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1. Company Snapshot

1.a. Company Description

Nordic Semiconductor ASA, a fabless semiconductor company, designs, develops, markets, and sells integrated circuits and related solutions for short-and long-range wireless applications in Europe, the Americas, and the Asia/Pacific.It offers ultra-low power components; and develops low power cellular IoT.The company also provides Bluetooth 5 solutions; low power cellular devices for the IoT; and Bluetooth 5.1 solutions for direction finding applications.


In addition, it offers Zigbee 3.0 IoT solutions; Thread solution for low-power devices; nRF9160 system-in-package; nRF52 and nRF51 series system-on-chips, as well as nRF591, nRF53, nRF52, and nRF51 series software development kits; ANT, a proprietary ultra-low power wireless solution for battery operated products; and application specific integrated circuits and related consulting services.Further, the company provides software for system development, communication stacks, and application layer software, as well as development tools for desktops.Its products are used in various applications, such as audio, automotive, beacon, computer peripherals, drug delivery, patient monitoring and alerts, smart home, healthcare, connected health and home, education, industrial automation, LED lighting, logistics/asset tracking, transportation, retail and payment, sports and fitness, toys and gaming, virtual reality and augmented reality products, wireless PC peripherals, mobile phone accessories, and consumer electronics, as well as wearables, including connected watches, jewelry, proximity tags, and smart clothes and apparels.


The company was founded in 1983 and is headquartered in Trondheim, Norway.

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1.b. Last Insights on NOD

Nordic Semiconductor's recent performance was driven by strong Q2 results, beating consensus expectations, and a bullish Q3 revenue guidance of $165-185 million, citing stronger demand from major customers and momentum in its new nRF54 product platform. The company's acquisition of Neuton.AI and Memfault expanded its capabilities in edge AI and lifecycle management of connected products. Additionally, Logitech's better-than-expected demand for computer peripherals from consumer and industrial customers likely contributed to Nordic's optimism in its end markets.

1.c. Company Highlights

2. Nordic Semiconductor Delivers Strong Q3 with 13% YoY Revenue Growth

Nordic Semiconductor reported revenue of $179 million for the third quarter, a 13% increase year-over-year, and within the guided range. The gross margin came in at 52%, supported by a favorable product mix and positive contributions from the cloud service business. Earnings per share (EPS) was $0.525, slightly below analyst estimates of $0.581. The company's strong competitive position in the market and improvement in both short-range and long-range markets drove growth among large key customers and the broad market.

Publication Date: Oct -31

📋 Highlights
  • Q3 Revenue Growth: Revenue reached $179 million, a 13% year-over-year increase, with gross margin at 52%.
  • Long-Range Revenue Surge: Long-range revenue grew by nearly fourfold YoY to 5% of total revenue, driven by strong market demand.
  • EBITDA Performance: Adjusted EBITDA was $18 million, with a cash outflow of $26.6 million due to acquisitions and refinancing.
  • Financial Resilience: The company held $500 million in available cash, supported by $18.4 million in operational cash flow and $498 million in 9-month revenue (up 38% YoY).
  • Future Product Pipeline: nRF54 design activity is accelerating, with production transitions starting in Q3 and expected revenue contributions from 2026’s second half.

Segment Performance

The long-range revenue segment saw significant growth, increasing almost fourfold compared to the same quarter last year, now accounting for 5% of the company's revenue. As highlighted by Pal Elstad, CFO, "Long-range revenue growth was driven by changes in consumer and product mix, improvements in the broad market, and a positive contribution from the recently acquired services business."

Guidance and Outlook

For the fourth quarter, Nordic Semiconductor guided revenue between $155 million and $175 million, with the gross margin expected to remain above 50%. The company is maintaining its long-term ambition to keep gross margins above 50% and is on track to achieve its target of more than 20% average annual growth throughout the decade. Analysts estimate next year's revenue growth at 19.0%.

Valuation

With a current P/E Ratio of 208.65 and EV/EBITDA of 37.81, the market is pricing in significant growth expectations. The company's financial health is solid, with $500 million in available cash. The ROIC of 2.27% and ROE of 2.38% indicate room for improvement in capital efficiency. The Free Cash Flow Yield of 3.93% is attractive, suggesting the stock may be undervalued.

Operational Highlights

The company is seeing strong design activity with its nRF54 product, with revenue contributions expected to increase in 2026. The pipeline of designs and customers is robust, with certifications ongoing and expected to continue throughout 2026, driving growth.

