Following the release of preliminary third quarter expectations, Roth MKM analyst Suji Desilva remains bullish on Pixelworks (Pixelworks Stock Quote, Chart, News, Analysts, Financials Nasdaq:PXLW).
On October 4, PXLW reported that it expects third quarter revenue will come in at $16-million, a topline that would be up 18 per cent over the same period last year.
“Mobile revenue in the third quarter is expected to increase over 20% sequentially and over 35% year-over-year to a new quarterly record and anticipated to represent more than 50% of total revenue,” commented Todd DeBonis, President and CEO of Pixelworks. “We have experienced a positive response on the first IRX-certified smartphone models launched by our tier-one customers, including multiple upside orders. Additionally, our collaborative engagements with the top gaming studios, including Nuverse-ByteDance, Perfect World and NetEase, have been well received by the mobile gaming ecosystem. As a result, our bookings to-date fully support continued sequential growth in mobile with total revenue for the fourth quarter expected to be at least $19 million.”
The analyst gave his take on the development.
“PXLW released prelim 3Q23 revenue expectations of $16m (+17.5% q/q), in-line with prior guidance,” he said. “We believe PXLW is seeing strong traction with its new smartphone models where consumer are responding well to IRX-gaming certified smartphone models. Additionally, we believe PXLW efforts to seed the mobile gaming market through a top gaming studio partnership is bearing fruit. Management expects 4Q23 revenue of $~19m (+~20% q/q), above consensus expectations of $17m (+7% q/q), further reflecting the company’s mobile momentum. Given this updated guidance, we gain stronger confidence in our CY24 expectations for continued strong y/y growth.”
In a research update to clients October 4, Desilva maintained his “Buy” rating and one-year price target of $3.00 on PXLW, which closed October 3 at $1.07.
Desilva thinks Pixelworks will post an EPS loss of $0.25 on revenue of $72.5-million in fiscal 2024.
About The Author /
Cantech Letter founder and editor Nick Waddell has lived in five Canadian provinces and is proud of his country's often overlooked contributions to the world of science and technology. Waddell takes a regular shift on the Canadian media circuit, making appearances on CTV, CBC and BNN, and contributing to publications such as Canadian Business and Business Insider.
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