Synaptics SYNA shares rallied 9.1% in the last trading session to close at $87.87. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 5.5% gain over the past four weeks.
The optimism surrounding the stock is largely driven by Synaptics' strategic revenue diversification efforts, which aim to reduce its dependence on the inherently cyclical smartphone market. Increased traction in its IoT products and Astra AI processors are a tailwind. Synaptics' expansion into the $3 billion connectivity market, with its first chip set for sampling, presents a significant growth opportunity. SYNA is focusing on high-growth markets such as AI-powered edge computing, automotive touch interfaces, and IoT connectivity, positioning itself for long-term expansion. Additionally, margin expansion through operational efficiency and a fabless manufacturing model enhances profitability.
This maker of touch-screen technology is expected to post quarterly earnings of $0.86 per share in its upcoming report, which represents a year-over-year change of +50.9%. Revenues are expected to be $264.62 million, up 11.7% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For Synaptics, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on SYNA going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Synaptics belongs to the Zacks Electronics - Semiconductors industry. Another stock from the same industry, Pixelworks PXLW, closed the last trading session 4.7% higher at $0.89. Over the past month, PXLW has returned 16.5%.
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