OmniVision Technologies, Inc. (OVTI): Did the Street Crush This Stock With Unrealistic Expectations?

The company’s products cover the entire range of smartphones and tablets beginning from budget to premium. In addition, it has established itself in key regions such as North America, China, Taiwan and Japan. OmniVision expects budget smartphones in China to improve its revenue further and has tied up with a number of Chinese phone makers that sell devices at various price points.

Moreover, OmniVision is witnessing traction in the automotive space for its sensors. It landed several design wins last year at a “major OEM,” which is none other than Tesla Motors Inc (NASDAQ:TSLA). OmniVision was selected by the carmaker to power the rear-view camera system of the popular Model S.

The Model S turned out to be the fourth best-selling plug-in vehicle in the December quarter, edging out the Ford C-Max Energi. Tesla is expected to do even better this year as the company has improved its production capacity to 400 units per week for the Model S and expects to turn profitable in the second quarter. OmniVision’s relationship with a popular name such as Tesla, and increasing sales of the Model S, should turn out to be an asset in the future.

The bottom line

The market for imaging sensors is huge, and OmniVision is trying to capture as much of it as possible through its cutting-edge products. The company is growing pretty fast and investors should be prepared for such volatility. Moreover, the Street expectation for the current quarter seems a bit too high, especially considering the fact that it is just coming off an astronomic quarter.

Nevertheless, the company looks to be on the correct path and investors with a long-term view shouldn’t panic since there’s still a lot of growth lying ahead for OmniVision.

The article Did the Street Crush This Stock With Unrealistic Expectations? originally appeared on Fool.com and is written by Harsh Chauhan.

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