NXP Semiconductors (NXPI) AI Stock Analysis

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NXP Semiconductors

(NASDAQ:NXPI)

73Outperform

NXP Semiconductors is evaluated at a score of 73.3, reflecting strong financial performance and reasonable valuation, despite mixed technical indicators and challenges noted in the earnings call. The company's robust profitability and strategic moves, like the acquisition of Kinara, are positive, though attention to debt management and market conditions remains crucial. Technical analysis suggests caution due to longer-term bearish trends.

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.

Capital Returns

Analyst remains constructive on the stock given resilient capital returns at a discount valuation.

Demand and Orders

There are signs of improving demand with an increasing backlog, stabilization in orders, and spot product shortages.

Negative Factors

Demand Visibility

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

Leadership

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.

Tariff Uncertainty

Tariff uncertainty creates limited visibility for the second half of 2025, impacting investor confidence.

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

Market Cap

$53.14B

Dividend Yield1.93%

Average Volume (3M)3.64M

Price to Earnings (P/E)22.7

Beta (1Y)1.53

Revenue Growth-7.21%

EPS Growth-15.29%

CountryUS

Employees33,100

SectorTechnology

Sector Strength77

IndustrySemiconductors

Share Statistics

EPS (TTM)2.64

Shares Outstanding252,628,700

10 Day Avg. Volume2,631,080

30 Day Avg. Volume3,636,751

Financial Highlights & Ratios

PEG Ratio-3.62

Price to Book (P/B)5.22

Price to Sales (P/S)0.00

P/FCF Ratio25.85

Enterprise Value/Market Cap1.06

Enterprise Value/Revenue1.10

Enterprise Value/Gross Profit8.22

Enterprise Value/Ebitda3.18

Forecast

1Y Price Target

$225.83

Price Target Upside7.50% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering19

NXP Semiconductors Business Overview & Revenue Model

Company DescriptionNXP Semiconductors N.V. offers various semiconductor products. The company's product portfolio includes microcontrollers; application processors, including i.MX application processors, and i.MX 8 and 9 family of applications processors; communication processors; wireless connectivity solutions, such as near field communications, ultra-wideband, Bluetooth low-energy, Zigbee, and Wi-Fi and Wi-Fi/Bluetooth integrated SoCs; analog and interface devices; radio frequency power amplifiers; and security controllers, as well as semiconductor-based environmental and inertial sensors, including pressure, inertial, magnetic, and gyroscopic sensors. The company's product solutions are used in a range of applications, including automotive, industrial and Internet of Things, mobile, and communication infrastructure. The company markets its products to various original equipment manufacturers, contract manufacturers, and distributors. It operates in China, the Netherlands, the United States, Singapore, Germany, Japan, South Korea, Malaysia, and internationally. The company was formerly known as KASLION Acquisition B.V and changed its name to NXP Semiconductors N.V. in May 2010. NXP Semiconductors N.V. was incorporated in 2006 and is headquartered in Eindhoven, the Netherlands.

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
Examines revenue generated through various sales channels, offering insight into distribution strategy effectiveness and market reach.

Chart InsightsNXP Semiconductors has experienced fluctuating revenue trends across its sales channels. Distributor sales have shown resilience, recovering from a dip in early 2023 to reach new highs by the end of the year. However, revenue from OEMs and EMS has been more volatile, with recent declines. The latest earnings call highlights challenges, including a projected revenue decline in Q1 2025 and poor market visibility, particularly affecting the automotive and communication infrastructure segments. Strategic acquisitions aim to bolster long-term growth, but near-term uncertainties persist.

Data provided by:

Main Street Data

NXP Semiconductors Financial Statement Overview

Summary

NXP Semiconductors demonstrates solid financial health across its income statement, balance sheet, and cash flow metrics. The company maintains strong profitability margins and a balanced capital structure. While there is a slight decline in revenue, the company's efficient cost management and strong cash flow generation provide a stable foundation for future growth. However, attention should be paid to the management of debt levels to mitigate potential risks.

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
3.31B	3.29B	4.27B	3.85B	2.83B	2.27B
	Total Assets
23.32B	24.39B	24.35B	23.24B	20.86B	19.85B
	Total Debt
10.18B	10.85B	11.18B	11.16B	10.57B	7.61B
	Net Debt
7.27B	7.56B	7.53B	7.32B	7.74B	5.33B
	Total Liabilities
14.17B	14.85B	15.39B	15.50B	14.09B	10.70B
	Stockholders Equity
8.83B	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 Price210.08

Price Trends

50DMA

190.77

Positive

100DMA

202.91

Positive

200DMA

217.06

Negative

Market Momentum

MACD

6.94

Negative

RSI

62.78

Neutral

STOCH

91.64

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 210.08 is above the 20-day moving average (MA) of 195.52, above the 50-day MA of 190.77, and below the 200-day MA of 217.06, indicating a neutral trend. The MACD of 6.94 indicates Negative momentum. The RSI at 62.78 is Neutral, neither overbought nor oversold. The STOCH value of 91.64 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 0 New Risks

NXP Semiconductors Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NXPI	73 Outperform	$53.14B	22.68	26.02%	1.93%	-7.21%	-15.29%
SWKS	71 Outperform	$10.95B	28.48	6.70%	3.81%	-12.90%	-51.90%
STM	70 Outperform	$23.11B	22.01	6.33%	1.18%	-25.35%	-70.00%
MRVL	69 Neutral	$54.04B	―	-6.26%	0.38%	4.71%	5.57%
MCHP	66 Neutral	$32.58B	84.25	>-0.01%	3.00%	-44.31%	-86.74%
ON	65 Neutral	$18.32B	30.41	7.85%	―	-18.28%	-70.98%
Sector *	60 Neutral	$11.59B	10.34	-7.15%	2.94%	7.49%	-10.88%

* Technology Sector Average

Performance Comparison

NXPI

NXP Semiconductors

210.08

-63.93

-23.33%

MRVL

Marvell

61.42

-12.02

-16.37%

MCHP

Microchip

60.80

-36.74

-37.67%

ON Semiconductor

44.26

-32.03

-41.98%

SWKS

Skyworks Solutions

73.28

-17.85

-19.59%

STM

STMicroelectronics

25.87

-15.95

-38.14%

NXP Semiconductors Earnings Call Summary

Earnings Call Date:Apr 28, 2025

(Q1-2025)

% Change Since: 7.05%|

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.

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.