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MagnaChip Semiconductor (MX)
:MX

MagnaChip (MX) AI Stock Analysis

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MagnaChip

(NYSE:MX)

Rating:54Neutral
Price Target:
$4.00
▼(-2.68%Downside)
MagnaChip's stock score reflects significant financial challenges, including declining revenues and negative profitability, partially offset by strategic initiatives and a stable equity position. Technical analysis shows some potential for price stability, though valuation remains a concern due to negative earnings. The earnings call reveals both growth opportunities and significant operational challenges.
Positive Factors
Financial Performance
Magnachip reported a solid quarter with operating expenses coming in much lower than expected.
Market Expansion
Management is guiding to 5% sequential growth as consumer markets improve and new design wins are made in industrial sectors.
Negative Factors
Business Transition
The company will exit the Display business by 2Q25, and while this is seen as an opportunity, the transition could bring uncertainties.
Revenue and Margin Targets
Revenue and margin targets are considered aggressive, posing a risk if new TAM-expanding products are not quickly adopted.

MagnaChip (MX) vs. SPDR S&P 500 ETF (SPY)

MagnaChip Business Overview & Revenue Model

Company DescriptionMagnaChip Semiconductor Corporation (MX) is a South Korea-based company specializing in the design and manufacture of analog and mixed-signal semiconductor products. The company operates primarily in two segments: the Foundry Services Group and the Standard Products Group. MagnaChip provides a wide array of products, including display drivers, power management integrated circuits (PMICs), and sensors, catering to various sectors such as consumer electronics, communications, and industrial applications.
How the Company Makes MoneyMagnaChip generates revenue through its two main business segments. The Foundry Services Group offers semiconductor manufacturing services to fabless companies, generating income by providing production capacity and expertise in chip fabrication. The Standard Products Group is responsible for designing and selling proprietary semiconductor products, such as display drivers and power management ICs, to original equipment manufacturers (OEMs) and other customers. Key revenue streams include product sales, contract manufacturing services, and technology licensing. Strategic partnerships with leading technology firms and collaborations in research and development also play a significant role in enhancing MagnaChip's market position and revenue potential.

MagnaChip Earnings Call Summary

Earnings Call Date:May 12, 2025
(Q1-2025)
|
% Change Since: 23.05%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed sentiment with significant growth in continuing operations and strategic product launches overshadowed by the challenges of shutting down the display business and sequential declines in revenue and gross margin.
Q1-2025 Updates
Positive Updates
Revenue Growth in Continuing Operations
Consolidated Q1 revenue from continuing operations was $44.7 million, up 12.1% year over year, marking the fourth consecutive quarter of year-over-year growth.
Power IC Business Performance
Revenue from the Power IC segment was $4.9 million, an increase of 44.1% year over year.
New Product Launches and Market Penetration
27 new generation power analog solution products were released in Q1, with significant design wins across multiple markets, including automotive and industrial applications.
Gross Profit Margin Improvement
Consolidated Q1 gross profit margin from continuing operations was 20.9%, up 3.3 percentage points year-over-year.
Negative Updates
Display Business Shutdown
The company announced the shutdown of its display business by the end of Q2, with related liquidation costs expected to be $12 million to $15 million.
Sequential Revenue Decline
Q1 revenue of $44.7 million was down 8.5% sequentially, reflecting a seasonal decline.
Gross Margin Sequential Decline
Sequential decline in gross profit margin from 23.2% to 20.9% due to an unfavorable product mix.
Operating Loss
Q1 operating loss was $6.3 million, though reduced compared to previous quarters.
Company Guidance
During the first quarter 2025 earnings call, Magnachip Semiconductor provided guidance for the second quarter and full year 2025. The company expects consolidated revenue from continuing operations to be between $45 million and $49 million for Q2, indicating a 5.2% sequential increase and a 6.6% year-over-year increase at the midpoint. The gross profit margin for Q2 is projected to be between 19.5% and 21.5%. For the full year 2025, Magnachip reiterated expectations for mid to high single-digit revenue growth from continuing operations, which excludes the now-discontinued display business. The company aims to achieve a quarterly adjusted EBITDA breakeven by the end of the year, supported by a 30% to 35% reduction in annualized operating expenses compared to 2024. Magnachip outlined a strategic focus on its Power Analog Solutions and Power IC businesses, with a long-term goal of reaching a $300 million annual revenue run rate and a 30% gross profit margin within three years, as part of its "three-three-three" strategy.

