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Synaptics (SYNA) to Post Q3 Earnings: What's in the Cards?
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Synaptics (SYNA - Free Report) is slated to release third-quarter fiscal 2020 results on May 7.
For the fiscal third quarter, the company expects revenues between $330 million and $350 million. The Zacks Consensus Estimate for revenues is pegged at $337 million, indicating an increase of 0.91% from the year-ago quarter’s reported figure.
The Zacks Consensus Estimate for earnings stands at $1.42 per share, suggesting a jump of 71.08% from the year-earlier quarter’s reported number.
The company’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average positive surprise being 36.11%.
Synaptics’s third-quarter fiscal 2020 results are likely to have benefited from a healthy backlog of $284 million, as noted by management in its last earnings call.
Moreover, strong bookings, a growing customer base and healthy product sell-in and sell-through patterns are expected to have been key positives.
Further, Synaptics’ focus on controlling operating expenses with more disciplined spending and selective project investments is expected to have boosted profitability. The company’s cost-saving initiatives are expected to have led to a non-GAAP gross margin of 42-44%, as projected by the company, marking the third consecutive quarter with a gross margin above 40%.
The company’s market-leading position for both touchpads and secure fingerprint sensors in the PC market makes us optimistic about the impending quarterly release. New design momentum with its OLED touch sensors is also likely to have benefited the top line.
Additionally, with respect to the IoT business, the company’s solid prospects in the edge SoC are anticipated to have been a tailwind.
However, macroeconomic perils, given the coronavirus pandemic, persisted as a key concern this earnings season. Moreover, Synaptics is a display component supplier of Apple (AAPL - Free Report) , which witnessed a decline in iPhone sales in the March quarter. This is likely to have affected Synaptics as well.
What Our Model Says
The proven Zacks model predicts an earnings beat for Synaptics this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Synaptics has an Earnings ESP of +1.41% and a Zacks Rank #3.
Other Stocks to Consider
Here are a few other stocks you may consider, as our model shows that these too have the right combination of elements to beat on earnings this season:
Dynatrace, Inc. (DT - Free Report) has an Earnings ESP of +2.13% and a Zacks Rank #3.
Arista Networks, Inc. (ANET - Free Report) has an Earnings ESP of +0.18% and a Zacks Rank of 3.
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Synaptics (SYNA) to Post Q3 Earnings: What's in the Cards?
Synaptics (SYNA - Free Report) is slated to release third-quarter fiscal 2020 results on May 7.
For the fiscal third quarter, the company expects revenues between $330 million and $350 million. The Zacks Consensus Estimate for revenues is pegged at $337 million, indicating an increase of 0.91% from the year-ago quarter’s reported figure.
The Zacks Consensus Estimate for earnings stands at $1.42 per share, suggesting a jump of 71.08% from the year-earlier quarter’s reported number.
The company’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average positive surprise being 36.11%.
Synaptics Incorporated Price and EPS Surprise
Synaptics Incorporated price-eps-surprise | Synaptics Incorporated Quote
Factors at Play
Synaptics’s third-quarter fiscal 2020 results are likely to have benefited from a healthy backlog of $284 million, as noted by management in its last earnings call.
Moreover, strong bookings, a growing customer base and healthy product sell-in and sell-through patterns are expected to have been key positives.
Further, Synaptics’ focus on controlling operating expenses with more disciplined spending and selective project investments is expected to have boosted profitability. The company’s cost-saving initiatives are expected to have led to a non-GAAP gross margin of 42-44%, as projected by the company, marking the third consecutive quarter with a gross margin above 40%.
The company’s market-leading position for both touchpads and secure fingerprint sensors in the PC market makes us optimistic about the impending quarterly release. New design momentum with its OLED touch sensors is also likely to have benefited the top line.
Additionally, with respect to the IoT business, the company’s solid prospects in the edge SoC are anticipated to have been a tailwind.
However, macroeconomic perils, given the coronavirus pandemic, persisted as a key concern this earnings season. Moreover, Synaptics is a display component supplier of Apple (AAPL - Free Report) , which witnessed a decline in iPhone sales in the March quarter. This is likely to have affected Synaptics as well.
What Our Model Says
The proven Zacks model predicts an earnings beat for Synaptics this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Synaptics has an Earnings ESP of +1.41% and a Zacks Rank #3.
Other Stocks to Consider
Here are a few other stocks you may consider, as our model shows that these too have the right combination of elements to beat on earnings this season:
Dynatrace, Inc. (DT - Free Report) has an Earnings ESP of +2.13% and a Zacks Rank #3.
Arista Networks, Inc. (ANET - Free Report) has an Earnings ESP of +0.18% and a Zacks Rank of 3.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>