Pacific Crest analyst Li-Wen Zhang this morning launched coverage of touch-pad manufacturer Synaptics (SYNA) with a Sector Perform rating
Zhang cautions that price erosion limits the company’s ability to expand its gross margin. “We believe that Synaptics has to accept lower margin to preserve revenue growth,” the analyst contends, due to increasingly price conscious customers, short product cycles, new rivals including Cypress (CY) and Atmel (ATML), an expansion of touch screens to low-end devices and a mix shift to lower price chips from modules.
SYNA is up 19 cents, or 0.7%, to $27.73.
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