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The Zacks Analyst Blog Highlights: Microchip, Diodes, Vishay and MaxLinear
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For Immediate Release
Chicago, IL – May 8, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Microchip Technology Inc. (MCHP - Free Report) , Diodes Inc. (DIOD - Free Report) , Vishay Intertechnology, Inc. (VSH - Free Report) and MaxLinear, Inc. (MXL - Free Report) .
The Q1 earnings season will see releases from a number of semiconductor companies over the next few days. The industry serves as a driver, enabler and indicator of technological progress.
According to the latest Earnings Preview, technology is one of the six sectors predicted to report double-digit earnings growth this quarter. Per the report, total earnings for the tech sector are projected to be up 28.5% on 12.6% higher revenues.
We note that the technology sector has been a robust performer over the past year. The sector has been benefiting from increasing demand for cloud-based platforms, growing adoption of Artificial Intelligence (AI) solutions, Augmented/Virtual reality devices, autonomous cars, advanced driver assisted systems (ADAS) and Internet of Things (IoT) related software.
We believe the aforementioned trends have provided some much-needed opportunity to semiconductor companies to counter loss of business due to the declining PC market, which still consumes the bulk of the chips. Notably, according to the latest report of World Semiconductor Trade Statistics (“WSTS”), semiconductor revenues climbed 20.6% year over year to $408.7 billion in 2017.
The semiconductor industry is anticipated to continue to witness growth this year as well, although not as high as 2017 but still at a respectable rate. Per the WSTS report, semiconductor revenues are likely to touch $437.3 billion in 2018, representing growth of 7.7%.
The industry is poised to benefit from rising demand for new technologies, deployment of 5G broadband technology globally and President Trump’s pro-business policies, including tax cuts, deregulation and outlays on infrastructure.
However, this does not ensure earnings beat for all companies in the space. It should be noted that a company’s earnings outperformance is dependent on the overall business environment as well as management’s ability to implement operating and strategic plans.
In other words, a company may perform dismally despite a favorable business environment if it fails to capitalize on the opportunities due to lack of execution.
Let’s see what’s in store for the following semiconductor stocks, all of which are slated to release quarterly figures on May 8.
Microchip Technology Inc. is scheduled to report fourth-quarter 2018 results. The Zacks Consensus Estimate for earnings is pegged at $1.35 per share while the same for revenues stands at $984.5 Million. The estimates, when compared with the year-ago quarter figures, represent 16.4% and 9.1% increase in earnings and revenues, respectively. The stock carries a Zacks Rank #2 (Buy).
Microchip is benefiting from robust demand for 8-bit, 16-bit and 32-bit microcontrollers. We believe that the company’s expanding product portfolio driven by new launches will continue to improve customer base. Additionally, the company expanded collaboration with Amazon Web services to support AWS offerings as well as develop secure cloud system.
The company also continues to capitalize on enhancing its solution range and improving capacity constraints along with design wins. This enables Microchip to have a competitive edge in the semiconductor industry. (Read more: Microchip to Report Q4 Earnings: What's in the Cards?)
Next up is Diodes Inc., which is set to report first-quarter 2018 results. The stock has a Zacks Rank #3 (Hold). The Zacks Consensus Estimate for the quarter under review is pegged at 43 cents, representing remarkable year-over-year growth of 207.1%. Additionally, analysts polled by Zacks project revenues of roughly $269 million, up 13.8% from the year-ago quarter.
We believe that the BCD Semiconductor acquisition is benefiting Diodes by expanding its footprint in the broader analog market and extending its product offerings. Further, the company’s product launches and product refreshes are anticipated to boost revenues. However, stiff competition remains a concern.
Another semiconductor company, Vishay Intertechnology, Inc., is scheduled to report first-quarter 2018 results. The Zacks Consensus Estimate for the company’s revenues and earnings is pegged at $685 million and 37 cents per share, respectively, indicating growth of 12.9% for revenues and an increase of 32.1% for earnings on a year-over-year basis. The stock carries a Zacks Rank #3.
The company is a global manufacturer and supplier of discrete semiconductors as well as passive components. We believe that Vishay's product innovations, successful acquisition strategy, and one-stop shop service will act as a catalyst, going forward.
MaxLinear, Inc. is scheduled to report first-quarter 2018 results. The Zacks Consensus Estimate for the company’s revenues and earnings is pegged at $112.2 million and 35 cents per share, respectively, indicating growth of 26.2% for revenues and an increase of 6.1% for earnings on a year-over-year basis. The stock carries a Zacks Rank #3.
MaxLinear is a provider of radio-frequency analog and mixed signal semiconductor SoC solutions for broadband communication applications which offers small silicon die-size, and low power consumption. The company recorded an increase of 31% in last quarter revenues which indicates that its increased investment toward sales and marketing are paying off. We believe although elevated expenses are hurting its near-term profitability, these will have long-term benefits.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights: Microchip, Diodes, Vishay and MaxLinear
For Immediate Release
Chicago, IL – May 8, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Microchip Technology Inc. (MCHP - Free Report) , Diodes Inc. (DIOD - Free Report) , Vishay Intertechnology, Inc. (VSH - Free Report) and MaxLinear, Inc. (MXL - Free Report) .
