NXP Semiconductors (NXPI) AI Stock Analysis

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NXP Semiconductors

(NASDAQ:NXPI)

Rating:77Outperform

Price Target:

$226.00

▲(3.33%Upside)

NXP Semiconductors has a strong financial foundation with effective cost management and cash flow generation, despite slight revenue declines and high debt levels. Technical indicators are moderately positive, but valuation suggests balanced risk. Earnings call reveals strategic moves amidst macro challenges, indicating cautious optimism.

Positive Factors

Business Model

NXP offers a highly favorable combination of a resilient business model, growing capital returns, and long-term auto/industrial secular growth.

Cyclical Recovery

Multiple signs point to cyclical improvement absent tariffs.

Valuation

The company's valuation seems compelling for a cyclical company likely at bottom-of-cycle and is 32%/10% below peer group average.

Negative Factors

CEO Retirement

The surprising announcement that CEO Kurt Sievers will retire at the end of 2025 likely weighed on shares given he was well regarded by investors.

Demand Uncertainty

Lingering inventory digestion plus a highly uncertain demand backdrop make 2H visibility extremely cloudy.

Tariff Impacts

Potential indirect impacts from tariffs if end demand materially weakens pose a risk.

NXP Semiconductors (NXPI) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$52.47B

Dividend Yield1.9%

Average Volume (3M)2.94M

Price to Earnings (P/E)22.4

Beta (1Y)1.57

Revenue Growth-7.21%

EPS Growth-15.29%

CountryUS

Employees33,100

SectorTechnology

Sector Strength84

IndustrySemiconductors

Share Statistics

EPS (TTM)2.64

Shares Outstanding252,628,700

10 Day Avg. Volume2,504,240

30 Day Avg. Volume2,944,755

Financial Highlights & Ratios

PEG Ratio-4.02

Price to Book (P/B)5.80

Price to Sales (P/S)0.00

P/FCF Ratio28.70

Enterprise Value/Market Cap1.17

Enterprise Value/Revenue1.21

Enterprise Value/Gross Profit9.01

Enterprise Value/Ebitda3.48

Forecast

1Y Price Target

$227.10

Price Target Upside3.83% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering19

NXP Semiconductors Business Overview & Revenue Model

Company DescriptionNXP Semiconductors N.V. (NXPI) is a global semiconductor company headquartered in Eindhoven, Netherlands. It is a leading provider of high-performance mixed-signal and standard product solutions with a focus on automotive, industrial & IoT, mobile, and communication infrastructure markets. NXP's core products include microcontrollers, application processors, connectivity solutions, analog products, radio frequency (RF) power amplifiers, and security controllers. The company leverages its expertise in security, connectivity, and processing to deliver solutions that enable secure connections for a smarter world.

How the Company Makes MoneyNXP Semiconductors generates revenue primarily through the sale of semiconductor products and solutions across various industries. The company's revenue model is based on the design, manufacturing, and marketing of its semiconductor products. Key revenue streams include automotive applications, where NXP provides products for advanced driver assistance systems (ADAS), vehicle networking, and secure car access. In the industrial & IoT sector, NXP offers solutions for smart home devices, industrial automation, and connected devices. The mobile sector contributes to revenue through products for smartphones, wearables, and mobile payment solutions. Additionally, NXP partners with major technology companies and automotive manufacturers, which enhances its product offerings and market reach. The company's ability to innovate and adapt to emerging technologies like 5G and automated driving further supports its revenue generation.

NXP Semiconductors Key Performance Indicators (KPIs)

Any

Revenue by Sales Channel

Revenue by Sales Channel
Analyzes revenue from various sales channels, such as direct sales or distributors, highlighting the company's strategic focus and effectiveness in reaching its customers.

Chart InsightsNXP Semiconductors' revenue from distributors shows a recent downturn after a peak in late 2023, reflecting broader market challenges. OEMs and EMS channels have stabilized but remain below their 2022 highs. The earnings call highlights macroeconomic pressures and a strategic acquisition of Kinara, aimed at bolstering AI capabilities. Despite a year-on-year revenue decline, management sees early signs of recovery with improving backlog levels. The guidance for Q2 2025 suggests slight sequential growth, indicating cautious optimism amid ongoing volatility.

