Synaptics stock holds Buy rating and $90 target at Needham

On Monday, Synaptics Incorporated (NASDAQ:SYNA), a leading developer of human interface solutions, announced a significant change in its executive leadership. Michael Hurlston has resigned from his roles as President and CEO to take on the CEO position at Lumentum Holdings Inc . (NASDAQ:LITE). Hurlston’s tenure at Synaptics spanned five years, during which he was instrumental in steering the company’s business strategy towards Internet of Things (IoT) applications. According to InvestingPro data, the company maintains strong financial health with a current ratio of 4.49 and operates with moderate debt levels. InvestingPro analysis suggests the stock is currently undervalued, with several positive indicators including strong liquidity and profitability metrics.

Under Hurlston’s guidance, Synaptics significantly broadened its customer base and expanded its product offerings. The company also recently forged key partnerships with industry giants such as Google (NASDAQ:GOOGL) and Broadcom (NASDAQ:AVGO), which are expected to underpin Synaptics’ Core IoT product strategy for the foreseeable future. The company’s strategic initiatives have contributed to its financial stability, with a year-to-date return of 11.44% and a healthy gross profit margin of 46.31%.

Following Hurlston’s departure, Synaptics’ Board of Directors has named CFO and SVP Ken Rizvi as the interim CEO while the search for a permanent successor is underway. Analysts believe that Hurlston’s departure will be felt within the company, as his leadership qualities and strategic vision were well-regarded by investors.

Despite the executive shuffle, Needham analysts, led by Rajvindra Gill, have reiterated their confidence in Synaptics by maintaining a "Buy" rating and a price target of $90.00 for the company’s stock. The firm’s analysts highlight the strategic initiatives and partnerships established during Hurlston’s leadership, which they believe will continue to support Synaptics’ growth in the IoT space.

As the company embarks on its search for a new CEO, the strong foundation laid by Hurlston and the current strategic direction are expected to remain intact, providing continuity and stability for Synaptics and its stakeholders.

In other recent news, Synaptics Incorporated has seen a significant shift in its leadership, with the immediate departure of President and CEO Michael Hurlston, who will assume the CEO role at Lumentum Holdings Inc. Ken Rizvi, Synaptics’ CFO, has stepped in as interim CEO, while Nelson Chan, the board chairman, will act as executive chairman during this transition. The company is currently in the process of hiring a new CEO, considering both internal and external candidates.

Additionally, Synaptics has provided a financial update, forecasting second-quarter revenue to reach $267 million, slightly surpassing its previous estimate of $265 million. The company also expects its earnings per share (EPS) to exceed the midpoint of their guidance of $0.85. In response to these developments, KeyBanc analysts have maintained a Sector Weight rating on Synaptics stock.

On the other hand, Lumentum Holdings has announced the appointment of Michael Hurlston as President and CEO, in conjunction with issuing financial guidance that exceeded expectations. The company’s preliminary fiscal second quarter 2025 financials have surpassed its previous guidance, with net revenue expected to be around $402 million and non-GAAP diluted earnings per share between $0.40 and $0.42.

In other financial news, Synaptics has secured additional funding through the issuance of $50 million in aggregate principal amount of 0.75% Convertible Senior Notes due 2031, known as Option Notes. This follows an earlier announcement of a $400 million offering in convertible senior notes due in 2031. These financial moves indicate Synaptics’ strategic efforts to strengthen its financial position.

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