Fingerprint Cards (Fingerprints) today is not the same company as it was during its early phase, and it certainly does not have the same market expectations as it did during the stock price peak in 2015. Nevertheless, we think there are still a few tricks up its sleeve that could chart a path to innovation and growth. The decline of the previously quite profitable market of capacitive fingerprint sensors for smartphone implementation has prompted many investors to give up on the company, but we do not believe it is time to pull the plug just yet. – Marketing material commissioned by Fingerprint Cards.
Company update: Reversed margin trend, many bets ahead
Fingerprints’ gross margin has been in decline for the past nine quarters. However, in Q3 it was 27%, 7 pp above our estimate and up 12 pp sequentially. Net sales came in at SEK 431m for Q3, 4.5% below our estimate. Operating cash flow was a positive SEK 202m and pre-tax profit SEK 3m, turning the company to profitability for the first time in a year and alleviating the risk of management turning to the capital markets.
Company update: Q2 2018 report
Fingerprints reported Q2 net sales of SEK 389.9m, up 35% sequentially but down 53% from
Q2 2017. The gross margin adjusted for the inventory writedown was 15%, the same as in Q1.
The operating profit was impacted by restructuring costs from the cost-cutting programme
and by writedowns in inventory and capitalised R&D, ending up at SEK -578.2m.
Marketing material commissioned by Fingerprint Cards.
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