Himax Technologies (HIMX) Margin Compression Challenges Bullish Earnings Growth Narrative
Himax Technologies (HIMX) closed FY 2025 with fourth quarter revenue of US$203.1 million and basic EPS of US$0.07, alongside net income of US$6.3 million, setting a clear marker for how the year wrapped up. Over recent periods the company has seen quarterly revenue move from US$237.2 million and EPS of US$0.14 in Q4 2024 to US$215.1 million and EPS of US$0.11 in Q1 2025, US$214.8 million and EPS of US$0.09 in Q2, and US$199.2 million and EPS of US$0.01 in Q3, before landing at the latest Q4 figures. Investors now have a full year of numbers to weigh against expectations. With trailing 12 month net profit margin sitting below the prior year level, this set of results puts profitability and margin resilience firmly in focus for the next phase of the Himax story.
See our full analysis for Himax Technologies.With the headline figures on the table, the next step is to see how these results compare with the most common narratives around Himax, and which of those stories hold up once you line them up against the actual earnings trend.
See what the community is saying about Himax Technologies
Margins Under Pressure At 5.3%
- On a trailing 12 month basis, Himax earned US$43.9 million on US$832.2 million of revenue, which works out to a 5.3% net profit margin compared with 8.8% a year earlier in the dataset.
- Consensus narrative talks about margin uplift over time from areas like automotive display ICs and WiseEye AI. However, the current 5.3% margin and Q4 FY 2025 net income of US$6.3 million on US$203.1 million of revenue highlight that, so far,
- profitability is sitting below the earlier 8.8% margin level referenced in the same dataset,
- which makes the assumed move to higher margins an ambition that is not reflected in the trailing 12 month figures yet.
EPS Trend Versus Bullish Growth Story
- Basic EPS over FY 2025 moved from US$0.11 in Q1 to US$0.09 in Q2, US$0.01 in Q3 and US$0.07 in Q4, while trailing 12 month EPS stands at US$0.50 and five year trailing earnings in the dataset have declined about 31.8% a year.
- Bulls point to forecast earnings growth of around 47.6% a year as a key support for their view. However, this sits next to
- a recent quarterly EPS path that does not follow that growth profile and
- a five year earnings track record in the data that moves in the opposite direction of the bullish growth expectations.
P/E Discount Meets DCF Gap
- The shares trade on a trailing P/E of 30.7x, below the semiconductor industry average of 43.2x and peer average of 73.4x, while the DCF fair value in the dataset is US$2.28 per share compared with the current price of US$7.72.
- Bears highlight the gap between the current price and the DCF fair value as a concern. That sits alongside
- a multi year earnings decline of about 31.8% a year in the data that gives them more caution around the 30.7x P/E,
- even though that P/E is lower than sector and peer averages, which could be seen as supportive by investors who put less weight on the DCF figure.
Next Steps
To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Himax Technologies on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.
See the numbers differently? Take a couple of minutes to stress test the data against your own view and shape a clear thesis, then Do it your way
A great starting point for your Himax Technologies research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.
Explore Alternatives
Himax is wrestling with a slimmer 5.3% net margin, a trailing 12 month EPS of US$0.50 and a DCF value well below the current share price.
If that mix of pressure on earnings, margins and valuation is making you cautious, it is worth checking out 56 high quality undervalued stocks that currently look cheaper against their fundamentals.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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