3. NewsRoom

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Nordic Semiconductor shares hit two-year high on strong results and Q3 guidance

Aug -13

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Nordic Semiconductor acquires Memfault, launches the first complete chip-to-cloud platform for lifecycle management of connected products

Jun -24

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (12.12%)

6. Segments

Consumer

Expected Growth: 9.27%

Nordic Semiconductor ASA's 9.27% growth in the Consumer segment is driven by increasing demand for wireless connectivity in IoT devices, rising adoption of smart home devices, and growing popularity of wearable devices. Additionally, the company's leadership in Bluetooth Low Energy (BLE) and Wi-Fi technologies, as well as its strong relationships with key customers, contribute to its growth momentum.

Industrial

Expected Growth: 10.43%

Nordic Semiconductor ASA's 10.43% growth in the Industrial segment is driven by increasing demand for IoT devices, growing adoption of Industry 4.0 technologies, and rising need for wireless connectivity in industrial automation. Additionally, the company's focus on low-power wireless solutions and its strong presence in the Nordic region contribute to its growth.

Healthcare

Expected Growth: 22.72%

Nordic Semiconductor ASA's 22.72% growth in Healthcare is driven by increasing demand for wireless connectivity in medical devices, remote patient monitoring, and telemedicine. The rise of IoT-enabled healthcare solutions, government initiatives for digital healthcare, and growing need for efficient healthcare services also contribute to this growth.

Others

Expected Growth: 10.43%

Nordic Semiconductor ASA's 10.43% growth is driven by increasing demand for IoT devices, 5G network expansion, and growing adoption of Bluetooth and Wi-Fi technologies. Additionally, the company's focus on low-power wireless solutions and strategic partnerships contribute to its growth momentum.

Application Specific Integrated Circuits Components

Expected Growth: 10.55%

Nordic Semiconductor ASA's 10.55% growth in Application Specific Integrated Circuits (ASICs) is driven by increasing demand for IoT devices, rising adoption of 5G and Wi-Fi 6 technologies, and growing need for low-power, high-performance ASICs in industrial, automotive, and consumer electronics applications.

7. Detailed Products

nRF52 Series

A family of microcontrollers that combine a high-performance ARM Cortex-M4 processor with a range of peripherals and analog interfaces.

nRF53 Series

A series of microcontrollers that offer high-performance, low-power, and advanced security features.

nRF51 Series

A family of microcontrollers that provide a balance of performance, power consumption, and peripheral functionality.

nRF24 Series

A family of 2.4GHz transceivers that provide low-power, low-cost, and high-performance wireless connectivity.

nRF5340

A dual-mode Bluetooth 5.2 SoC that provides high-performance, low-power, and advanced security features.

nRF9160

A low-power LTE-M/NB-IoT System-in-Package (SiP) that provides cellular connectivity for IoT applications.

8. Nordic Semiconductor ASA's Porter Forces

Forces Ranking

Threat Of Substitutes

Nordic Semiconductor ASA operates in the semiconductor industry, which is characterized by a moderate threat of substitutes. While there are some substitutes available, such as alternative semiconductor materials, the industry's high barriers to entry and the complexity of semiconductor design and manufacturing limit the threat of substitutes.

Bargaining Power Of Customers

Nordic Semiconductor ASA's customers are primarily OEMs and ODMs in the wireless technology industry. The company's products are highly specialized, and customers have limited bargaining power due to the complexity of the products and the high switching costs.

Bargaining Power Of Suppliers

Nordic Semiconductor ASA relies on a few key suppliers for its semiconductor manufacturing process. While the company has some bargaining power due to its size and reputation, suppliers also have some bargaining power due to the specialized nature of the components and the high demand for them.

Threat Of New Entrants

The semiconductor industry has high barriers to entry, including significant capital expenditures, complex manufacturing processes, and high research and development costs. These barriers limit the threat of new entrants and make it difficult for new companies to enter the market.

Intensity Of Rivalry

The semiconductor industry is highly competitive, with many established players competing for market share. Nordic Semiconductor ASA faces intense competition from companies such as Qualcomm, Texas Instruments, and STMicroelectronics, which can lead to pricing pressure and reduced profit margins.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 20.50%
Debt Cost 3.95%
Equity Weight 79.50%
Equity Cost 10.43%
WACC 9.10%
Leverage 25.79%

11. Quality Control: Nordic Semiconductor ASA passed 4 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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A-Score: 3.3/10

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Growth: 3.6

Quality: 4.8

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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

136.9$

Current Price

136.9$

Potential

-0.00%

Expected Cash-Flows