Google Inc (GOOG): A Glass Dilemma

Google Inc (GOOG): A Glass Dilemma

Are you ready to wear the future?

The buzz around Google Glass (Google’s wearable computer) has the general public, and investors, waiting on bated breath for the gadget to reach the public market. Google has paired up with Taiwanese semiconductor company Himax Technologies, Inc. (ADR) (NASDAQ:HIMX) to bring the product to the masses with Himax’s Liquid Crystal on Silicon (also known as LCoS) business. The process to bring Google Glass to market is taking longer than anticipated, but many analysts are patient and are recommending BUY Himax as they look long-term. However, some analysts are not as optimistic and are ready to SELL Himax.

NCP Northland analyst Tom Sepenzis recommends BUY Himax Technologies, Inc. (ADR) (NASDAQ:HIMX) with a $20 price target saying, “Google Glass fears are overblown.” The stock took an 11% dip yesterday “over fears that Google Inc (NASDAQ:GOOG)’s Glass may not materialize in 2014, a possibility that is, for the most part, irrelevant to the story. Himax has a number of other opportunities with LCoS in the near-term and long-term, along with several other significant drivers that should help them meet-or-beat our estimates going forward.” Tom also argued that the delay in Google Glass seems to be a result of Google trying “to deliver a product that will be far more compelling than the original beta.” Tom has a +9.0% average return over S&P 500 (INDEXSP:.INX) and a 67% success rate of recommended stocks.

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On the other hand, Merrill Lynch analyst Daniel Heyler is not as positive about the situation, and recommends SELL Himax Technologies, Inc. (ADR) (NASDAQ:HIMX) . Daniel is concerned about the lag in Himax’s Liquid Crystal on Silicon business saying, “Mgmt viewed this as a niche market in the early stages of development. We remain positive on LCoS opportunities in industrial and games but a broad-based consumer roll-out by Google Inc (NASDAQ:GOOG) will be highly calculated; It’s difficult to recover from a flopped consumer electronics new product roll-out.” Daniel is not expecting Google Glass to appear any time this year.

Daniel also noted that the company depends on the LCoS business arguing, “The company is competing in a number of highly competitive markets so sharp margin expansion will be difficult without a sharp ramp in LCoS. Our numbers reflect 2ppt OPM expansion and 28% revenue growth in relatively competitive, high-volume standard products known for undergoing pricing pressure.” Based on the competitive market, and Google Inc (NASDAQ:GOOG)’s Glass delays, Daniel turned to a SELL rating. Daniel has a -4.8% over S&P-500 and a 33% success rate of recommendations.

Himax Technologies, Inc. (ADR) (NASDAQ:HIMX)’s stock value might depend on whether you are wearing Google Glass this year or next, so be sure to follow analyst recommendations throughout 2014 with TipRanks. With TipRanks, you have the tools you need to start making informed financial decisions with advice you can trust.

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