Value
7.3/10data confidence 67%| Component | Sub-score |
|---|---|
| P/E | 1.2 |
| P/S | 8.2 |
| Fwd P/E | 8.2 |
| PEG | 10.0 |
- ▸Forward P/E: 14.3x
- ▸PEG: 0.03
- ▸Attractively valued
HIMX · Why this verdict
Why Himax Technologies (HIMX) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. The TrendMatrix editorial team frequently holds personal long-term positions in securities discussed. We disclose positions held at the time of publication on each piece. We maintain a trading-window policy: we do not initiate or close positions in the same direction as a TrendMatrix publication within 24 hours before or 72 hours after publication.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security. Our sole compensation is subscription revenue.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictSELL
Overall score4.3/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Revenue declined approximately 8% in the most recent period, reflecting active contraction of the top line rather than a deceleration in growth — a fundamental deterioration that limits the base from which any earnings recovery can build. Growth breakdown | Revenue growth turns positive and exceeds 5% year-over-year for 2 consecutive quarters, confirming the contraction has reversed. | →Stable |
| CounterTwo recent quarters of positive earnings surprises suggest management is effectively managing the cost structure through the revenue trough; if end-market demand recovers, operating leverage could drive a sharp earnings recovery even before full revenue restoration. | ||
The business has no identifiable competitive moat and quality metrics fall below the minimum acceptable threshold, limiting the company's ability to sustainably earn returns above the cost of capital through cycles. Bear case | Return on assets and gross margin trends show sustained improvement over 2 consecutive quarters, approaching a quality level that clears the minimum acceptable bar. | →Stable |
| CounterA Piotroski F-Score of 8/9 indicates that balance sheet and cash flow signals are relatively healthy; the low moat assessment may reflect a cyclical trough rather than a permanent structural deficiency. | ||
Free cash flow is negative, running at approximately -57% of net income — meaning the company consumes more cash than it earns on a true economic basis despite reporting positive GAAP earnings — a red-flag indicator for earnings quality. Quality breakdown | Free cash flow turns positive and reaches at least 50% of net income for 2 consecutive quarters, confirming that reported earnings are translating into real cash generation. | →Stable |
| CounterThe negative FCF-to-net-income ratio may reflect a temporary capital spending or working capital build tied to a product cycle; once inventory normalizes or the spending phase ends, the conversion deficit could reverse quickly. | ||
A put/call ratio of 1.89, well above the neutral 1.0 level, combined with implied volatility at 155%, signals that the options market is positioned defensively — more bearish bets than bullish at an elevated level of pricing uncertainty. Risk breakdown | Put/call ratio falls below 1.0 and implied volatility compresses below 80%, signaling a shift toward more balanced or bullish market positioning. | →Stable |
| CounterExtremely elevated implied volatility can reflect hedgers protecting long positions rather than outright bearish speculators; if the elevated puts are portfolio hedges, the underlying holder base may in fact be constructive on the fundamental story. | ||
Revenue declined approximately 8% in the most recent period, reflecting active contraction of the top line rather than a deceleration in growth — a fundamental deterioration that limits the base from which any earnings recovery can build.
→StableGrowth breakdown
- Expectation
- Revenue growth turns positive and exceeds 5% year-over-year for 2 consecutive quarters, confirming the contraction has reversed.
CounterTwo recent quarters of positive earnings surprises suggest management is effectively managing the cost structure through the revenue trough; if end-market demand recovers, operating leverage could drive a sharp earnings recovery even before full revenue restoration.
The business has no identifiable competitive moat and quality metrics fall below the minimum acceptable threshold, limiting the company's ability to sustainably earn returns above the cost of capital through cycles.
→StableBear case
- Expectation
- Return on assets and gross margin trends show sustained improvement over 2 consecutive quarters, approaching a quality level that clears the minimum acceptable bar.
CounterA Piotroski F-Score of 8/9 indicates that balance sheet and cash flow signals are relatively healthy; the low moat assessment may reflect a cyclical trough rather than a permanent structural deficiency.
