On Friday, Synaptics (NASDAQ:SYNA) Incorporated (NASDAQ:SYNA), a leading developer of human interface solutions, received a revised price target from Needham, a financial services firm. The price target for Synaptics shares has been lowered to $95.00 from the previous $110.00, while the Buy rating on the stock remains unchanged.
The adjustment follows Synaptics' recent financial report, which highlighted a strong performance but provided a mixed outlook for the future.
Synaptics reported earnings that surpassed expectations, but the company's guidance reflects continued subdued spending in enterprise IT.
Needham has reduced its forward estimates for Synaptics, noting that the company has not yet observed signs of an anticipated enterprise refresh cycle, even though inventory levels have nearly normalized.
Despite this, growth in enterprise is expected to be steady, with the bottoming out of the Video Interface (NASDAQ:TILE) market and potential boosts from an AI PC refresh cycle and connectivity opportunities in non-Qualcomm ARM PCs.
The core Internet of Things (IoT) segment is still predicted to be the primary driver of growth for Synaptics. The company has successfully taped out its first broad market Microcontroller Unit (MCU), with revenue expected in the first half of 2026.
Additionally, the Astra project is on schedule to generate revenue in the second half of 2026, and the development of the first Wi-Fi 7 device is progressing ahead of schedule, with samples to be distributed this quarter.
Synaptics reported a growth in its Q4 fiscal year 2024, with revenues reaching $247.4 million, a 9% increase year-over-year (YoY), and a 4% rise sequentially.
The non-GAAP net income for the quarter stood at $25.6 million, reflecting a 22% increase from the previous quarter and a 31% increase YoY. The company's first-quarter revenues for 2025 are anticipated to be around $255 million with a non-GAAP gross margin of 53.5%.
The company's core IoT products experienced substantial growth, particularly in wireless. Furthermore, Synaptics resolved most of their inventory issues from the past six quarters. Revenue contributions for Q4 from Core IoT, Enterprise & Automotive, and Mobile products were 22%, 58%, and 20%, respectively.
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