Why Synaptics (SYNA) Is Gaining Today

NEW YORK (TheStreet) -- Synaptics (SYNA) rose 4.9% to $59.60 Friday following an upgrade from Feltl and its quarterly earnings report.

Analyst firm Feltl upgraded the touchscreen producer to "buy" from "hold," setting a price target of $68.

The upgrade comes a day after Synaptics announced its quarterly earnings. The company reported revenue of$205.8 million with earnings of 86 cents a share for the quarter that ended Dec. 31. That beats Thomson Reuters analyst revenue estimates of $201.7 million, but misses the earnings estimate of 89 cents a share.

For the current quarter Synaptics expects revenue between $180 million and $200 million, and earnings between 44 cents and 64 cents a share. Analysts estimate revenue of $182.5 million, and earnings of 64 cents a share.

TheStreet Ratings team rates SYNAPTICS INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate SYNAPTICS INC (SYNA) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, solid stock price performance and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • SYNA's very impressive revenue growth greatly exceeded the industry average of 0.4%. Since the same quarter one year prior, revenues leaped by 75.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • SYNA's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.41, which clearly demonstrates the ability to cover short-term cash needs.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, SYNAPTICS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Powered by its strong earnings growth of 455.55% and other important driving factors, this stock has surged by 75.53% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, SYNA should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • SYNAPTICS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, SYNAPTICS INC increased its bottom line by earning $2.87 versus $1.59 in the prior year. This year, the market expects an improvement in earnings ($3.73 versus $2.87).

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