NXP Semiconductors -- The Essentials

Now trading at a price of $160.08, NXP Semiconductors has moved -0.7% so far today.

NXP Semiconductors shares moved -5.7% over the last 52 weeks, with a high of $198.28 and a low of $132.08. During this time, the stock lagged the S&P 500 index by -6.0%. As of January 2022, the company's 50-day average price is $176.85. NXP Semiconductors N.V. offers various semiconductor products. The large-cap Technology company has 34,500 full time employees and is based in Eindhoven, Netherlands. NXP Semiconductors has returned a 2.1% dividend yield over the last 12 months.

The Company Has a Steady Stream of Strong Cash Flows:

2019-12-31 2020-12-31 2021-12-31 2022-12-31
Revenue (MM) $8,877 $8,612 $11,063 $13,205
Revenue Growth n/a -2.99% 28.46% 19.36%
Gross Margins 52.0% 49.2% 54.8% 56.9%
Gross Margins Growth n/a -5.38% 11.38% 3.83%
Operating Margins 6.9% 3.5% 23.4% 28.7%
Operating Margins Growth n/a -49.28% 568.57% 22.65%
Net Margins 2.74% 0.6% 16.91% 21.11%
Net Margins Growth n/a -78.1% 2718.33% 24.84%
Earnings Per Share $0.85 $0.18 $6.79 $10.55
EPS Growth n/a -78.82% 3672.22% 55.38%
Diluted Shares (MM) 286 284 276 260
Free Cash Flow (MM) $1,745 $1,960 $2,145 $2,668
FCF Growth n/a 12.32% 9.44% 24.38%
Capital Expenditures (MM) -$628 -$522 -$932 -$1,227
Net Debt / EBITDA 2.48 2.31 2.04 1.47

NXP Semiconductors Shares Are Inexpensive:

Compared to the Technology sector's average of 27.16, NXP Semiconductors has a trailing twelve month P/E ratio of 15.2 and, according to its EPS guidance of 13.85, an expected P/E ratio of 11.6. NXP Semiconductors's PEG ratio is 0.22 based on its 74.7% compound average growth rate of historical and projected earnings per share. However, we believe that it is more prudent to calculate the PEG ratio using the broader market's 5-year expected EPS growth rate of 11.5%, because the growth rate implied by NXP Semiconductors's past and expected EPS is probably not sustainable. This more prudent approach shows a PEG ratio of 1.46, which implies that the company's shares might in fact be fairly valued.

Furthermore, NXP Semiconductors is likely undervalued in terms of its equity because its P/B ratio is 5.6 compared to its sector average of 6.23. The company's shares are currently trading 194.0% above their fair value as expressed by Benjamin Graham's formula:

√(22.5 * 4-year average EPS * book value per share) = √(22.5 * 4.59 * 28.709) = $54.45

NXP Semiconductors Is the Subject of Mixed Market Indicators:

25 analysts are following NXP Semiconductors and have set target prices ranging from $155.0 to $240.0 per share. On average, they have given the company a rating of buy. At the current price of $160.08, NXPI is trading -18.14% away from its average analyst target price of $195.56 per share, implying an analyst consensus of some upside potential for the stock.

The company has an average amount of shares sold short since 2.4% of the company's shares are tied to short positions. Institutions own 94.6% of NXP Semiconductors's shares, while the insider ownership rate stands at 0.15%. The biggest shareholder is JP Morgan Chase & Company with a 10% stake in the company worth approximately $4,162,747,741.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.