Fingerprint Cards AB (publ) (FING-B.ST) Stock Analysis & Winston Score

Fingerprint Cards AB, based in Sweden, makes fingerprint sensor technology used to unlock smartphones, payment cards, and other devices. The company sells its fingerprint chips and software to electronics manufacturers, mainly in Asia, who build them into consumer products. It was once a dominant supplier of fingerprint sensors for Android smartphones. The company earns revenue by selling hardware chips and licensing its sensor technology to device makers. Most of its sales come from Asian markets, particularly China, where it competes with low-cost local rivals. The smartphone fingerprint sensor market has become heavily commoditized, which explains the company's deeply negative operating margins and poor returns on capital. Fingerprint Cards is trying to diversify into biometric payment cards — credit and debit cards with a built-in fingerprint scanner — as a new growth avenue, but adoption of that technology has been slower than expected, and the company faces an ongoing challenge simply returning to consistent profitability.