PXLW - Pixelworks stock gains over 7% on bright outlook strong results

Pixelworks ( NASDAQ: PXLW ) stock gained 7.9% on Tuesday after the video display processing solution provider issued Q4 adj. earnings guidance above estimates in a post-earnings call .

The company expects Q4 adj. EPS to range between loss of $0.04 and income of $0.01 vs. consensus estimate of -$0.05. Revenue is projected to be $16M-$18M vs. consensus estimate of $17.17M.

Adj. gross profit margin is expected to be 56-58%, reflecting "a more favorable product mix comprised of an expected increase in licensing revenue and revenue related to the end of life of certain legacy chips sold into the video delivery market", CFO Haley Aman explained.

Pixelworks ( PXLW ) reported Q3 adj. EPS of -$0.06 vs. -$0.04 in Q3 2021. Revenue rose 15.8% Y/Y to $17.6M, driven by strong growth of visual processor solutions in the mobile market as well as sustained customer demand and recovery in the projector market.

Pixelworks ( PXLW ) also said it closed a new investment in its Shanghai unit at nearly 2x the valuation of the previous funding round, valuing the subsidiary at ~$471.5M.

The company ended Q3 with cash and cash equivalents of $57.6M, which reflects $10.7M in net proceeds from closing the deal to transfer ~2.7% of its stake in its Shanghai unit to new private equity investors.

Shares of Pixelworks ( PXLW ) fell 68% YTD. The stock is at high risk of performing badly, to the point that it gets a Sell rating from SA Quant .

For further details see: