Infineon (IFNNY) AI Stock Analysis

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Infineon

(OTC:IFNNY)

55Neutral

Infineon's overall stock score is moderate, reflecting a blend of strong financial stability and profitability, but significant challenges in cash flow and valuation. The technical indicators show bearish sentiment, contributing to a cautious outlook. While the earnings call provides some optimism, the valuation appears stretched given the hurdles in industrial and IoT markets.

Infineon (IFNNY) vs. S&P 500 (SPY)

Market Cap

$38.07B

Dividend Yield0.84%

Average Volume (3M)32.83K

Price to Earnings (P/E)37.9

Beta (1Y)1.43

Revenue Growth-8.53%

EPS Growth-68.71%

CountryUS

Employees58,008

SectorTechnology

Sector Strength51

IndustrySemiconductors

Share Statistics

EPS (TTM)0.77

Shares Outstanding1,305,921,100

10 Day Avg. Volume98,504

30 Day Avg. Volume32,834

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)2.86

Price to Cash Flow (P/CF)17.00

P/FCF Ratio194.90

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$56.80

Price Target Upside94.52% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering1

Infineon Business Overview & Revenue Model

Company DescriptionInfineon Technologies AG designs, develops, manufactures, and markets semiconductors and related system solutions worldwide. Its Automotive segment offers automotive microcontrollers; 3D ToF, magnetic, and pressure sensors; discrete power semiconductors; IGBT modules; industrial microcontrollers; power and radar sensor integrated circuits (ICs); transceivers; silicon carbide diodes, MOSEFTs, and modules; and voltage regulators for use in assistance and safety systems, comfort electronics, infotainment, powertrain, and security products. The company's Industrial Power Control segment provides bare dies, discrete IGBTs, driver ICs, SIC diodes, and IGBT modules and stacks for home appliances, industrial drives, industrial power supplies, industrial robotics, industrial vehicles, and traction, as well as for energy generation, storage, and transmission. Its Power & Sensor Systems segment offers gas sensors, MEMS microphones, and pressure sensors chips; discrete low-voltage, mid-voltage, and high-voltage power MOSFETs; control ICs; customized chips; GaN power switches; GPS low-noise amplifiers; low-voltage and high-voltage driver ICs; radar sensor ICs; RF antenna switches and power transistors; transient voltage suppressor diodes; and USB controllers for use in audio amplifiers, automotive electronics, BLDC motors, cellular communications infrastructure, electric vehicle charging stations, human machine interaction, Internet of Things, LED and conventional lighting systems, mobile devices, and power management applications. The company's Connected Secure Systems segment provides connectivity solutions, embedded security controllers, microcontrollers, and security controllers for authentication, automotive, consumer electronics, government identification document, Internet of Things, mobile communication, payment system, ticketing, access control, and trusted computing applications. Infineon Technologies AG was founded in 1999 and is headquartered in Munich, Germany.

How the Company Makes MoneyInfineon makes money primarily through the design, manufacturing, and sale of semiconductors and related products. The company generates revenue from several key business segments: Automotive, Industrial Power Control, Power & Sensor Systems, and Connected Secure Systems. The Automotive segment is a significant revenue driver, capitalizing on the growing demand for semiconductors in the electric and connected vehicle markets. Industrial Power Control focuses on power semiconductors used in energy-efficient industrial applications, including renewable energy systems. The Power & Sensor Systems segment provides products for power management and sensing solutions in consumer and industrial applications. Connected Secure Systems delivers security and connectivity solutions for smart card applications and embedded security. Infineon also benefits from strategic partnerships and collaborations with major tech firms and automotive companies, enhancing its market reach and technological capabilities.

Infineon Financial Statement Overview

Summary

Infineon's financial performance reflects strong profitability and a solid balance sheet, yet faces challenges in cash flow management. The company demonstrates healthy margins and a low-leverage position, offering stability in the semiconductor industry. However, declining free cash flow signals a need for improved operational efficiency and cost control to sustain long-term growth.

Income Statement

Positive

Infineon's TTM (Trailing-Twelve-Months) revenue shows a slight decline compared to the previous annual period, indicating a marginal drop in top-line growth. The gross profit margin is strong at approximately 39.6%, and the net profit margin is healthy at 6.5%. However, both EBIT and EBITDA margins have decreased, suggesting rising operational costs. Overall, the income statement reflects a solid profitability position, but with potential cost challenges.

Balance Sheet

Positive

The company's balance sheet is robust, with a debt-to-equity ratio of 0.29, indicating a conservative leverage position. The equity ratio stands at 61.3%, showcasing strong shareholder equity backing. Return on Equity (ROE) is modest at 5.3%, which suggests room for efficiency improvements. Overall, Infineon maintains a stable financial position with low leverage risk.

Cash Flow

Positive

Infineon's cash flow statement indicates a drop in free cash flow, with a growth rate of -30.8% compared to the previous year. The operating cash flow to net income ratio is strong, showing good cash conversion efficiency. However, the free cash flow to net income ratio is relatively low, indicating potential pressure on liquidity. Despite solid operational cash generation, the decrease in free cash flow warrants attention.

TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Breakdown
Income Statement		Total Revenue
14.68B	14.96B	16.31B	14.22B	11.06B	8.57B
	Gross Profit
5.81B	6.07B	7.41B	6.13B	4.26B	2.78B
	EBIT
1.85B	2.19B	3.95B	2.85B	1.47B	581.00M
	EBITDA
3.83B	4.18B	5.83B	4.53B	2.99B	1.81B
	Net Income Common Stockholders
960.00M	1.30B	3.14B	2.18B	1.17B	368.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.96B	2.20B	3.59B	3.72B	3.92B	3.23B
	Total Assets
29.73B	28.64B	28.44B	26.91B	23.33B	22.00B
	Total Debt
5.34B	5.17B	5.11B	6.05B	6.92B	7.33B
	Net Debt
4.08B	3.36B	3.29B	4.61B	5.17B	5.48B
	Total Liabilities
11.49B	11.42B	11.39B	11.97B	11.93B	11.78B
	Stockholders Equity
18.23B	17.22B	17.04B	14.94B	11.40B	10.22B
Cash Flow		Free Cash Flow
669.00M	61.00M	966.00M	1.67B	1.57B	712.00M
	Operating Cash Flow
3.47B	2.78B	3.96B	3.98B	3.06B	1.81B
	Investing Cash Flow
-2.44B	-2.17B	-2.26B	-2.44B	-2.28B	-7.17B
	Financing Cash Flow
-1.38B	-615.00M	-1.30B	-1.87B	-885.00M	6.27B

Infineon Technical Analysis

Technical Analysis Sentiment

Negative

Last Price29.20

Price Trends

50DMA

36.04

Negative

100DMA

34.67

Negative

200DMA

34.32

Negative

Market Momentum

MACD

-0.92

Positive

RSI

37.34

Neutral

STOCH

4.62

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IFNNY, the sentiment is Negative. The current price of 29.2 is below the 20-day moving average (MA) of 33.31, below the 50-day MA of 36.04, and below the 200-day MA of 34.32, indicating a bearish trend. The MACD of -0.92 indicates Positive momentum. The RSI at 37.34 is Neutral, neither overbought nor oversold. The STOCH value of 4.62 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IFNNY.

Infineon Peers Comparison

Overall Rating

UnderperformOutperform

Sector (57)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NXPI	69 Neutral	$42.00B	16.84	28.16%	2.40%	-4.99%	-9.18%
ON	68 Neutral	$14.80B	9.65	18.97%	―	-14.19%	-27.42%
MCHP	63 Neutral	$20.87B	68.44	4.71%	4.68%	-44.31%	-86.74%
STM	61 Neutral	$17.90B	12.34	9.12%	1.50%	-23.24%	-62.93%
MRVL	59 Neutral	$46.24B	―	-6.26%	0.45%	4.71%	5.57%
Sector *	57 Neutral	$19.95B	9.66	-12.05%	2.76%	5.40%	-24.89%
IFNNY	55 Neutral	$38.07B	37.90	8.74%	0.84%	-8.53%	-68.71%

* Technology Sector Average

Performance Comparison

IFNNY

Infineon

29.20

-4.96

-14.52%

MRVL

Marvell

53.39

-14.27

-21.09%

MCHP

Microchip

38.71

-44.91

-53.71%

NXPI

NXP Semiconductors

168.79

-57.34

-25.36%

ON Semiconductor

35.08

-30.56

-46.56%

STM

STMicroelectronics

20.45

-19.75

-49.13%

Infineon Earnings Call Summary

Earnings Call Date: Feb 4, 2025 | % Change Since: -8.86% | Next Earnings Date: May 8, 2025

Earnings Call Sentiment Neutral

Infineon delivered a better than expected Q1 performance, driven by strong results in AI power solutions and market leadership in silicon carbide. However, challenges remain with significant declines in industrial revenues and high inventory levels. The overall sentiment is cautiously optimistic, supported by targeted growth in key sectors.

Highlights

Slightly Better Than Expected Q1 Results

Revenue for Q1 amounted to EUR3.424 billion, exceeding expectations by about EUR200 million. This was partly due to a favorable exchange rate and slightly better volume development.

Strong Performance in AI Power Solutions

Infineon's AI-related revenues are on a strong trajectory, with an expected revenue of around EUR600 million this fiscal year and a target of crossing EUR1 billion in the next two years.

Silicon Carbide Market Leadership

Infineon was the fastest-growing major company in the silicon carbide market in 2024, achieving a market share of around 20% and securing significant design wins.

Lowlights

Significant Revenue Decline in Industrial Segment

Green Industrial Power (GIP) witnessed a 32% sequential contraction in revenue, impacted by weak market momentum and supply chain inventory reductions.

High Inventory Levels

Inventory reach increased to 190 days due to lower revenue and significant supply, which is considered too high and is targeted to be reduced by the end of the fiscal year.

Challenges in IoT and Security Markets

Ongoing weakness in consumer and IoT markets led to a 15% decline in Connected Secure Systems revenue, with modest recovery expected only in the second-half of 2025.

Company Guidance

During Infineon's first fiscal quarter of 2025, the company reported group revenues of EUR 3.424 billion, surpassing previous expectations by approximately EUR 200 million, partly due to currency advantages with the U.S. dollar exchange rate at $1.07 instead of the assumed $1.10. Despite a quarterly revenue decline of 13%, the segment result was EUR 573 million, reflecting a margin of 16.7%. The automotive division achieved revenues of EUR 1.919 billion with a segment result margin of 18.9%, while the Power & Sensor Systems (PSS) recorded revenues of EUR 820 million and a margin of 18.2%. Infineon anticipates a modest recovery in the second half of fiscal 2025, with full-year revenues expected to be flat or slightly up, aided by the stronger dollar. The company also highlighted its AI-related revenue target, expecting to achieve EUR 600 million in the current fiscal year, with a goal to surpass EUR 1 billion within the next two years.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.