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Synaptics Inc (SYNA)
NASDAQ:SYNA
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Synaptics
(NASDAQ:SYNA)
54Neutral
Positive Factors
Financial Performance
Synaptics reported better results and guidance, with March expected to include revenue from the Broadcom deal.
Strategic Partnerships
The recent Broadcom deal is expected to drive growth in the IoT market, adding optionality to both Core IoT and Mobile sectors.
Negative Factors
Automotive Market Conditions
Automotive continues to be impacted by weaker end-market conditions as Synaptics remains more exposed to NA/EU customers.
Synaptics (SYNA) vs. S&P 500 (SPY)
Market Cap
$2.47B
Dividend YieldN/A
Average Volume (3M)810.69K
Price to Earnings (P/E)14.9
Beta (1Y)1.96
Revenue Growth-1.85%
EPS GrowthN/A
CountryUS
Employees1,716
SectorTechnology
Sector Strength45
IndustrySemiconductors and Equipment
Share Statistics
EPS (TTM)4.22
Shares Outstanding39,186,592
10 Day Avg. Volume592,667
30 Day Avg. Volume810,688
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.45
Price to Cash Flow (P/CF)27.10
P/FCF Ratio17.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$96.67Price Target Upside54.72% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering8
Synaptics Business Overview & Revenue Model
Company DescriptionSynaptics Incorporated (SYNA) is a leading developer of human interface solutions, primarily serving the consumer electronics, PC, and Internet of Things (IoT) markets. The company specializes in designing and manufacturing touchpads, touchscreens, fingerprint sensors, and other biometric technologies. Synaptics' innovative solutions are integrated into a wide range of devices, including smartphones, tablets, laptops, automotive applications, and smart home products, enabling intuitive user experiences and enhancing device functionality.
How the Company Makes MoneySynaptics makes money by designing and selling its advanced human interface solutions to original equipment manufacturers (OEMs) and other technology partners. The company's revenue streams include licensing its proprietary technologies, selling custom silicon products, and providing engineering services. Synaptics' significant partnerships with major consumer electronics brands allow it to integrate its solutions into a vast array of devices, thus expanding its market reach. Additionally, the increasing demand for touch and display driver integration (TDDI) and IoT applications contributes to its revenue growth, as these sectors continue to evolve and require more sophisticated and seamless user interface technologies.
Synaptics Financial Statement Overview
Summary
Synaptics exhibits a mixed financial performance with strong equity standings and profitability metrics, but faces challenges in revenue growth and operational efficiency. The company's ability to generate cash flow is currently under pressure, highlighting the need for strategic adjustments to enhance financial resilience.Income Statement
Over the TTM period, Synaptics experienced a decrease in revenue growth, with a decline from the previous year, indicating challenges in maintaining sales momentum. The gross profit margin is strong at 45.46%, but the company faces negative EBIT margin due to high operational costs, impacting overall profitability. However, net profit margin remains positive at 16.73%, reflecting some efficiency in managing non-operational expenses.53
Neutral
Balance Sheet
Synaptics maintains a healthy equity ratio of 54.46%, demonstrating strong financial stability and low leverage. The debt-to-equity ratio is manageable at 0.61, indicating moderate reliance on debt financing. Return on equity is robust at 12.28%, reflecting effective utilization of equity to generate profits.65
Positive
Cash Flow
The cash flow analysis highlights a concerning free cash flow growth rate, which turned negative in the TTM period. Operating cash flow to net income ratio is low at 0.07, suggesting potential liquidity issues. Despite these challenges, the company has a significant cash reserve to sustain short-term operations.42
Neutral
| Breakdown | |||||
| TTM | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.01B | 959.40M | 1.36B | 1.74B | 1.34B | 1.33B | Gross Profit |
| 458.90M | 422.50M | 715.90M | 943.10M | 611.20M | 543.10M | EBIT |
| -56.90M | -75.80M | 154.30M | 350.40M | 27.10M | -20.10M | EBITDA |
| 36.20M | 49.90M | 349.00M | 498.20M | 281.30M | 260.00M | Net Income Common Stockholders |
| 168.90M | 125.60M | 73.60M | 257.50M | 79.60M | 118.80M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 596.10M | 876.90M | 934.30M | 876.00M | 836.30M | 763.40M | Total Assets |
| 2.53B | 2.83B | 2.61B | 2.86B | 2.23B | 1.69B | Total Debt |
| 832.50M | 1.02B | 978.00M | 981.70M | 881.50M | 586.60M | Net Debt |
| 236.40M | 145.40M | 53.30M | 157.70M | 45.20M | -176.80M | Total Liabilities |
| 1.15B | 1.36B | 1.37B | 1.59B | 1.26B | 874.70M | Stockholders Equity |
| 1.38B | 1.47B | 1.24B | 1.27B | 967.20M | 819.10M |
| Cash Flow | Free Cash Flow | ||||
| -20.90M | -31.70M | 296.40M | 405.30M | 293.10M | 205.50M | Operating Cash Flow |
| 12.10M | 135.90M | 331.50M | 436.40M | 319.20M | 221.80M | Investing Cash Flow |
| -51.90M | -157.70M | -6.00M | -456.40M | -522.60M | 119.90M | Financing Cash Flow |
| -277.10M | -25.10M | -221.30M | 14.30M | 274.10M | 93.90M |
Synaptics Technical Analysis
Negative
62.48
Price Trends
74.85
Negative
75.40
Negative
78.88
Negative
Market Momentum
-3.45
Positive
36.05
Neutral
29.89
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SYNA, the sentiment is Negative. The current price of 62.48 is below the 20-day moving average (MA) of 67.94, below the 50-day MA of 74.85, and below the 200-day MA of 78.88, indicating a bearish trend. The MACD of -3.45 indicates Positive momentum. The RSI at 36.05 is Neutral, neither overbought nor oversold. The STOCH value of 29.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SYNA.
