Reasonable Price-to-Earnings Ratio
Strong Price-to-Sales Ratio
Strong Return on Equity
Healthy Profit Margins
Strong Liquidity Position
Good Interest Coverage
🏆 Strong Market Position
🚀 Strategic Acquisitions
🌍 Global Market Expansion
🔧 Focus on Innovation
High Price-to-Cash Flow Ratio
Elevated Price-to-Book Ratio
Potential Concerns in Cash Flow Generation
Moderate Debt Levels
📉 Revenue Decline
🌥️ Limited Visibility
⚠️ Declining Market Segments
📊 Price Erosion
NXP Semiconductor demonstrates a robust business model with strong market positioning and strategic acquisitions that enhance its competitive edge. However, revenue declines in certain segments and challenges with visibility and price erosion could hinder growth prospects in the near term. The focus on innovation and expansion in key markets presents potential for future growth.
Analysis Date: February 4, 2025
Last Updated: March 12, 2025
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$379.93
Current Market Price: $160.35
IV/P Ratio: 2.37x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
57.99999999999999%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for NXPI
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (16.30)
P/B ratio ≤ 1.5 (4.29)
Current ratio ≥ 2.0 (2.36x)
Long-term debt < Net current assets (2.46x)
Margin of safety (57.99999999999999%)
NXPI does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
NXPI boasts a Return on Equity (ROE) of 27.29%, demonstrating efficient use of shareholder equity to generate profits, which is significantly above the industry average.
With a net profit margin of 19.90% and an operating profit margin of 27.07%, NXPI shows excellent profitability, indicating strong cost management and pricing power.
Despite healthy profit margins, the relatively high Price-to-Free Cash Flow ratio could suggest that cash flow generation is not keeping pace with profit growth, which could be a red flag.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
27.29%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-16)
Return on Assets (ROA)
Measures how efficiently a company uses its assets to generate profits
2.03%
Higher values indicate better asset utilization
TTM (as of 2025-04-16)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
55.53%
Higher values indicate better efficiency in production
TTM (as of 2025-04-16)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
19.90%
Higher values indicate better overall profitability
TTM (as of 2025-04-16)
The current ratio of 2.36 indicates that NXPI has more than enough current assets to cover its current liabilities, which is a positive indicator of short-term financial health.
An interest coverage ratio of 8.58 signifies that NXPI can comfortably meet its interest obligations, indicating good financial stability.
A debt-to-equity ratio of 1.14 and a debt-to-assets ratio of 0.45 indicate that NXPI has a moderate level of debt, which could pose risks in economic downturns.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
1.10x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
2.36x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
NXP maintains a strong position in the automotive semiconductor market, evidenced by full-year automotive revenue of $7.15 billion, despite a 4% decline year-on-year. The company is recognized for its accelerated growth drivers in software-defined vehicles, automotive connectivity, and electrification.
Recent acquisitions of Aviva Links and TT Tech Auto position NXP to expand its offerings in automotive connectivity and software-defined vehicle platforms. These acquisitions are expected to enhance long-term competitive advantages by integrating innovative technologies.
NXP's revenue has seen a decline, with a 5% decrease year-on-year for 2024 and a 9% decline in Q4. The company is facing challenges in communication infrastructure and industrial IoT segments, which have affected overall performance.
The company has expressed concerns regarding poor visibility in demand trends, particularly in automotive and industrial sectors, making it difficult to predict future performance accurately.
NXP is capitalizing on growth opportunities in Asia, particularly in China, where it has seen a 4% revenue increase year-over-year. The company is adapting its strategy to support local OEMs and enhance product offerings.
NXP's CoreRide platform and recent technology acquisitions indicate a strong commitment to innovation in the software-defined vehicle market, which is expected to drive future growth.
The communication infrastructure and industrial IoT segments are experiencing significant declines, with expectations for a mid-20% drop in revenue for Q1 2025 compared to Q1 2024. This may hinder overall growth potential.
The company expects low single-digit price erosion across its product lines, which may affect gross margins and overall profitability in the near term.