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Apple ( AAPL ) Watch supplier Integrated Device Technology ( IDTI ) is outgrowing the broad chip market with “superior” financial returns, a Needham analyst wrote Monday as he initiated coverage of the stock. But Integrated Device stock hasn’t recovered from a Feb. 2 nosedive that saw shares plunge 27% on the company’s massive March-quarter guidance miss. Wall Street had set the high bar after Integrated Device acquired privately-held ZMDI in December. Shares are now down 23% for the year. Intraday on the stock market today , Integrated Device stock was down more than 1%, near 20, despite Needham analyst N. Quinn Bolton’s buy rating and 26 price target. Integrated Device stock trades at an “unwarranted” discount to rivals, Bolton wrote in his research note. The company leads in its bread-and-butter wireless charging market with design wins at Samsung, Apple, LG, Ikea and Marriott ( MAR ). Bolton estimates the market will be a $500 million opportunity by 2020. By 2019, the market for memory interfaces — which improve computer memory bandwidth in servers — will grow to a $452 million opportunity from $144 million in 2011, Bolton estimates. “Though we expect a pause in Integrated Device’s memory interface revenue in 2017 as Broadwell-based servers ramp, we forecast a resumption in growth in 2018 as Intel ‘s ( INTC ) Purley platform ramps,” he wrote. Sales of high-performance, energy-efficient analog/mixed-signal chips will grow to $138 million in 2018 from $5 million in 2014, he says. Integrated Device diversified into that segment with its ZMDI acquisition. Scalper1 News
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