Why Cypress Semiconductor Stock Tumbled 16% in 2018

What happened

Shares of chipmaker Cypress Semiconductor (NASDAQ: CY) fell 16.5% last year, according to data provided by S&P Global Market Intelligence , after two analysts released reports toward the end of the year that were skeptical of the company’s near-term growth.

So what

Cypress Semiconductor’s share price was volatile for most of 2018, and by the end of September the company’s stock price gains were nearly flat compared to the beginning of the year. But the company’s shares then took a nosedive at the end of September when a Morgan Stanley analyst reiterated an “underweight” rating for the company and lowered the price target for Cypress from $15 to $13.

Man pointing to a chart with a pen.

Image source: Getty Images.

That bad news was followed up the next day with KeyBanc analyst Weston Twigg downgrading Cypress Semiconductor to “Sector Weight” from “Overweight.” Twigg noted there were three main areas of concern, including a slowdown in the automotive market, NOR Flash (a type of memory chip) prices easing, and “broader-based concerns regarding increased risk of cyclical slowdown.”

The result from the analysts’ comments pushed Cypress’ share price down about 16% in September . The company’s shares then fell an additional 11% in October after a weak outlook from fellow chipmaker Texas Instruments spooked investors.

Now what

Investors seem to be less concerned about the potential slowdown in the semiconductor market right now, as Cypress Semiconductor’s shares are up about 5% since the beginning of this year. The company will report its fourth-quarter 2018 results at the beginning of next month; management expects sales to be in the range of $585 million to $615 million and non- GAAP earnings per share of $0.31 to $0.35. If the fourth-quarter results meet those expectations, Cypress’ sales will be essentially flat year over year, and non-GAAP earnings per share would be up by 18%, both at the midpoint of guidance.

10 stocks we like better than Cypress Semiconductor

When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has quadrupled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now… and Cypress Semiconductor wasn’t one of them! That’s right — they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of November 14, 2018

Chris Neiger has no position in any of the stocks mentioned. The Motley Fool owns shares of Texas Instruments. The Motley Fool recommends Cypress Semiconductor. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Referenced Symbols: CY

Zeen is a next generation WordPress theme. It’s powerful, beautifully designed and comes with everything you need to engage your visitors and increase conversions.

Wealth Empire Newsletter
Register now for free updates and alerts

Subscribe By

Note: I have the ability to revoke this permission at any time and ask for the removal of my personal data collected by contacting us or simply clicking Unsubscribe.