Synaptics Risk Analysis
Synaptics disclosed 45 risk factors in its most recent earnings report. Synaptics reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Synaptics Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $893.79B | 88.87 | 14.85% | 1.14% | 40.30% | -22.79% | |
67 Neutral | $52.20B | 20.93 | 28.16% | 1.97% | -4.99% | -9.18% | |
67 Neutral | $18.06B | 11.80 | 18.97% | ― | -14.19% | -27.42% | |
63 Neutral | $10.97B | 22.08 | 8.34% | 4.07% | -12.91% | -42.12% | |
58 Neutral | $21.35B | 9.96 | -19.72% | 2.38% | 5.03% | -22.83% | |
55 Neutral | $6.64B | 251.18 | 0.77% | ― | 9.51% | ― | |
54 Neutral | $2.47B | 14.93 | 13.01% | ― | -1.85% | ― |
* Technology Sector Average
Performance Comparison
SYNA
Synaptics
62.48
-36.95
-37.16%
AVGO
Broadcom
194.23
69.68
55.95%
NXPI
NXP Semiconductors
204.45
-35.21
-14.69%
ON
ON Semiconductor
42.85
-34.32
-44.47%
SWKS
Skyworks Solutions
67.85
-33.95
-33.35%
QRVO
Qorvo
69.32
-44.26
-38.97%
Synaptics Earnings Call Summary
Earnings Call Date: Feb 6, 2025 | % Change Since: -16.49% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mix of positive developments such as revenue growth, strategic partnerships, and financial management, alongside challenges in leadership transition and specific market segments. Overall, the company demonstrates resilience and optimism for future growth.Highlights
Revenue Growth
Revenues increased 4% sequentially and 13% year over year to $267 million, led by strength in core IoT and enterprise products.
Core IoT Growth
Core IoT product sales increased 63% year over year to $61 million, driven by growth in both processor and wireless products.
Broadcom Agreement
Synaptics announced a $198 million agreement with Broadcom, expected to generate over $40 million in annualized sales and slightly accretive to non-GAAP EPS.
Non-GAAP EPS Increase
Non-GAAP EPS increased 61% year over year to $0.92, exceeding the midpoint of guidance.
Debt Retirement and Share Repurchase
Retired term loan B with convertible note and cash, reducing total debt and returning approximately $75 million to shareholders via share repurchases.
Lowlights
CEO Transition
Michael Hurlston stepped down as president and CEO, creating potential uncertainties during leadership transition.
Automotive Segment Sluggishness
The automotive segment remains sluggish, particularly with exposure to US and European customers, leading to potential headwinds.
Mobile Touch Revenue Decline
Mobile touch product revenue was down 7% sequentially and 25% year over year as product shipments to a large US customer have reached end of life.
Company Guidance
During the Synaptics Incorporated Second Quarter Fiscal Year 2025 Conference Call, management shared guidance reflecting a positive outlook across several business segments. Revenue for the quarter reached $267.2 million, marking a 13% year-over-year increase, driven by strong performance in core IoT and enterprise products. The company executed a $198 million all-cash transaction with Broadcom, expected to generate over $40 million in annualized sales and be accretive to non-GAAP EPS. The guidance for the third quarter anticipates revenues of approximately $265 million, with a non-GAAP gross margin of 53.5%. Additionally, Synaptics completed a refinancing, issuing $450 million in convertible notes and retiring a $582 million term loan, reducing debt and interest expenses. The company remains optimistic about growth prospects, projecting sequential revenue increases of approximately $10 million per quarter in a cautious economic environment, supported by lean inventories and strategic partnerships, such as the collaboration with Google in AI technology.Synaptics Corporate Events
Executive/Board ChangesFinancial Disclosures
Synaptics Announces CEO Change and Q2 Preliminary Results
Neutral
Feb 3, 2025
On February 3, 2025, Synaptics announced the resignation of CEO Michael Hurlston, effective immediately, as he transitions to lead Lumentum Holdings Inc. Ken Rizvi, the current CFO, has been appointed as interim CEO, while Nelson Chan assumes the role of interim Executive Chairman. The company has begun searching for a new CEO, considering both internal and external candidates. Synaptics also reported preliminary financial results for the second quarter of fiscal 2025, expecting revenue of $267 million. The company remains focused on executing its growth roadmap amidst these leadership changes, ensuring delivery of next-generation products and solutions.
Product-Related AnnouncementsBusiness Operations and Strategy
Synaptics Partners with Broadcom to Boost Edge AI
Positive
Jan 28, 2025
On January 28, 2025, Synaptics Incorporated announced a strategic licensing agreement with Broadcom, aimed at accelerating its Edge AI strategy by integrating Broadcom’s Wi-Fi 8, ultra-wideband, Wi-Fi 7, advanced Bluetooth, and next-generation GPS/GNSS technology into the IoT and Android ecosystems. This move is expected to solidify Synaptics’ leadership in AI IoT connectivity, expand its addressable market, enhance its product roadmap, and provide financial benefits by potentially adding over $40 million in annual sales. The agreement, including the acquisition of certain assets from Broadcom, will also temporarily restrict third-party manufacturing of newly licensed products, fostering Synaptics’ competitive edge in the wireless technology sector.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.