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Himax Technologies, Inc. (HIMX) Message Board

  • dalton880 dalton880 Sep 9, 2013 11:07 AM Flag

    What valuation does HIMX deserve ?

    I personally think the reason we aren't seeing better stock action, is that investors are only giving HIMX a 10-11 PE going forward. I personally think that's rediculous, as analysts are now upping the 2014 estimates to around $.80, which is almost 100% EPS growth over 2013 ! I mean, doesn't such strong grwoth, with no end in sight, demand a higher PE going forward ?

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    • i think PEG is the way to look at it.

      For normal fabless company, they normally has a mid teens kind of EPS growth range like Novatek, thus it is trading at ~10-15x implying PEG of ~0.75-1x which is normal.

      For Himax, which is a high growth company with core business growign at 25-30% (with Google Glass it is growing at 40-50%. Applying a 0.75-1x PEG it worth at least 20-30x PE to justify its growth profile, which is similar to Mediatek. Also you may look at what Spreadtrum or Qualcom is trading (they are typical fabless companies) which will be ~20x at least.

      assuming a conservative US$0.6 non gaap EPS in 2014, a 20-30x would mean a $12-18 dollar range (by end 2014) valuation.

      thanks.

 
HIMX
7.20-0.02(-0.28%)Feb 27 4:00 PMEST

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