Synaptics Introduces Solutions for Head-Mounted Displays

Synaptics IncorporatedSYNA recently announced that it is sampling its ClearView R63455 display driver IC (DDIC), comprising the industry's first "dual-display 2K resolution combined with unique foveal transport support for next generation virtual reality head-mounted displays (HMDs)."

Additionally, the company's VXR7200 VR Bridge solution equips devices with "high-speed DisplayPort connectivity supporting full VESA DP1.4 bandwidth over tethered USB Type-C cables required for a best-in-class HMD user experience."

Synaptics expects to better cater to the augmented reality (AR) and virtual reality (VR) requirements of gaming, movies as well as medical industries.

HMD Market Growth Statistics

Per recent data from MarketsandMarkets, the HMD market is expected to reach $25.01 billion by 2022 from $3.25 billion in 2016. This massive growth projection bodes well for all the organizations associated with the industry.

In such a scenario Synaptics' enhancement of the solutions portfolio is expected to boost the demand for its products, eventually positively impacting financials and share price momentum of the company.

Shares of Synaptics have gained 15% year to date against the industry 's decline of 2%.

Synaptics' Recent Financials

Synaptics reported fourth-quarter fiscal 2018 non-GAAP earnings of $1 per share that beat the Zacks Consensus Estimate of 92 cents. The figure also came in line with the upper end of the guided range of 80 cents to $1 per share. However, the figure declined 15.3% from the year-ago quarter.

Revenues declined approximately 8.9% from the year-ago quarter to $388.5 million and were within the guidance range of $370-$410 million. The figure lagged the Zacks Consensus Estimate of $395 million.

Weakness in the smartphone market hurt mobile products' revenues, which contributes the majority of the revenues. The company expects the weakness to continue in the second half of the calendar year as well.

Nevertheless, management is looking forward to restructuring the optical finger print business of the mobile segment. Additionally, the company's solid partnerships with the likes of Microsoft MSFT and Advanced Micro Devices AMD bode well.

Moreover, Synaptics' Consumer IoT products are being positively impacted by a surge in the demand for smart homes, smart devices, Automotive, VR, as well as voice and video-enabled products. This is expected to benefit the company going ahead.

Zacks Rank & Stock to Consider

Synaptics currently carries a Zacks Rank #3 (Hold).

A better-ranked stock in the same industry is Cirrus Logic, Inc. CRUS , carrying a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

The projected long-term earnings growth rate for Cirrus Logic is 15%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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