Update: Integrated Device Technology Earnings

Aug.12.14 | About: Integrated Device (IDTI)

Summary

The company managed to beat consensus on the top and bottom lines.

We remain bullish on the company for the long term given its headway with communication and LTE technology.

The recent quarterly strength is well in line with where we saw the company performing.

Integrated Device Technology (NASDAQ:IDTI) posted fiscal 1Q earnings of $0.17 a share (beating consensus of $0.16) and revenues manage to beat marginally. Shares upped nearly 12% in a day on the news. The company also guided fiscal 2Q EPS to be between $0.17 and $0.19, suggesting 70% to 90% y/y growth.

Driving the recent beat and strong expected growth for the rest of year is the 4G and LTE buildouts across the globe. It also recently got a big win with wireless charging. Its wireless power receiver will be used in LG's flagship G3 phone.

After running up nearly 47% since our November article, shares are now trading above our $14 a share price target. But it's worth noting that shares are now trading at 18x 2015 earnings, below our justified multiple of 25x on forward earnings. As we noted in November,

There are several tailwinds that will help drive shares of Integrated Device higher...its products allow its customers to reduce their overall bill-of-materials and increase system performance and lower power consumption while accelerating their time-to-market...Integrated Device's real-world signal processing are ideal solutions for the fast-growing cloud computing, mobile and 4G/LTE markets.

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