Last Update 23 Jan 26

Fair value Increased 5.32%

SYNA: Edge AI Partnerships And CES Exposure Will Support Balanced 2026 Outlook

Narrative Update on Synaptics

Our updated analyst price target for Synaptics moves from $87.18 to $91.82, reflecting analysts' recent target increases across the Street and their use of a slightly lower discount rate alongside a higher assumed future P/E multiple, even as they calibrate profit margin expectations.

Analyst Commentary

Recent Street research around Synaptics points to a cluster of higher price targets, with analysts updating their models to reflect new assumptions on discount rates, P/E multiples and sector positioning within semiconductors and related equipment.

One detailed 2026 outlook in the group places more emphasis on AI accelerators, wafer fab equipment, optical and memory, while taking a more cautious stance on electric vehicles, autos, analog, computers and handsets. Within that framework, Synaptics is reassessed alongside larger peers, even though the top picks in that report are other names in the sector.

Bullish Takeaways

Bullish analysts are lifting price targets, which signals they see more headroom in their Synaptics valuation models even as they keep a close eye on profit margin assumptions.
Adjustments to slightly lower discount rates and higher assumed future P/E multiples suggest increased confidence in execution and earnings durability relative to prior models.
The inclusion of Synaptics in broader 2026 semiconductor outlooks, even where other names are the preferred picks, indicates the company is still viewed as part of a sector with perceived upside potential tied to areas like AI and memory.
Maintained positive ratings from some coverage point to expectations that Synaptics can continue to participate in sector growth, especially if it benefits indirectly from demand in AI accelerators and related infrastructure.

Bearish Takeaways

Even within constructive sector reports, Synaptics is not highlighted as a top pick, which signals some analysts may see more attractive risk reward elsewhere in semis.
Caution around electric vehicles, autos, analog, computers and handsets shows that any reliance Synaptics has on these end markets could cap growth expectations in some models.
The need to recalibrate profit margin expectations, even alongside higher targets, indicates that analysts are not uniformly confident about margin expansion and are still stress testing execution.
Targets are being adjusted as part of a broader sector review for 2026, so some of the upside in Synaptics models may be tied more to sector re-rating than to company specific growth, which can limit conviction for more cautious analysts.

What's in the News

Origin AI and Synaptics are partnering to integrate WiFi Sensing software with Synaptics Wireless Connectivity SoCs and Astra AI-native processors, targeting faster deployment of motion sensing and on-device AI across smart plugs, home hubs, security devices, lighting, and broader smart home applications (Client Announcements).
Edgecore Networks and Synaptics are collaborating on scalable Edge AI and AIoT platforms, including an AIoT Edge Hub built on the Astra SL1620 processor and Veros SYN4612 wireless solution with Wi-Fi, Bluetooth/BLE, Thread and Zigbee, plus Wi-Fi HaLow powered by Morse Micro, with a joint showcase planned for CES 2026 (Product Related Announcements).
Synaptics plans to showcase a wide range of AI-native processing, sensing, and connectivity technologies at CES 2026, highlighting applications across smart home, industrial automation, robotics, personal devices, and long-range wireless connectivity at its private suite in the Venetian Hotel (Product Related Announcements).
Synaptics and Qualcomm Technologies have entered into an engagement focused on touch and fingerprint sensor technology for OLED-based smartphones, tablets, wearables, and AI PCs, aiming to simplify integration for OEMs and support AI-based, secure user experiences across mobile and PC platforms (Client Announcements).
Synaptics issued guidance for the second quarter of fiscal 2026, expecting GAAP revenue of US$300 million ± US$10 million and a GAAP loss per share of US$0.50 ± US$0.25 (Corporate Guidance).

Valuation Changes

Fair Value: The updated analyst fair value estimate has risen slightly from US$87.18 to US$91.82 per share.
Discount Rate: The discount rate used in models has fallen slightly from 11.82% to 11.62%, indicating a modest adjustment to perceived risk or required return.
Revenue Growth: The revenue growth assumption is essentially unchanged, moving marginally from 9.73% to 9.73%.
Net Profit Margin: The net profit margin assumption has fallen slightly from 14.71% to 14.17%, reflecting more conservative profitability inputs.
Future P/E: The future P/E multiple assumption has risen from 21.48x to 23.37x, indicating a higher valuation multiple applied to expected earnings.

