SYNA - Headwinds At Synaptics Will Be Temporary

2023-05-01 01:02:13 ET

Summary

• The company has made a successful transition towards servicing the IoT market, benefiting from its core capabilities as well as a market secular tailwind.
• However, progress is being rudely interrupted by a substantial inventory correction, as economies are slowing down and scarcities turn into a glut.
• This should be over within a couple of quarters, and given the still benign valuation for the shares, we think this is a buying opportunity.
• The inventory correction could turn worse if the economy enters in a recession, but even if that happens, it's temporary.

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