Data provided by:

Main Street Data

NXP Semiconductors Earnings Call Summary

Earnings Call Date:Apr 28, 2025

(Q1-2025)

% Change Since: 11.46%|

Next Earnings Date:Jul 21, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted some positive developments, such as better-than-expected revenue and a strategic acquisition, but these were tempered by significant challenges including a year-on-year revenue decline and macroeconomic uncertainties. The guidance for Q2 indicates a slight sequential improvement, yet the macro environment remains volatile.

Q1-2025 Updates

Positive Updates

Revenue Exceeds Midpoint of Guidance

NXP's Q1 revenue was $10 million better than the midpoint of guidance, totaling $2.84 billion.

Guidance for Q2 Shows Sequential Growth

Q2 revenue is guided to $2.9 billion, up 2% sequentially, despite a 7% year-on-year decline.

Strategic Acquisition of Kinara

NXP announced the acquisition of Kinara for $307 million to enhance its AI-powered edge-based systems, expected to be accretive by 2028.

Non-GAAP Earnings Beat

Non-GAAP earnings per share for Q1 was $2.64, $0.05 better than midpoint guidance.

CEO Transition Plan

CEO Kurt Sievers announced his retirement plan, with Rafael promoted to President and taking over as CEO in October 2025.

Negative Updates

Year-on-Year Revenue Decline

Q1 revenue decreased by 9% year-on-year, with automotive and industrial and IoT markets performing below expectations.

Non-GAAP Operating Margin Decline

Non-GAAP operating margin decreased by 260 basis points year-on-year to 31.9%.

Inventory Levels Above Target

Distribution inventory stood at 9 weeks, below the long-term target of 11 weeks, but overall inventory days increased to 169.

Macroeconomic Uncertainty

NXP faces uncertainty due to tariffs and their indirect impact, with no clear trends in customer order pull-ins or push-outs.

Company Guidance

During NXP Semiconductor's Q1 2025 earnings call, the company provided guidance for Q2 2025, projecting revenue at $2.9 billion, which represents a 7% year-over-year decline but a 2% sequential increase. Specific expectations include automotive revenue to remain flat compared to Q2 2024 and grow in the low single-digits versus Q1 2025. Industrial and IoT revenue is anticipated to drop in the mid-teens year-over-year and rise in the mid-single-digits sequentially. Meanwhile, mobile revenue is expected to decline in the mid-single-digits both year-over-year and sequentially, and communication infrastructure and other revenues are projected to decrease in the high 20% range year-over-year and remain flat sequentially. Operating expenses for Q2 are forecasted to be around $710 million, and the non-GAAP operating margin is expected at 31.8%. Despite uncertainties, including potential indirect effects of tariffs, NXP sees early signs of cycle recovery with improving customer backlog levels and stabilized order signals.

NXP Semiconductors Financial Statement Overview

Summary

NXP Semiconductors shows strong financial health with solid profitability margins and a balanced capital structure. While there's a slight revenue decline, efficient cost management and healthy cash flow generation provide stability. However, significant debt levels require careful management.

Income Statement

Very Positive

The income statement reflects a strong financial performance with a consistent revenue stream. The TTM (Trailing-Twelve-Months) gross profit margin stands at 55.46%, indicating efficient cost management. However, there is a slight decrease in revenue, with a 2.30% drop compared to the previous year. The EBIT margin is solid at 26.63%, and the EBITDA margin is healthy at 30.75%, suggesting good operational efficiency. Despite the small decline in revenue, the company maintains strong profitability metrics.

Balance Sheet

Positive

The balance sheet shows a stable financial position with a debt-to-equity ratio of 1.21, indicating a moderate level of leverage. The equity ratio is 38.42%, reflecting a balanced capital structure. Return on equity (ROE) is robust at 24.4%, demonstrating effective management of shareholder funds. However, the total debt level is significant at $11.725 billion, which could pose a risk if not managed carefully.