MagnaChip Financial Statement Overview

Summary
MagnaChip faces significant financial hurdles with declining revenues, negative profitability margins, and cash flow challenges. Despite maintaining a strong equity position and low leverage, sustained losses and negative cash flows present risks to long-term viability.
Income Statement
35
Negative
MagnaChip's income statement highlights significant challenges in profitability. The gross profit margin for TTM is approximately 23.19%, indicating some ability to cover production costs, but the net profit margin is negative, reflecting ongoing losses. Revenue has decreased significantly from 2020 to 2025, with a noticeable drop in 2022 and a continued decline into 2025, signaling potential difficulties in market competitiveness or demand. EBIT and EBITDA margins are also negative, pointing to operational inefficiencies and high fixed costs relative to revenue.
Balance Sheet
60
Neutral
The balance sheet presents a mixed financial position. The debt-to-equity ratio is low, suggesting manageable levels of debt relative to equity, which is positive for financial stability. However, the return on equity (ROE) is negative due to net losses, indicating poor returns for shareholders. The equity ratio remains strong at around 72%, showing a solid equity base compared to total assets, which provides a cushion against liabilities.
Cash Flow
40
Negative
Cash flow analysis reveals constraints with negative operating cash flow in TTM, reflecting cash burn from operations. Free cash flow has been consistently negative, highlighting the need for external financing or operational improvements. The operating cash flow to net income ratio is negative, indicating insufficient cash generation to cover net losses. The free cash flow to net income ratio further underscores cash flow challenges, suggesting reliance on financing activities.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue227.92M231.74M230.05M337.66M474.23M507.06M
Gross Profit52.84M51.91M51.64M101.26M153.54M128.32M
EBITDA-37.49M-44.51M-30.05M13.28M89.58M40.16M
Net Income-47.77M-54.31M-36.62M-8.04M56.71M57.06M
Balance Sheet
Total Assets551.41M379.32M420.49M516.64M583.65M571.69M
Cash, Cash Equivalents and Short-Term Investments290.19M138.61M158.09M225.48M279.55M279.94M
Total Debt4.59M30.43M4.81M5.49M4.28M88.11M
Total Liabilities131.06M102.52M75.89M88.49M130.89M226.09M
Stockholders Equity420.35M276.80M344.60M428.15M452.76M345.60M
Cash Flow
Free Cash Flow-18.07M-17.73M-10.23M-18.62M54.92M-29.37M
Operating Cash Flow-6.75M-6.13M-3.01M5.17M87.74M7.47M
Investing Cash Flow-10.36M-11.67M-7.66M-24.93M-31.44M318.48M
Financing Cash Flow-10.14M16.56M-52.34M-12.74M-35.54M-222.28M

MagnaChip Technical Analysis

Technical Analysis Sentiment
Positive
Last Price4.11
Price Trends
50DMA
3.66
Positive
100DMA
3.76
Positive
200DMA
4.02
Positive
Market Momentum
MACD
0.11
Negative
RSI
62.25
Neutral
STOCH
78.57
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MX, the sentiment is Positive. The current price of 4.11 is above the 20-day moving average (MA) of 3.91, above the 50-day MA of 3.66, and above the 200-day MA of 4.02, indicating a bullish trend. The MACD of 0.11 indicates Negative momentum. The RSI at 62.25 is Neutral, neither overbought nor oversold. The STOCH value of 78.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MX.

MagnaChip Risk Analysis

MagnaChip disclosed 46 risk factors in its most recent earnings report. MagnaChip reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

MagnaChip Peers Comparison

Overall Rating
UnderperformOutperform
Sector (69)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
72
Outperform
$89.20M25.19-0.10%5.19%-101.31%
71
Outperform
$153.68M176.22-0.31%-22.48%-102.37%
69
Neutral
¥228.59B14.337.64%2.71%9.13%8.49%
56
Neutral
$98.18M-24.87%-20.12%-660.05%
MXMX
54
Neutral
$148.22M-14.88%3.59%-64.21%
53
Neutral
$98.67M-33.15%-5.73%47.83%
48
Neutral
$155.67M-90.30%-78.70%13.98%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
MX
MagnaChip
4.11
-0.87
-17.47%
GSIT
GSI Technology
3.54
0.84
31.11%
INTT
inTEST
7.14
-3.37
-32.06%
QUIK
QuickLogic
6.20
-4.57
-42.43%
ATOM
Atomera
5.07
1.08
27.07%
MRAM
Everspin Technologies
6.84
0.57
9.09%

MagnaChip Corporate Events

Executive/Board ChangesShareholder Meetings
MagnaChip Concludes 2025 Annual Stockholders Meeting
Neutral
Jun 26, 2025

MagnaChip held its 2025 Annual Meeting of Stockholders on June 23, 2025, where 79.21% of the outstanding shares were represented. During the meeting, stockholders elected five directors, approved executive compensation, and ratified the appointment of Ernst & Young Han Young as the independent registered public accounting firm for the fiscal year ending December 31, 2025.

The most recent analyst rating on (MX) stock is a Buy with a $7.00 price target. To see the full list of analyst forecasts on MagnaChip stock, see the MX Stock Forecast page.

Executive/Board Changes
Magnachip Announces Departure of Chief Compliance Officer
Neutral
May 23, 2025

On May 21, 2025, Magnachip Semiconductor Corporation announced the upcoming departure of Theodore S. Kim, its Chief Compliance Officer, General Counsel, and Secretary, effective October 22, 2025. The separation is amicable and not due to any disagreements, with the company expressing gratitude for Mr. Kim’s 11 years of service, during which he significantly contributed to enhancing legal, compliance, and risk management functions.

The most recent analyst rating on (MX) stock is a Buy with a $8.00 price target. To see the full list of analyst forecasts on MagnaChip stock, see the MX Stock Forecast page.

Executive/Board ChangesBusiness Operations and Strategy
MagnaChip Executives Agree to Salary Reductions
Neutral
Apr 30, 2025

On April 28, 2025, MagnaChip announced adjustments to the compensation of its top executives. CEO Young-Joon Kim agreed to a 20% salary reduction, while CFO Shin Young Park’s salary was reduced by 10%, both effective April 1, 2025. These reductions will remain until the company’s operating income is positive for two consecutive fiscal quarters. Additionally, Park’s amended service agreement includes a salary increase and provisions for severance in the event of a change in control.

Business Operations and Strategy
Magnachip Announces Shutdown of Display Business
Neutral
Apr 8, 2025

On April 8, 2025, Magnachip announced the shutdown of its Display business by the end of the second quarter of 2025, following a thorough review and unsuccessful attempts to sell the business. This strategic move aims to focus on the more profitable Power discrete and Power IC segments, with an expected reduction in annualized operating expenditures by 30% to 35%. The company is targeting a $300 million annual revenue run-rate with a 30% gross profit margin within three years, enhancing shareholder value.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jun 10, 2025