Free cash flow is negative, running at approximately -57% of net income — meaning the company consumes more cash than it earns on a true economic basis despite reporting positive GAAP earnings — a red-flag indicator for earnings quality.
→StableQuality breakdown
- Expectation
- Free cash flow turns positive and reaches at least 50% of net income for 2 consecutive quarters, confirming that reported earnings are translating into real cash generation.
CounterThe negative FCF-to-net-income ratio may reflect a temporary capital spending or working capital build tied to a product cycle; once inventory normalizes or the spending phase ends, the conversion deficit could reverse quickly.
A put/call ratio of 1.89, well above the neutral 1.0 level, combined with implied volatility at 155%, signals that the options market is positioned defensively — more bearish bets than bullish at an elevated level of pricing uncertainty.
→StableRisk breakdown
- Expectation
- Put/call ratio falls below 1.0 and implied volatility compresses below 80%, signaling a shift toward more balanced or bullish market positioning.
CounterExtremely elevated implied volatility can reflect hedgers protecting long positions rather than outright bearish speculators; if the elevated puts are portfolio hedges, the underlying holder base may in fact be constructive on the fundamental story.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Himax screens below the minimum quality threshold with free cash flow running negative at roughly -57% of net income, revenue declining approximately 8%, and no competitive moat identified; despite a recent earnings beat streak and a favorable technical position above the 200-day moving average, the fundamental picture lacks the earnings quality or growth trajectory to support a constructive thesis at current levels.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
3.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 1.2 |
| ROA | 0.9 |
| Gross margin | 2.1 |
| Op margin | 2.0 |
| Net margin | 2.0 |
| Current ratio | 5.9 |
| FCF quality | 0.0 |
| Moat | 3.9 |
| Piotroski F | 8.9 |
- ▸Earnings quality RED FLAG: -57% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 8/9
- ▸Quality concerns
Growth
0.6/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 0.6 |
- ▸Declining revenue: -8%
Momentum
3.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 8.0 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 4.0 |
| Volume | 4.3 |
- ▸Uptrend pullback (RSI 35) - buy opportunity
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 9.8 |
| erm sentiment | 5.0 |
- ▸Analyst upside: 69%
Insider
5.0/10data confidence 50%Peer rank
3.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.0 |
| quality rank | 4.1 |
| growth rank | 0.2 |
Technical
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 7.8 |
| support resistance | 8.6 |
| 52w position | 1.4 |
| gap | 7.5 |
- ▸Extreme gap down (-6.3%) - potential reversal
Risk (lower is worse)
3.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 6.6 |
| days to cover | 9.6 |
| volatility | 0.0 |
| put call | 0.0 |
| implied vol | 0.0 |
| max pain risk | 3.0 |
| beta | 2.3 |
| debt equity | 7.1 |
- ▸Elevated put/call: 2.12
- ▸High IV: 114%
- ▸Above max pain $9
Catalyst
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 2.0 |
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (7)
- ASYMMETRY:2.9>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:30d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- MOMENTUM:3.5<4.5
Warning (0)
none
Reward-to-Risk
2.89
Upside
+43.4%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilitySpeculative — Drawdown -43% (>40% off 52w high)
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Value at 7.3 could not lift the engine output above the verdict floor. Failed gate signal: MOMENTUM:3.5<4.5.
The strongest dimensions are Value at 7.3, Sentiment at 6.6, and Catalyst at 6.4; the weakest are Growth at 0.6, Quality at 3.0, and Peer rank at 3.1. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of 2.89 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Negative Free Cash Flow Red Flag
Trip ifFree cash flow rises above 50% of net income for 2 consecutive quarters, confirming positive and improving cash conversion.
- P2Revenue In Active Decline
Trip ifRevenue growth exceeds 5% year-over-year for 2 consecutive quarters.
- P3No Moat Quality Below Floor
Trip ifReturn on assets rises above 0% for 2 consecutive quarters.
- P4Elevated Put Call Bearish Positioning
Trip ifPut/call ratio falls below 1.0 for 4 consecutive weeks and implied volatility compresses below 80%.