Wells Fargo analyst Joe Quatrochi has increased the price target for NXP Semiconductors (NXPI, Financial) from $240 to $250, maintaining an Overweight rating on the stock. This decision follows the firm's extensive analysis comparing China with its Western competitors in the semiconductor market. Although China's participation in analog semiconductors continues to be a topic of debate, the growth in its semiconductor industry over the past decade is undeniable.
Wells Fargo's findings indicate a significant increase in China's semiconductor market share. Specifically, China's average semiconductor available market (SAM) share for Western chip suppliers rose to 10% in 2024, up from 3% in 2014 and 7% in 2020. Despite ex-memory semiconductors maintaining a 7%-8% share in recent years, China's role in the semiconductor landscape has become increasingly prominent.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 27 analysts, the average target price for NXP Semiconductors NV (NXPI, Financial) is $233.31 with a high estimate of $278.34 and a low estimate of $170.00. The average target implies an upside of 10.62% from the current price of $210.90. More detailed estimate data can be found on the NXP Semiconductors NV (NXPI) Forecast page.
Based on the consensus recommendation from 31 brokerage firms, NXP Semiconductors NV's (NXPI, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for NXP Semiconductors NV (NXPI, Financial) in one year is $200.97, suggesting a downside of 4.71% from the current price of $210.9. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the NXP Semiconductors NV (NXPI) Summary page.
NXPI Key Business Developments
Release Date: April 29, 2025
- Revenue: $2.84 billion, down 9% year on year.
- Non-GAAP Operating Margin: 31.9%, down 260 basis points year on year.
- Non-GAAP Gross Margin: 56.1%, down 210 basis points year on year.
- Non-GAAP Earnings Per Share: $2.64, $0.05 above the midpoint of guidance.
- Total Debt: $11.73 billion, up $871 million sequentially.
- Ending Cash Balance: $3.99 billion, up $696 million sequentially.
- Net Debt: $7.74 billion.
- Cash Flow from Operations: $565 million.
- Non-GAAP Free Cash Flow: $427 million or 15% of revenue.
- Days of Inventory: 169 days, an increase of 18 days sequentially.
- Q2 Revenue Guidance: $2.9 billion, down 7% year on year, up 2% sequentially.
- Q2 Non-GAAP Gross Margin Guidance: 56.3% plus or minus 50 basis points.
- Q2 Non-GAAP Operating Margin Guidance: 31.8% at the midpoint.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- NXP Semiconductors NV (NXPI, Financial) reported Q1 revenue of $2.84 billion, slightly above the midpoint of their guidance.
- The company achieved a non-GAAP operating margin of 31.9%, which was 40 basis points above the midpoint of their guidance.
- NXP's acquisition of Kinara is expected to enhance their AI capabilities, particularly in the industrial and IoT markets.
- The company is seeing positive trends such as improving distribution customer backlog levels and stabilized order signals from direct customers.
- NXP's strategic focus on China-for-China manufacturing is seen as a positive move to mitigate tariff impacts and leverage local market opportunities.
Negative Points
- Q1 revenue was down 9% year on year, indicating a challenging market environment.
- The automotive and industrial and IoT markets performed slightly below expectations in Q1.
- NXP is operating in an uncertain environment influenced by tariffs, with unknown indirect impacts on future demand and supply chain.
- The company's non-GAAP gross margin of 56.1% was 20 basis points below the midpoint of their guidance range due to product and channel mix.
- NXP's days of inventory increased to 169 days, which is considered high and may impact future gross margins.
