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1. Company Snapshot

1.a. Company Description

NXP 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.

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1.b. Last Insights on NXPI

NXP Semiconductors' recent momentum is driven by stabilizing auto demand and strong Industrial, IoT, and mobile growth. The company's Q4 earnings and revenues surpassed estimates, with a 5% EPS rise and 7% revenue climb. Key metrics, such as Automotive, Industrial & IoT, and Mobile, are driving growth. Institutional investors, like Deprince Race and Zollo Inc. and Dynasty Wealth Management LLC, have increased their stakes in the company.

1.c. Company Highlights

2. NXP Semiconductors' Q4 Results Exceed Guidance, Auto Business Returns to Growth

NXP Semiconductors reported fourth-quarter revenue of $3.34 billion, a 7% year-on-year increase and 5% sequential growth, beating the midpoint of guidance by $35 million. Non-GAAP operating margin was 35%, and earnings per share was $3.35, $0.07 better than guidance. The actual EPS came out at $3.35 relative to estimates at $3.31. For the full year 2025, the automotive revenue was $7.1 billion, flat year-on-year. The company's guidance for the first quarter is revenue of $3.15 billion, up 11% year-on-year and down 6% sequentially.

Publication Date: Feb -04

📋 Highlights
  • Q4 Revenue Growth:: Revenue hit $3.34B, up 7% YoY and 5% sequentially, exceeding guidance by $35M.
  • Q1 Guidance:: Revenue guided to $3.15B, +11% YoY but -6% sequentially, with non-GAAP EPS at $2.97 midpoint.
  • Shareholder Returns:: $592M returned in Q4 via buybacks/dividends, totaling $23B in 10 years.
  • 2027 Auto Revenue Target:: $9.5B expected, driven by 8–12% growth (excluding $300M sensor divestment impact).

Segment Performance

The auto business saw inventory digestion largely behind them, with Q4 finishing within 1% of its prior peak in 2023. The guide for Q1 includes only one month of the sensor business. Regionally, there's not a whole lot of difference, with China having a normal seasonality weight. The shift to SDVs and advanced ADAS is expected to drive constant growth. In the Industrial and IoT segment, growth is broad-based, with 60% of the business in core industrial and 40% in consumer.

Gross Margin and Operating Expenses

Gross margins are performing to expectations, with low single-digit price concessions and offset by operational efficiencies. Utilization rates in Q1 will remain in the high 70s, with prebuilds at the end of 2025 at 7 days and expected to be 15-20 days by the end of 2026. The company expects gross margins to improve over the long-term, with a 200 basis point lift expected by 2028. Operating margins are expected to improve in the second half of the year.

Valuation and Growth Prospects

Given the current valuation metrics, with a P/E Ratio of 27.57 and EV/EBITDA of 16.27, the market seems to have priced in a certain level of growth. The company's long-term operating model guides for 6% to 10% revenue growth, with a revenue target of $15.8 billion in fiscal year '27. Analysts estimate next year's revenue growth at 10.1%, indicating a potential upside. The company's focus on investing for growth, targeted M&A, and returning excess cash through dividends and buybacks is expected to drive long-term value creation.

Outlook and Risks

The company does not see the EV incentive expiry in China as a significant impact on their Q1 outlook or for the rest of the year. The sale of the MEMS sensor business will have a revenue impact of $300 million and a minor improvement in gross margin. The company's exposure to the data center AI market is growing nicely, and is sitting within the Industrial segment.

3. NewsRoom

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Why NXP Semiconductors' Post-Earnings Dip Could Be a Buying Window

Feb -04

Source: marketbeat.com

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Y Intercept Hong Kong Ltd Makes New Investment in NXP Semiconductors N.V. $NXPI

Feb -04

Source: defenseworld.net

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NXP Semiconductors: Undervalued Leverage To An Eventual Recovery (Upgrade)

Feb -03

Source: seekingalpha.com

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NXP Semiconductors N.V. (NXPI) Q4 2025 Earnings Call Transcript

Feb -03

Source: seekingalpha.com

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NXP Semiconductors' Q4 Earnings and Revenues Beat Estimates

Feb -03

Source: zacks.com

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NXP (NXPI) Q4 Earnings: Taking a Look at Key Metrics Versus Estimates

Feb -03

Source: zacks.com

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Market Indexes Bounce Back to Start a New Trading Week

Feb -02

Source: zacks.com

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NXP Semiconductors (NXPI) Q4 Earnings and Revenues Surpass Estimates

Feb -02

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.00%)

6. Segments

High Performance Mixed Signal (HPMS)

Expected Growth: 6.0%

The High Performance Mixed Signal (HPMS) segment growth of 6.0% is driven by increasing demand for advanced connectivity, sensing, and power management solutions in automotive, industrial, and IoT applications. NXP's leadership in mixed-signal technology, strategic acquisitions, and expanding product portfolio position the company for sustained growth in this segment.

