Why Shares of Synaptics Surged Today

What happened

Shares of Synaptics (NASDAQ: SYNA) jumped on Friday despite a mixed third-quarter report and lackluster fourth-quarter guidance. With the stock down substantially over the past few years, a bottom-line beat may have been enough to offset the bad news. The stock was up about 10.9% at 3:30 p.m. EDT.

So what

Synaptics reported third-quarter revenue of $334 million, down 15.2% year over year and about $11 million below the average analyst estimate. Mobile revenue was down 16%, to $204.7 million; IoT revenue was down 29%, to $63.1 million; and PC revenue was up 10%, to $66.2 million. Non-GAAP earnings per share came in at $0.83, down from $0.92 in the prior-year period but $0.12 higher than analysts were expecting.

A rising stock chart.

Image source: Getty Images.

"While Synaptics continues to be impacted by the residual effects of unfavorable supply chain dynamics in the near term, we are confident in the strengths and untapped potential of our product portfolio and are evaluating how best to leverage these assets with a focus on aligning the business toward achieving better long-term profitability," said Saleel Awsare, SVP and General Manager of the IoT division.

Synaptics expects its IoT platform to return to growth in the fiscal fourth quarter after struggling to grow the business in recent quarters.

Now what

Synaptics expects to produce fourth-quarter revenue between $300 million and $320 million, down 20.2% year over year at the midpoint. Analysts were expecting revenue guidance of $362.5 million.

While there was little to like about Synaptics' report other than a smaller-than-expected earnings decline, the stock was down nearly 70% from its multi-year high reached in 2015, prior to the report. With the stock so beaten down, a small piece of good news was apparently enough to drive shares higher.

10 stocks we like better than Synaptics
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Synaptics wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of March 1, 2019

Timothy Green has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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

In This Story


Latest Markets Videos

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More