Strategic emphasis on Core IoT and Edge AI positions Synaptics for revenue growth, reduced reliance on legacy markets, and increased differentiation in next-gen applications.
Integrated product offerings and disciplined investment are set to boost gross margins, operational leverage, and forward revenue visibility through expanded customer engagements.
Strategic focus on high-return segments, execution risk in sales scaling, and competitive pressures threaten future growth, margins, and profitable expansion if not managed effectively.

Catalysts

About Synaptics

Develops, markets, and sells semiconductor products worldwide.What are the underlying business or industry changes driving this perspective?

Synaptics' accelerated focus on Core IoT, evidenced by 53% YoY growth in FY25 and a strong pipeline of Wi-Fi 7 and Edge AI products, positions the company to benefit from the expanding proliferation of connected devices across industrial, enterprise, and consumer markets; this expansion should boost top-line revenue and reduce dependency on legacy markets.
The launch and initial customer traction of native Edge AI processors (Astra family, featuring Google Research collaboration and neural transformer support) targets the growing shift toward on-device processing for AI workloads, potentially establishing Synaptics as a key supplier for next-gen IoT applications and improving both revenue growth and product differentiation.
The company's strategy to bundle highly-integrated solutions combining wireless connectivity, low-power mixed-signal processing, and embedded AI/software content is expected to increase silicon content per device and drive higher gross margins as more revenue is captured per customer design win.
Active product portfolio optimization, including organic and disciplined inorganic investment, is intended to repurpose engineering talent toward higher ROI segments (especially Core IoT and Edge AI), which supports expanding operational leverage and could contribute to margin expansion and operating earnings growth.
Growing design funnel and marquee customer wins with advanced audio OEMs, combined with healthy, lean channel inventory and backlog, provide improved forward visibility, setting up for future revenue acceleration as next-gen product ramps coincide with broader IoT and edge computing adoption trends.

Synaptics Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Synaptics's revenue will grow by 9.6% annually over the next 3 years.
Analysts are not forecasting that Synaptics will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Synaptics's profit margin will increase from -4.4% to the average US Semiconductor industry of 14.1% in 3 years.
If Synaptics's profit margin were to converge on the industry average, you could expect earnings to reach $199.2 million (and earnings per share of $5.86) by about September 2028, up from $-47.8 million today. The analysts are largely in agreement about this estimate.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 19.4x on those 2028 earnings, up from -56.5x today. This future PE is lower than the current PE for the US Semiconductor industry at 33.5x.
Analysts expect the number of shares outstanding to decline by 3.5% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 11.34%, as per the Simply Wall St company report.

Synaptics Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Management highlighted the need to evaluate and potentially divest or deemphasize certain product categories, suggesting Synaptics may face challenges in maintaining a broad product portfolio; failure to successfully focus on high-ROI segments or to divest/repurpose assets efficiently could constrain long-term revenue and profitability.
The transition toward becoming a solutions-based provider in Core IoT and scaling the customer base from dozens to thousands is still in its early stages, and Synaptics lacks a robust channel presence; execution and ramp-up risk in sales channels and customer acquisition could limit top-line growth and earnings scalability.
There was acknowledgement that industrial IoT is not yet a strength for the company and that, although the product roadmap aspires to serve both consumer and industrial, difficulties in achieving organic traction or requiring acquisitions could suppress addressable market expansion and slow future revenue streams.
Competitive pressure is implicit in the emphasis on pricing optimization, differentiation, and mix management-if Synaptics cannot maintain pricing power or product margin as it scales or if competitors outpace their solution offerings, gross margins and net income could be compressed long-term.
Management repeatedly stressed the importance of disciplined investment and capital allocation, with organic growth prioritized but potential for inorganic moves; this raises risk that rising R&D costs or poorly timed acquisitions (or a failure to make necessary ones) might erode net margins and long-term earnings if growth doesn't materialize as projected.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $82.25 for Synaptics based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $95.0, and the most bearish reporting a price target of just $65.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $1.4 billion, earnings will come to $199.2 million, and it would be trading on a PE ratio of 19.4x, assuming you use a discount rate of 11.3%.
Given the current share price of $69.92, the analyst price target of $82.25 is 15.0% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Core IoT And Edge AI Will Unlock Future Potential