Cash Flow

Very Positive

Cash flow analysis reveals a strong free cash flow generation with a TTM free cash flow of approximately $2.04 billion. The operating cash flow to net income ratio is 1.05, indicating efficient conversion of income to cash. The free cash flow to net income ratio stands at 0.86, showcasing strong cash flow management. Despite a decrease in operating cash flow compared to the previous year, the company's cash position remains healthy.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
12.32B	12.61B	13.28B	13.21B	11.06B	8.61B
	Gross Profit
6.83B	7.12B	7.55B	7.52B	6.07B	4.24B
	EBIT
3.28B	3.42B	3.66B	3.80B	2.58B	418.00M
	EBITDA
4.01B	4.42B	4.90B	5.04B	3.81B	2.35B
	Net Income Common Stockholders
2.36B	2.51B	2.80B	2.79B	1.87B	84.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
4.27B	3.29B	4.27B	3.85B	2.83B	2.27B
	Total Assets
24.35B	24.39B	24.35B	23.24B	20.86B	19.85B
	Total Debt
11.18B	10.85B	11.18B	11.16B	10.57B	7.61B
	Net Debt
7.31B	7.56B	7.53B	7.32B	7.74B	5.33B
	Total Liabilities
15.39B	14.85B	15.39B	15.50B	14.09B	10.70B
	Stockholders Equity
8.64B	9.18B	8.64B	7.45B	6.53B	8.94B
Cash Flow		Free Cash Flow
1.88B	1.91B	2.51B	2.67B	2.15B	1.96B
	Operating Cash Flow
2.49B	2.78B	3.51B	3.90B	3.08B	2.48B
	Investing Cash Flow
-625.95M	-686.00M	-1.51B	-1.25B	-934.00M	-418.00M
	Financing Cash Flow
-780.63M	-2.66B	-1.99B	-1.62B	-1.58B	-835.00M

NXP Semiconductors Technical Analysis

Technical Analysis Sentiment

Positive

Last Price218.72

Price Trends

50DMA

190.11

Positive

100DMA

201.82

Positive

200DMA

214.25

Positive

Market Momentum

MACD

4.69

Negative

RSI

65.15

Neutral

STOCH

87.63

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NXPI, the sentiment is Positive. The current price of 218.72 is above the 20-day moving average (MA) of 204.59, above the 50-day MA of 190.11, and above the 200-day MA of 214.25, indicating a bullish trend. The MACD of 4.69 indicates Negative momentum. The RSI at 65.15 is Neutral, neither overbought nor oversold. The STOCH value of 87.63 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NXPI.

NXP Semiconductors Risk Analysis

NXP Semiconductors disclosed 41 risk factors in its most recent earnings report. NXP Semiconductors 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 2 New Risks

We may engage in acquisitions and other strategic transactions or make investments, or be unable to consummate planned strategic acquisitions, which could adversely affect our results of operations. Q4, 2024

We rely on joint ventures to meet our current and future manufacturing requirements. However, we often do not control these partnerships and joint ventures, and actions taken by any of our partners or the termination of these joint ventures could adversely affect our business. Q4, 2024

NXP Semiconductors Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NXPI	77 Outperform	$52.47B	22.39	26.02%	1.90%	-7.21%	-15.29%
SWKS	74 Outperform	$10.75B	27.96	6.70%	3.83%	-12.90%	-51.90%
STM	71 Outperform	$25.61B	24.24	6.33%	1.03%	-25.35%	-70.00%
ON	65 Neutral	$20.97B	36.33	7.85%	―	-18.28%	-70.98%
MRVL	64 Neutral	$58.93B	―	-3.54%	0.35%	21.60%	50.00%
MCHP	64 Neutral	$35.20B	84.25	>-0.01%	2.79%	-42.35%	-100.12%
Sector *	62 Neutral	$11.80B	10.31	-7.45%	2.91%	7.43%	-7.78%

* Technology Sector Average

Performance Comparison

NXPI

NXP Semiconductors

218.72

-54.40

-19.92%

MRVL

Marvell

68.84

-1.33

-1.90%

MCHP

Microchip

69.59

-21.40

-23.52%

ON Semiconductor

53.80

-20.18

-27.28%

SWKS

Skyworks Solutions

74.95

-17.95

-19.32%

STM

STMicroelectronics

30.40

-12.95

-29.87%

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.