Synaptics, Inc. (NASDAQ: SYNA)
Technology; Touch Interface Solutions; HOLD
Synaptics is exposed to the growth of TDDI and fingerprint sensors. Hence, the stock is trading at an all-time high. Valuation indicates that the stock is fairly priced. PE valuations range from $92-$103. EVA and cash flow approaches point out overvaluation and accounting for value reveals minimum upside. Present investors can hold onto the stock but there's not much value for prospective investors as of now.
Synaptics is a technology company that's invested in touch screen controller ICs, display driver ICs, TDDIs and fingerprint sensors. The company generates more than 80% of its revenue from its mobile products segment, which has double-digit growth potential. We initiated coverage on Synaptics last year with a buy rating and a $97 price target. Our verdict was
"There is almost zero downside in the long run. The stock can be volatile in short-term; but in a time frame of 2-3 years, Synaptics will grow 20% to 30% by conservative estimates."
Anyhow, fast forward to present, Synaptics is trading around $100. Analysts are upgrading their price targets and the trend is positive. But, despite Synaptics growth prospects and a leading position in the industry, is the company a buy at the current valuation? Let's explore from a valuation vantage point.
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