The analyst firm lowered its price target for the company to $23 from $30. Major smartphone manufacturers could be switching to a dual-source strategy for gyroscopes and other components, according to Baird analysts.
Baird analysts noted that smartphone manufacturers could start sourcing more components from competitor STMicroelectronics (STM) .
The downgrade comes days after a teardown of the new iPhone 6 and iPhone 6 Plus showed that both new smartphones use a 6-axis InvenSense gyroscope and accelerometer. Previous iPhone models used motion sensors from STMicroelectronics.
TheStreet Ratings team rates INVENSENSE INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate INVENSENSE INC (INVN) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share."