(UNXL) designs and develops functional electronic conductive films
and durable wear resistance films used in sensors and display
applications for consumer and industrial products. The $200 million
company had virtually no revenues in 2012 and is projected to have
only $21 million this year.
Uni-Pixel's patented technology, the Time Multiplexed Optical
Shutter (TMOS), can be used in mobile phones, digital cameras,
notebook computers, televisions, as well as display and interactive
technologies in the energy, transportation and entertainment
The future of touch, sensor, and gesture technologies looks bright,
with Oppenheimer projecting the consumer gesture control market to
be the fastest growing segment as it expands fivefold from $850
million in 2013 to over $4 billion by 2017. That's a compound
annual growth rate of 50%!
But the recent backslide in sales at UNXL has forced analysts to
cut 2013 earnings estimates in the past two months from an expected
gain of $0.46 to a loss of 5 cents. And just last week, that profit
outlook got cut in half again with the consensus now at a loss of
10 cents for the year.
What Future Do the Analysts See?
To be fair, next year's estimates look spectacular by comparison
with the consensus only being lowered to EPS of $3.13 from $3.38,
which from minus 10-cents would be a stunning 3,000% leap in
earnings. But with only 4 analysts providing estimates for next
year, maybe they are still doing their homework.
Williams Financial Group published a research report after they
hosted Uni-Pixel CEO Reed Killion on a conference call October 2.
They project a sharp upturn in revenues next year with their
current estimate at 123.5 million. Here's what the analysts, who
have a $45 price target on UNXL shares, had to say...
"In our opinion, the call provided further encouragement that
UniPixel is making progress toward generating production revenue
during the fourth quarter. While, the company was unable to meet
its self-imposed October 1st target for qualification, waiver, or
purchase order we do believe significant headway has been made that
should yet result in the near-term granting of the qualification
waiver, a purchase order, and some level of Q4 volume revenue."
They also described the current uncertainty about new orders this
"Reed did name
(INTC) as its ecosystem partner, which has been widely speculated
following UNXL's inclusion in several Intel touch-related events.
When discussing the likely near term PC-partner waiver and purchase
order, he followed with anticipation of 'another purchase order
from our ecosystem partner in the near-future.' It isn't yet clear
as to whether this order would come from Intel, or via an Intel
relationship, but regardless UNXL believes additional orders are
likely in short order."
The Woodlands, Texas-based company has two key products, UniBoss
and Diamond Guard. I went on the company website to learn more and
found these descriptions...
UniBoss is a roll-to-roll or continuous flow printed electronics
manufacturing process that offers high fidelity replication of
surface micro structures, advanced micro-optic structures, and
conductive elements on thin film. The UniBoss™ technology is
currently focused on bringing world-class cost and functional
performance to projected capacitive touch sensor used in
smartphones, tablets, laptops, computers and industrial and
commercial control interfaces.
Diamond Guard is an optically clear specialty hard coat resin that
provides near glass like performance when coated on polymer films
such as polyethylene terephthalate, polycarbonate, and poly methyl
methacrylate, and display polarizer films. Typical Diamond Guard
applications include resistive touch sensors, cover glass
replacement for consumer products, membrane and capacitive
switches, and automotive and appliance decorative films.
I also found some videos demonstrating these technologies as
UniBoss is apparently used in the
(MSFT) Surface tablet. The video was not very impressive for a
public technology company. I consider myself a caveman of
technology and I was embarrassed for them. Go there and see for
Wait for the Estimates to Turn
As always with Zacks #5 Rank stocks, there's a reason that about
220 names occupy the basement of earnings momentum in a sea of
4400. This bottom 5% of stocks has disappointed analyst
sufficiently to warrant downward revisions to estimates.
This is also evident in the number of EPS misses, which average
about 28% for the last four quarters. In what appears to be a
remarkable touch technology, there must be either a sales or a
strategy execution problem, or both. The key now with UNXL if you
are looking for a turnaround before buying or selling the shares is
to watch the earnings reports and the estimates that follow.
Oppenheimer believes current mainstream interfaces such as keyboard
and mouse will maintain their near-term dominance and that touch
interface will see the largest market share growth and revenue
opportunities. But you have to pick the right companies in this
I recently went with one of the winners,
(SYNA), for a 20% gain in my Follow The Money portfolio. SYNA is a
clear leader in the evolution of touch technology owing to its
robust product road map and big customers like Samsung. Oppenheimer
(INVN) also stand to benefit from adoption of gesture control, but
the current market may be too fragmented to produce substantial
Uni-Pixel could be an important player some day, but we need to see
the hard numbers first. If sustainable sales start rolling in,
there will be plenty of time to become an investor here. Next
year's estimates, if they pan out will make the company an
eye-opening opportunity. But that's an "if" we need to wait for.
Kevin Cook is a Senior Stock Strategist for Zacks where he runs
Follow The Money
INVENSENSE INC (INVN): Free Stock Analysis
MICROSOFT CORP (MSFT): Free Stock Analysis
OMNIVISION TECH (OVTI): Free Stock Analysis
SYNAPTICS INC (SYNA): Free Stock Analysis
UNI-PIXEL INC (UNXL): Free Stock Analysis
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