Himax: Recovery Mode

After bottoming at well-below the $2.00 market last summer, Himax Technologies (NASDAQ:HIMX) is out with a vengeance. The stock won back investors when it pre-announced a small profit. The company appears to have finally entered the recovery phase.

Himax posted preliminary revenue of $174.9 million, above the $162.8 million consensus estimates. Non-IFRS earnings are $0.60 - $0.90 a share. The stock is up because management is beating on revenue earnings, and margin expectations.

Plenty More to Prove

Himax management still has more to prove to permanently win back its investors. The company’s 3D sensing in smartphones failed and it has no real revenue from LCoS. Until Microsoft (NASDAQ:MSFT) sells the Hololens 3D wearable and Google Glass takes off in industrial, HIMX stock could fall again.

For the full-year, Himax will probably still lose a few cents in EPS. Investors still get no dividend, which was cut last year, and its new initiatives failed. For this quarter and the full year 2020, Himax must report revenue growth from new business sources. If it fails to do so, the rally will prove short-lived and long-time investors will sell the stock to minimize further losses.