Himax (HIMX): Should You Purchase, Sell, or Retain After Q4 Results?

Himax Stock Performance Since August 2025

Since August 2025, Himax shares have remained mostly flat, slipping by 0.6% and hovering near $7.72. In contrast, the S&P 500 advanced 6.2% during the same timeframe, leaving Himax trailing behind the broader market.

Should you consider adding Himax to your investment portfolio, or is caution warranted?

Why We Believe Himax May Not Outperform

At this time, we’re not optimistic about Himax’s prospects. Below are three key reasons to be wary of HIMX, along with a stock we prefer instead.

1. Declining Revenue Trend

Assessing a company’s long-term track record can reveal much about its underlying strength. While any business can have a few strong quarters, truly robust companies deliver consistent growth over many years. Over the past five years, Himax has struggled with weak demand, resulting in an average annual revenue decline of 1.3%. This ongoing contraction points to fundamental challenges in the business. The semiconductor sector is known for its cyclical nature, so investors should be prepared for alternating periods of expansion and contraction.

Himax Quarterly Revenue

2. Weak Gross Margins Indicate Structural Issues

Gross margin is a crucial indicator for semiconductor companies, as it reflects how much profit remains after covering the costs of materials, manufacturing, and other inputs.

Himax’s gross margin ranks among the lowest in its industry, highlighting its limited pricing power and the intense competition it faces. Over the past two years, the company’s average gross margin was just 30.5%, meaning that for every $100 in revenue, $69.49 went to suppliers and production costs.

Himax Trailing 12-Month Gross Margin

3. Deteriorating Operating Margins

Operating margin is a comprehensive measure of profitability, showing how much profit remains after all operating expenses, including research and development, marketing, and production, are accounted for.

Himax’s operating margin has dropped by 29.9 percentage points over the past five years, reflecting rising costs that the company was unable to offset through higher prices. For the most recent 12 months, its operating margin stood at just 5.3%.

Himax Trailing 12-Month Operating Margin (GAAP)

Our Verdict

While we support companies tackling complex technology challenges, we’re taking a cautious stance on Himax. The stock has lagged the market and currently trades at a forward P/E of 31.7× (or $7.72 per share), suggesting that much optimism is already reflected in the price. We believe there are more attractive opportunities available. Consider exploring as a better alternative.

Stocks We Prefer Over Himax

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Our list features well-known leaders like Nvidia, which soared 1,326% from June 2020 to June 2025, as well as lesser-known success stories such as Comfort Systems, which posted a 782% five-year return. Start your search for the next breakout stock with StockStory today.