7. Detailed Products

Microcontrollers

NXP's microcontrollers are a range of programmable devices that integrate a processor, memory, and peripherals, used for embedded systems, IoT, and industrial control applications.

Processors

NXP's processors are a range of high-performance, low-power devices used for applications such as industrial control, automotive, and consumer electronics.

RF Power Amplifiers

NXP's RF power amplifiers are a range of high-performance devices used for radio frequency applications such as cellular base stations, broadcasting, and radar systems.

Secure Identification Solutions

NXP's secure identification solutions are a range of products used for secure authentication, encryption, and identification applications.

Automotive Solutions

NXP's automotive solutions are a range of products used for in-vehicle networking, safety, and infotainment applications.

Industrial Solutions

NXP's industrial solutions are a range of products used for industrial control, automation, and IoT applications.

Smart Card Solutions

NXP's smart card solutions are a range of products used for secure authentication, encryption, and identification applications.

Wireless Connectivity Solutions

NXP's wireless connectivity solutions are a range of products used for Wi-Fi, Bluetooth, and other wireless connectivity applications.

8. NXP Semiconductors N.V.'s Porter Forces

Forces Ranking

Threat Of Substitutes

NXP Semiconductors N.V. operates in the semiconductor industry, which has a moderate threat of substitutes. While there are alternative technologies and products available, such as those offered by competitors like Texas Instruments, STMicroelectronics, and Infineon, NXP's focus on automotive, industrial, and IoT markets provides a degree of insulation. The company's products are often designed to meet specific customer requirements, making substitution more challenging.

Bargaining Power Of Customers

NXP Semiconductors N.V. serves a diverse customer base across various industries, including automotive, industrial, and consumer electronics. While some large customers, such as automotive manufacturers, may have significant bargaining power due to their volume purchases, NXP's diversified revenue streams and strong relationships with customers mitigate this force. Additionally, NXP's focus on providing high-quality products and innovative solutions helps to maintain a relatively balanced power dynamic.

Bargaining Power Of Suppliers

NXP Semiconductors N.V. has a large and diversified supplier base, which reduces the bargaining power of individual suppliers. The company also has a strong procurement organization and a history of negotiating favorable terms with suppliers. Furthermore, many of NXP's suppliers are large, established companies with limited ability to dictate terms to NXP.

Threat Of New Entrants

The semiconductor industry has high barriers to entry, including significant capital requirements for manufacturing and R&D, as well as the need for established relationships with customers and suppliers. NXP Semiconductors N.V. has a long history and a strong reputation in the industry, making it difficult for new entrants to compete effectively. Additionally, the complexity of semiconductor design and manufacturing processes provides a further barrier to entry.

Intensity Of Rivalry

The semiconductor industry is highly competitive, with many established players competing for market share. NXP Semiconductors N.V. competes with a range of companies, including Texas Instruments, STMicroelectronics, Infineon, and Qualcomm, among others. The industry's competitive intensity is driven by factors such as excess manufacturing capacity, commoditization of certain products, and the need for continuous innovation to stay ahead of the competition.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 54.17%
Debt Cost 4.45%
Equity Weight 45.83%
Equity Cost 10.96%
WACC 7.43%
Leverage 118.20%

11. Quality Control: NXP Semiconductors N.V. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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QUALCOMM

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Yield: 4.0

Momentum: 7.0

Volatility: 6.0

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ASML Holding

A-Score: 4.8/10

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Yield: 1.2

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ASM International

A-Score: 4.2/10

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Growth: 8.2

Quality: 8.4

Yield: 1.2

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NXP Semiconductors

A-Score: 3.8/10

Value: 1.6

Growth: 6.2

Quality: 7.0

Yield: 3.1

Momentum: 2.5

Volatility: 2.7

1-Year Total Return ->

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Infineon Technologies

A-Score: 3.6/10

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Growth: 4.9

Quality: 4.7

Yield: 1.2

Momentum: 5.0

Volatility: 3.3

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STMicroelectronics

A-Score: 3.6/10

Value: 5.4

Growth: 5.2

Quality: 4.7

Yield: 1.9

Momentum: 2.0

Volatility: 2.3

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

244.43$

Current Price

244.43$

Potential

-0.00%

Expected Cash-Flows