Needham initiates Synaptics stock with Buy rating, $80 target

Published 09/05/2025, 12:20
Needham initiates Synaptics stock with Buy rating, $80 target

On Friday, Synaptics (NASDAQ:SYNA) shares received a positive outlook from Needham as the firm initiated coverage with a Buy rating and set a price target of $80. Currently trading at $59.79, the stock has shown strong momentum with a 2% gain over the past week. The new coverage comes on the heels of Synaptics reporting a modest beat and raise for the fifth consecutive quarter, showcasing year-over-year revenue growth of 10.6%. According to InvestingPro data, seven analysts have recently revised their earnings estimates upward for the upcoming period.

The company, known for its human interface solutions, has not been directly affected by tariffs, and current cyclical data suggests a continuing recovery. With a healthy current ratio of 2.88 and trading at a P/E ratio of 14.15, the company maintains a strong financial position. Needham’s coverage transfer to Nick Doyle reflects confidence in Synaptics’ execution, especially considering the shift in its historical target market from IT enterprise spending to areas like AI data center buildouts.

Synaptics’ recent strategic moves, particularly in the Core IoT space through partnerships with Google (NASDAQ:GOOGL) and Broadcom (NASDAQ:AVGO), are seen as positioning the company for stronger growth. Expectations are set for the launch of WiFi-7 devices later in the year, while the Veros and Astra product families are anticipated to contribute to the company’s performance in FY27. Additionally, new product offerings such as UPD and Foldable OLED controllers are expected to bolster growth.

The price target of $80 is based on approximately 17 times Needham’s estimated CY26 earnings per share (EPS) of $4.75. This valuation reflects the firm’s positive outlook on Synaptics’ future financial performance and market position. InvestingPro analysis suggests the stock is currently undervalued, with analyst targets ranging from $80 to $100. Discover more detailed insights and 8 additional ProTips about Synaptics in the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

In other recent news, Synaptics Incorporated has reported impressive financial results for its fiscal third quarter of 2025, surpassing earnings expectations. The company achieved an earnings per share (EPS) of $0.90, exceeding the forecasted $0.8592, and marking a significant 70% increase from the previous year. Revenue also saw an increase, reaching $266.6 million, slightly above the anticipated $265.03 million. The company has provided positive guidance for the upcoming quarter, with expected revenue of $280 million. Synaptics has been focusing on its IoT and AI sectors, with core IoT product sales surging by 43%. The company has recently launched innovative products in these areas, contributing to its strong market position. Additionally, Synaptics’ stock received a positive reaction following the earnings announcement, reflecting investor confidence. Analyst discussions during the earnings call included inquiries about the impact of the Broadcom acquisition and the company’s investments in AI edge computing solutions.

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