Pixelworks (NASDAQ:PXLW) is usually a penny stock that few folks talk about. Suddenly, however, Pixelworks is interesting to a lot of traders, making the share price surge. I typically look for dip-buying opportunities, but I am bullish on PXLW stock due to some fresh and exciting news about the company.
Pixelworks provides content creation, video delivery, and display processing solutions. The company’s TrueCut Motion platform enables video creators to create crisp, visually stunning content. Speaking of video content, Pixelworks just inked a deal with a world-famous entertainment company that could make great videos even better and could make early investors a lot of money.
A Major Coup for Pixelworks
If you’re a video content specialist, can you do any better than scoring a deal with the one and only Walt Disney (NYSE:DIS)? I think the answer is no, and it’s certainly a major coup for Pixelworks to enter into a deal with this entertainment industry giant.
Here’s the scoop. I already mentioned Pixelworks’ flagship product, the TrueCut Motion platform. In a fresh announcement, Pixelworks disclosed that it will work with Disney to “bring a collection of TrueCut MotionTM graded titles to select home entertainment devices.”
The press release didn’t specify these titles, unfortunately. Hopefully, we’ll soon find out which films, television programs, and/or other titles will get the TrueCut Motion treatment.
The idea, apparently, is to improve the overall visual quality of these titles. Specifically, Pixelworks’ TrueCut Motion technology can help to eliminate “motion playback anomalies” and maintain the “desired brightness levels” of video content, “all while preserving the authentic cinematic motion look and feel of the source.”
By the way, Pixelworks also looks reasonably solid as a business, with or without the Disney partnership. The company’s third-quarter 2023 revenue increased by 18% sequentially to $16 million, and Pixelworks has a good track record of beating Wall Street’s quarterly EPS estimates.
Is PXLW Stock a Buy, According to Analysts?
On TipRanks, PXLW comes in as a Moderate Buy based on two Buy ratings assigned by analysts in the past three months. The average Pixelworks stock price target is $14, implying 735.8% upside potential.
Conclusion: Should You Consider PXLW Stock?
Pixelworks stock jumped over 60% today at one point on the Disney deal news before eventually pulling back. Nevertheless, the rally doesn’t have to end here. Pixelworks demonstrated revenue growth and earnings beats even before the Disney partnership. Therefore, I am considering PXLW stock for a possible small-sized long position.
