NEW YORK (TheStreet) -- Shares of Himax Technologies (HIMX) are falling by 4.82% to $6.22 in early afternoon trading on Friday, after analysts at Chardan Capital Markets downgraded the company to "sell" from "neutral" and reduced their price target to $4 from $5, theflyonthewall.com reports.
The firm cited Samsung's woes in China.
"Samsung's share of the Chinese market has contracted rapidly in the past year," analysts said. "The company's China's sales are expected to worsen in the back half of this year."
Samsung's smartphone shipments have plunged from 20.5 million in the first quarter of 2014 to 9.6 million in the first quarter of this year, they added.
Himax Technologies is a semiconductor company that provides display imaging processing technologies to consumer electronics worldwide.
Separately, TheStreet Ratings team rates HIMAX TECHNOLOGIES INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate HIMAX TECHNOLOGIES INC (HIMX) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. We feel its strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- HIMX's debt-to-equity ratio is very low at 0.27 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, HIMX has a quick ratio of 1.53, which demonstrates the ability of the company to cover short-term liquidity needs.
- HIMX, with its decline in revenue, slightly underperformed the industry average of 0.5%. Since the same quarter one year prior, revenues slightly dropped by 8.0%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- HIMAX TECHNOLOGIES INC's earnings per share declined by 22.2% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, HIMAX TECHNOLOGIES INC increased its bottom line by earning $0.39 versus $0.35 in the prior year. For the next year, the market is expecting a contraction of 18.7% in earnings ($0.32 versus $0.39).
- Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, HIMX has underperformed the S&P 500 Index, declining 15.17% from its price level of one year ago. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
- You can view the full analysis from the report here: HIMX Ratings Report