Cypress Semiconductor Hit a 52-Week Low: Is It Losing Its Touch?
Shares of Cypress Semiconductor (NAS: CY) hit a 52-week low this week. Let's look at how it got here and whether dark clouds are ahead.
How it got here
The chip maker has fallen on hard times over the past year. After flying high up until the summer of 2011, the company has seen its top line shrink on nearly all fronts. Fellow touchscreen microcontroller maker Atmel (NAS: ATML) has also seen better days, recently hitting a new 52-week low for itself.
Cypress' fourth-quarter earnings release in January disappointed investors, in part due to gloomy guidance amid underwhelming Google Android tablet sales and inventory adjustments at gadget makers. The company's first-quarter results were encouraging, sending shares higher, but unfortunately that glow didn't last long.
The important programmable systems division saw revenue drop 14% last quarter to $81.9 million. This is the segment that includes Cypress' touchscreen controller offerings as well as its programmable system-on-a-chip, or PSoC, products.
How it stacks up
Let's see how Cypress stacks up with some of its peers.
Let's add in some more fundamental metrics for deeper insight.
Company | P/E (TTM) | Sales growth (MRQ) | Net margin (TTM) | ROE (TTM) |
|---|---|---|---|---|
Cypress | 28.2 | (20.6%) | 10.5% | N/M |
Atmel | 13.4 | (22.5%) | 15.4% | 24.7% |
Synaptics (NAS: SYNA) | 16.8 | (7.5%) | 10.1% | 14.9% |
Texas Instruments (NAS: TXN) | 19.7 | (8.0%) | 13.6% | 16.7% |
Source: Reuters. TTM = trailing 12 months. MRQ = most recent quarter. NM = not meaningful.
It's apparent that the slowdown in business isn't specific to Cypress, as other players are seeing falling revenue.
Texas Instruments enjoys the touchscreen controller spot in Apple iDevices, while Cypress powers the touch interactions in iPod nanos and MacBooks. Atmel is a leader in the Android space, while Synaptics sits in seats such as Barnes & Noble's Nook, among others.
What's next?
Cypress may be down, but it's not out. Even though Android tablets have failed to live up to their lofty expectations, there's a chance that Microsoft (NAS: MSFT) Windows 8 ones will do better. Cypress is one of Mr. Softy's touchscreen controller partners, as is Atmel. Hopefully, Windows 8 will be just the positive catalyst that Cypress needs.
Use our free watchlist feature to stay up to date with the latest developments in the sector. Start by adding these companies now.
Add Cypress Semiconductor to My Watchlist.
Add Atmel to My Watchlist.
Add Texas Instruments to My Watchlist.
Add Synaptics to My Watchlist.
At the time thisarticle was published Fool contributor Evan Niu owns shares of Apple, but he holds no other position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Microsoft and Google. The Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of Google, Microsoft, Cypress Semiconductor, and Apple. Motley Fool newsletter services have recommended writing puts on Barnes & Noble. Motley Fool newsletter services have recommended creating a bull call spread position in Microsoft. Motley Fool newsletter services have recommended creating a bull call spread position in Apple. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.
Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