Here are highlights from Monday’s Analyst Blog:
Semiconductor Stocks Reporting Earnings Tuesday, May 8: MCHP, DIOD, VSH, MXL
The Q1 earnings season will see releases from a number of semiconductor companies over the next few days. The industry serves as a driver, enabler and indicator of technological progress.
According to the latest Earnings Preview, technology is one of the six sectors predicted to report double-digit earnings growth this quarter. Per the report, total earnings for the tech sector are projected to be up 28.5% on 12.6% higher revenues.
We note that the technology sector has been a robust performer over the past year. The sector has been benefiting from increasing demand for cloud-based platforms, growing adoption of Artificial Intelligence (AI) solutions, Augmented/Virtual reality devices, autonomous cars, advanced driver assisted systems (ADAS) and Internet of Things (IoT) related software.
We believe the aforementioned trends have provided some much-needed opportunity to semiconductor companies to counter loss of business due to the declining PC market, which still consumes the bulk of the chips. Notably, according to the latest report of World Semiconductor Trade Statistics (“WSTS”), semiconductor revenues climbed 20.6% year over year to $408.7 billion in 2017.
The semiconductor industry is anticipated to continue to witness growth this year as well, although not as high as 2017 but still at a respectable rate. Per the WSTS report, semiconductor revenues are likely to touch $437.3 billion in 2018, representing growth of 7.7%.
The industry is poised to benefit from rising demand for new technologies, deployment of 5G broadband technology globally and President Trump’s pro-business policies, including tax cuts, deregulation and outlays on infrastructure.
However, this does not ensure earnings beat for all companies in the space. It should be noted that a company’s earnings outperformance is dependent on the overall business environment as well as management’s ability to implement operating and strategic plans.
In other words, a company may perform dismally despite a favorable business environment if it fails to capitalize on the opportunities due to lack of execution.
Let’s see what’s in store for the following semiconductor stocks, all of which are slated to release quarterly figures on May 8.
Microchip Technology Inc. is scheduled to report fourth-quarter 2018 results. The Zacks Consensus Estimate for earnings is pegged at $1.35 per share while the same for revenues stands at $984.5 Million. The estimates, when compared with the year-ago quarter figures, represent 16.4% and 9.1% increase in earnings and revenues, respectively. The stock carries a Zacks Rank #2 (Buy).
Further, the company has beaten the Zacks Consensus Estimate in the trailing four quarters with an average positive surprise of 5.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Microchip is benefiting from robust demand for 8-bit, 16-bit and 32-bit microcontrollers. We believe that the company’s expanding product portfolio driven by new launches will continue to improve customer base. Additionally, the company expanded collaboration with Amazon Web services to support AWS offerings as well as develop secure cloud system.
The company also continues to capitalize on enhancing its solution range and improving capacity constraints along with design wins. This enables Microchip to have a competitive edge in the semiconductor industry. (Read more: Microchip to Report Q4 Earnings: What's in the Cards?)
Next up is Diodes Inc., which is set to report first-quarter 2018 results. The stock has a Zacks Rank #3 (Hold). The Zacks Consensus Estimate for the quarter under review is pegged at 43 cents, representing remarkable year-over-year growth of 207.1%. Additionally, analysts polled by Zacks project revenues of roughly $269 million, up 13.8% from the year-ago quarter.
We believe that the BCD Semiconductor acquisition is benefiting Diodes by expanding its footprint in the broader analog market and extending its product offerings. Further, the company’s product launches and product refreshes are anticipated to boost revenues. However, stiff competition remains a concern.
Another semiconductor company, Vishay Intertechnology, Inc., is scheduled to report first-quarter 2018 results. The Zacks Consensus Estimate for the company’s revenues and earnings is pegged at $685 million and 37 cents per share, respectively, indicating growth of 12.9% for revenues and an increase of 32.1% for earnings on a year-over-year basis. The stock carries a Zacks Rank #3.
The company is a global manufacturer and supplier of discrete semiconductors as well as passive components. We believe that Vishay's product innovations, successful acquisition strategy, and one-stop shop service will act as a catalyst, going forward.
MaxLinear, Inc. is scheduled to report first-quarter 2018 results. The Zacks Consensus Estimate for the company’s revenues and earnings is pegged at $112.2 million and 35 cents per share, respectively, indicating growth of 26.2% for revenues and an increase of 6.1% for earnings on a year-over-year basis. The stock carries a Zacks Rank #3.
MaxLinear is a provider of radio-frequency analog and mixed signal semiconductor SoC solutions for broadband communication applications which offers small silicon die-size, and low power consumption. The company recorded an increase of 31% in last quarter revenues which indicates that its increased investment toward sales and marketing are paying off. We believe although elevated expenses are hurting its near-term profitability, these will have long-term benefits.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.