Company Reports

NXP Semiconductors is one of the largest suppliers of semiconductors for the automotive market and a significant player in the analog and mixed-signal chip markets generally. We believe the company has a strong position in the automotive, industrial, and mobile end markets through a combination of high customer switching costs and intangible assets. Although the company sells into cyclical industries, the strength of these competitive advantages gives us confidence that it will generate excess returns over the cost of capital over the next decade and beyond.

NXP Semiconductors reported second-quarter revenue of $3.50 billion, up 19% year over year and above the midpoint of guidance. NXP expects September-quarter revenue of $3.75 billion, up 18% year over year and ahead of FactSet consensus estimates of $3.71 billion.

NXP Semiconductors reported first-quarter revenue of $3.18 billion, up 12% year over year and above the midpoint of guidance. NXP expects revenue in the June quarter to be $3.45 billion, up 18% year over year and well above FactSet consensus estimates of $3.27 billion.

NXP Semiconductors is one of the largest suppliers of semiconductors for the automotive market and a significant player in the analog and mixed-signal chip markets generally. We believe the company has a strong position in the automotive, industrial, and mobile end markets through a combination of high customer switching costs and intangible assets. Although the company sells into cyclical industries, the strength of these competitive advantages gives us confidence that it will generate excess returns over the cost of capital over the next decade and beyond.

NXP Semiconductors reported fourth-quarter revenue of $3.34 billion, up 7% year over year, up 5% sequentially, and above the midpoint of guidance. NXP guided first-quarter revenue to $3.15 billion, ahead of FactSet consensus estimates and up 11% year over year.

NXP Semiconductors is one of the largest suppliers of semiconductors for the automotive market and a significant player in the analog and mixed-signal chip markets generally. We believe the company has a strong position in the automotive, industrial, and mobile end markets through a combination of high customer switching costs and intangible assets. Although the company sells into cyclical industries, the strength of these competitive advantages gives us confidence that it will generate excess returns over the cost of capital over the next decade and beyond.

NXP Semiconductors reported third-quarter revenue of $3.17 billion, down 2% year over year but up 8% sequentially and above the midpoint of guidance. NXP’s fourth-quarter revenue guidance of $3.30 billion at the midpoint was ahead of FactSet consensus estimates.

STMicroelectronics agreed to acquire the MEMS (Micro-Electro-Mechanical Systems) sensor business of NXP Semiconductors for $950 million. ST disclosed that NXP’s MEMS business generated $300 million of revenue in 2024, with gross and operating margins that would be accretive to ST.

NXP Semiconductors reported second-quarter revenue down 6% year over year but up 3% sequentially and above the midpoint of guidance. Third-quarter revenue is forecast to rise 8% sequentially and be modestly above FactSet consensus estimates.

NXP Semiconductors reported first-quarter revenue down 9% year over year but in line with guidance. Second-quarter revenue should rise 2% sequentially and be modestly above FactSet consensus estimates. The company will also undergo a CEO transition in 2025.

NXP Semiconductors is one of the largest suppliers of semiconductors for the automotive market and a significant player in the analog and mixed-signal chip markets generally. We believe the company has a strong position in the automotive, industrial, mobile, and communications infrastructure markets through a combination of high customer switching costs and intangible assets. Although the company sells into cyclical industries, the strength of these competitive advantages gives us confidence that it will generate excess returns over the cost of capital over the next decade and beyond.

We maintain our $300 per share fair value estimate and wide moat rating for NXP Semiconductors, along with maintaining our ratings across the rest of our US and European analog/mixed-signal chipmaker coverage, amid a host of tariffs levied by the US government, with our greatest concern stemming around the 25% tariffs on the automotive sector.

Battery electric vehicle sales stalled in the US and Europe in 2024 after a postpandemic rise. With sales growing in China and globally, many companies throughout the EV supply chain stand to benefit from the transition to EVs.

Wide-moat NXP Semiconductors reported solid fourth-quarter results and provided investors with a first-quarter outlook that was mildly below FactSet consensus estimates but could have been much worse, given recent uncertainty around global tariffs and automotive production. We maintain our $300 fair value estimate and view NXP as one of our top picks within the semiconductor sector, especially for long-term investors with the patience to ride out economic uncertainty.

We attended NXP's Investor Day in Boston and maintain our $300 fair value estimate, as we are pleased with the company's financial targets over the next three years and encouraged by the company's road map in Industrial and Internet of Things products. Shares still appear undervalued for this wide-moat name, and we consider NXP to be one of our top picks in semiconductors.

We maintain our $300 fair value estimate for wide-moat NXP Semiconductors as we provide an update to our third-quarter earnings note published Monday, Nov. 4, based on information gleaned from management’s earnings call. We still see an attractive margin of safety for long-term investors.

NXP Semiconductors is one of the largest suppliers of semiconductors for the automotive market and a significant player in the analog and mixed-signal chip markets generally. We believe the company has a strong position in the automotive, industrial, mobile, and communications infrastructure markets through a combination of switching costs and intangible assets. Although the company sells into cyclical industries, the strength of these competitive advantages gives us confidence that it will generate excess returns over the cost of capital over the next decade and beyond.

Wide-moat NXP Semiconductors reported decent third-quarter results but provided investors with a tepid forecast for the December quarter, citing broader macro weakness in Europe and the Americas as weighing on the company’s industrial and Internet of Things product segment. Our first take on these results is not a good one—NXP started to see a recovery in Industrial and IoT earlier this year after disappointing sales in 2023, and another downtick in revenue was not on our radar.

Wide-moat NXP Semiconductors reported solid second-quarter results but provided investors with a third-quarter outlook that fell short of our expectations and FactSet consensus estimates, as the automotive and core industrial end markets face some headwinds. Still, we don’t believe NXP is losing market share, and we are confident in the tailwinds around rising chip content per car in the years ahead. We maintain our $320 fair value estimate and view the 7% premarket selloff in shares as overdone and a long-term buying opportunity.

We are upgrading our moat rating for NXP Semiconductors to wide from narrow, while raising our fair value estimate to $320 from $290 as we have greater confidence in the company’s ability to generate excess returns on capital over time. Shares appear modestly undervalued versus our new fair value estimate.