UniPixel Q1 Earnings: On the Onramp for a Ramp Up?

Small cap sensor film stockUniPixel Inc (NASDAQ: UNXL) reportedQ1 2017 earnings after the Thursday market close withshares falling both on Thursday and in afterhours trading. UniPixel is not well covered or known by analysts yet and this can make shares volatile. However and last September, we had suggested a long position in the stock based upon technicals by saying:

This is one that’s been on our watchlist for quite a while, and it’s been too persistently resilient to just sit on it any longer.

Take a look. This week, the 20-day moving average line crossed above the 50-day line, and the stock appears to be using that 20-day line as support, putting the finishing touches on what’s been a slow, arcing, but thorough turnaround effort from the pullback during the first half of the year.

Note although Unipixel found resistance at the 100-day moving average line (gray) last month, all four key moving average lines are now pointed upward again, saying the trend is bullish in all timeframes. We suspect the stagnation for the past week and a half is brewing up another round of bullishness.

Q1 revenue totaled $1.3 million versus $0.9 million and there was a net lossof $7.7 million versus a net loss$8.4 million. The CEO made extensive comments about results:

Several important developments with significant implications for the future of UniPixel took place during the first quarter. We are pleased to have many of our 2016 program wins in early stages of volume production and the factory focused on ramping output for these programs.

Launching multiple programs is not without challenges. For example, we did experience a major issue during the quarter with materials provided to us by one of our leading suppliers that caused significant yield issues. The vendor worked closely with us to identify the issues and provide the appropriate solutions. While it did impact our operations for the quarter, we believe the issue is contained…

Demonstration units of our new highly differentiated Diamond Touch technology was very well received by visitors to our suite during CES in Las Vegas this past January. Diamond Touch is the thinnest, no cover lens touchscreen sensor configuration in the industry to reduce solution cost significantly. The technology will provide systems integrators and OEMs the ability to produce lighter and faster devices at a lower cost. It has the potential to open the door to the 80% of the laptop market that is currently not touch enabled and represents an addressable market estimated to be approximately $750 million annually. We recently took delivery of a new custom designed Diamond Guard coating equipment to support Diamond Touch manufacturing and prepare for customer evaluation process to secure design wins.

In March, we announced a long-term agreement with a leading U.S.-based PC manufacturer to supply XTouch sensors. The agreement provides that the PC maker will supply rolling forecasts to UniPixel who will use its reasonable efforts to reserve manufacturing capacity for the PC maker who, in turn, agrees to use its best commercial efforts to make the purchases outlined in the rolling forecasts. This provides us a level of visibility into market demand and an indication into new product development. We look forward to working with this industry leader in the coming years.

A technical chart for Uni-Pixel though shows a downtrend, but also a possible reversal or bounce after a steep late April drop off:

A long term performance chart shows Uni-Pixel a massive 2014 spike with shares severely falling off while potential peers like Corning Incorporated (NYSE: GLW) andUniversal Display Corporation (NASDAQ: OLED)have not been highflyers, but are now performing better:

Finally, here is a quick recap of Uni-Pixels earnings history along with EPS estimate trends from the Yahoo! Finance analyst estimates page as the stock headed into earnings:

EPS Est. -0.15 -0.13 -0.11 -0.11
EPS Actual -0.24 -0.16 -0.17 -0.16
Difference -0.09 -0.03 -0.06 -0.05
Surprise % -60.00% -23.10% -54.50% -45.50%
EPS TrendCurrent Qtr. (Mar 2017)Next Qtr. (Jun 2017)Current Year (2017)Next Year (2018)
Current Estimate -0.11 -0.1 -0.33 0.1
7 Days Ago -0.11 -0.1 -0.33 0.1
30 Days Ago -0.11 -0.1 -0.33 0.1
60 Days Ago -0.1 -0.1 -0.33 0.07
90 Days Ago -0.12 -0.11 -0.29 0.08

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