NXP Semiconductors NV (NXPI, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $190.20, NXP Semiconductors NV has witnessed a daily gain of 5.16%, marked against a three-month change of -10.45%. A thorough analysis, underlined by the GF Score, suggests that NXP Semiconductors NV is well-positioned for substantial growth in the near future.
Understanding the GF Score
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 6/10
- Profitability rank: 9/10
- Growth rank: 10/10
- GF Value rank: 9/10
- Momentum rank: 7/10
Each one of these components is ranked and the ranks also have positive correlation with the long-term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With a high GF Score of 95 out of 100, NXP Semiconductors NV signals the highest outperformance potential.
Company Overview: NXP Semiconductors NV
NXP Semiconductors NV is a leading supplier of high-performance mixed-signal products. The firm acquired Freescale Semiconductor in 2015 and now has significant market share in the automotive market, where it supplies microcontrollers and analog chips into automotive clusters, powertrains, infotainment systems, and radars. NXP Semiconductors also serves industrial and Internet of Things, mobile, and communications infrastructure. With a market cap of $48.24 billion and sales amounting to $12.61 billion, the company boasts an operating margin of 27.53%, reflecting its strong operational efficiency.
Financial Strength Breakdown
According to the Financial Strength rating, NXP Semiconductors NV's robust balance sheet exhibits resilience against financial volatility, reflecting prudent management of capital structure. The Interest Coverage ratio for NXP Semiconductors NV stands impressively at 8.72, underscoring its strong capability to cover its interest obligations. This robust financial position resonates with the wisdom of legendary investor Benjamin Graham, who favored companies with an interest coverage ratio of at least 5. With a favorable Debt-to-Revenue ratio of 0.86, NXP Semiconductors NV's strategic handling of debt solidifies its financial health.
Profitability Rank Breakdown
The Profitability Rank shows NXP Semiconductors NV's impressive standing among its peers in generating profit. NXP Semiconductors NV's Operating Margin has increased significantly over the past five years, as shown by the following data: 2020: 3.53%; 2021: 23.35%; 2022: 28.73%; 2023: 27.69%; 2024: 27.53%. Furthermore, the company's Gross Margin has seen a consistent rise over the past five years, as evidenced by the data: 2020: 49.18%; 2021: 54.84%; 2022: 56.93%; 2023: 56.89%; 2024: 56.44%. This trend underscores the company's growing proficiency in transforming revenue into profit. NXP Semiconductors NV's strong Predictability Rank of 4.0 stars out of five underscores its consistent operational performance, providing investors with increased confidence.
Growth Rank Breakdown
Ranked highly in Growth, NXP Semiconductors NV demonstrates a strong commitment to expanding its business. The company's 3-Year Revenue Growth Rate is 6.8%, which outperforms better than 60.99% of 946 companies in the Semiconductors industry. Moreover, NXP Semiconductors NV has seen a robust increase in its earnings before interest, taxes, depreciation, and amortization (EBITDA) over the past few years. Specifically, the three-year growth rate stands at 7.4%, and the rate over the past five years is 17.8%. This trend accentuates the company's continued capability to drive growth.
Conclusion: A Promising Future for NXP Semiconductors NV
With its strong financial strength, impressive profitability, and robust growth metrics, NXP Semiconductors NV's GF Score highlights the firm's unparalleled position for potential outperformance. As the company continues to leverage its market position and expand its operations, it remains a compelling choice for investors seeking long-term growth. GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
