Cypress’s stock price movement
Cypress Semiconductor (CY) stock gained more than 12% on Wednesday after rumors surfaced that the company is reportedly exploring options to sell itself. However, the stock has increased only 0.4% in the month as of May 29.
In comparison, the stock prices of Cypress’s peers in the semiconductor industry including Micron Technologies, NVIDIA, and Qualcomm have declined ~20.9%, ~22.5%, and ~23.7%, respectively, in the month-to-date period, probably due to trade war concerns. Advanced Micro Devices, however, gained ~1.7% in the same period.
Cypress’s Q1 results
Cypress impressed its investors with upbeat Q1 2019 results on April 25. The chipmaker surpassed Wall Street estimates on both earnings and revenues despite experiencing softened demand in the second half of 2018.
However, earnings of $0.27 per share were flat YoY due to a revenue decline of 7.4% YoY to $539 million. During the quarter, the company experienced softness in all end markets served, namely automotive, legacy, and IoT. The rumored sale of the company might help Cypress to overcome the weakness.
Meanwhile, the company expects to focus more on industrial, automotive and IoT end markets with its joint venture with SK Hynix, which closed on April 1.
For the second quarter, Cypress expects revenues in the range of $515 million to $545 million, and non-GAAP earnings are anticipated in the range of $0.22 to $0.26 per share. Analysts expect revenues of $530.8 million and adjusted earnings of $0.24 per share for the second quarter.
Out of the 16 analysts covering Cypress, nine analysts have recommended the stock as a “buy” rating, while seven rated the stock a “hold.” None of the analysts have given the stock a “sell.” Analysts have set a target price of $18.15 for the stock, which implies a premium of 5.2% based on its closing price of $17.25 on May 29.