shifting its focus toward non-mobile products, which could help boost profits in the coming year.

Is It A Buy?

At the moment, investors are still wary of InvenSense, as the company's headwinds appear to be outweighing potential opportunities. For the majority of investors, the company's future is a bit too uncertain to drive investment potential.

Image Credit: Public Domain

Posted-In: Apple Watch Mark Dentinger SensorsTop Stories Markets Tech Trading Ideas General Best of Benzinga


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