NXP Semiconductors N.V.'s (NASDAQ:NXPI) Intrinsic Value Is Potentially 85% Above Its Share Price

Simply Wall St.11-24 21:41

Key Insights Using the 2 Stage Free Cash Flow to Equity, NXP Semiconductors fair value estimate is US$419 NXP Semiconductors is estimated to be 46% undervalued based on current share price of US$...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap

Leave a comment

{"i18n":{"language":"en_US"},"isChannel":false,"data":{"share":"https://ttm.financial/m/news/2485944297?lang=en_US&edition=fundamental","thumbnail":"https://s.yimg.com/uu/api/res/1.2/5Tyy8Oun7d69.ebTzNgpXA--~B/aD00MzI7dz0xMTk0O2FwcGlkPXl0YWNoeW9u/https://media.zenfs.com/en/simply_wall_st__316/ce85212c51bd88fd1fdcd0febb642a4a","is_english":true,"pubTime":"2024-11-24 21:41","share_image_url":"https://static.laohu8.com/5f26f4a48f9cb3e29be4d71d3ba8c038","id":"2485944297","market":"us","top_or_hot":-1,"title":"NXP Semiconductors N.V.'s (NASDAQ:NXPI) Intrinsic Value Is Potentially 85% Above Its Share Price","media":"Simply Wall St.","content":"<div>\n<p>Key Insights\n\n Using the 2 Stage Free Cash Flow to Equity, NXP Semiconductors fair value estimate is US$419 \n NXP Semiconductors is estimated to be 46% undervalued based on current share price of US$...</p>\n\n<a href=\"https://finance.yahoo.com/news/nxp-semiconductors-n-v-nasdaq-134147599.html\">Source Link</a>\n\n</div>\n","source":"yahoofinance","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>NXP Semiconductors N.V.'s (NASDAQ:NXPI) Intrinsic Value Is Potentially 85% Above Its Share Price</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nNXP Semiconductors N.V.'s (NASDAQ:NXPI) Intrinsic Value Is Potentially 85% Above Its Share Price\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-11-24 21:41 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://finance.yahoo.com/news/nxp-semiconductors-n-v-nasdaq-134147599.html><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Key Insights\n\n Using the 2 Stage Free Cash Flow to Equity, NXP Semiconductors fair value estimate is US$419 \n NXP Semiconductors is estimated to be 46% undervalued based on current share price of US$...</p>\n\n<a href=\"https://finance.yahoo.com/news/nxp-semiconductors-n-v-nasdaq-134147599.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"NDAQ","symbol_name":"纳斯达克OMX交易所","start_time":0,"source_url":"https://finance.yahoo.com/news/nxp-semiconductors-n-v-nasdaq-134147599.html","article_id":"2485944297","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/5Tyy8Oun7d69.ebTzNgpXA--~B/aD00MzI7dz0xMTk0O2FwcGlkPXl0YWNoeW9u/https://media.zenfs.com/en/simply_wall_st__316/ce85212c51bd88fd1fdcd0febb642a4a"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2485944297","pubTimestamp":1732455707,"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"Using the 2 Stage Free Cash Flow to Equity, NXP Semiconductors fair value estimate is US$419. NXP Semiconductors is estimated to be 46% undervalued based on current share price of US$226. Analyst price target for NXPI is US$266 which is 37% below our fair value estimate. In this article we are going to estimate the intrinsic value of NXP Semiconductors N.V.  by projecting its future cash flows and then discounting them to today's value. The Discounted Cash Flow  model is the tool we will apply to do this. Before you think you won't be able to understand it, just read on!We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. If you still have some burning questions about this type of valuation, take a look at the Simply Wall St analysis model.","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"NDAQ":"纳斯达克OMX交易所","BK4512":"苹果概念","BK4112":"金融交易所和数据",".IXIC":"NASDAQ Composite","LU2095319765.USD":"Natixis Thematics Subscription Economy R/A USD","IE00BZ199S13.USD":"BNY MELLON MOBILITY INNOVATION \"B\" (USD) ACC","LU0348723411.USD":"ALLIANZ GLOBAL HI-TECH GROWTH \"A\" (USD) INC","LU1992135399.USD":"Allianz Global Intelligent Cities AT Acc USD","LU2210150020.SGD":"Natixis Thematics Subscription Economy R/A SGD","LU2272731782.SGD":"Allianz Global Intelligent Cities AM Dis H2-SGD","FCF":"第一联邦金融","SQQQ":"纳指三倍做空ETF","LU2210149790.SGD":"Natixis Thematics Subscription Economy R/A SGD-H","LU2272731600.USD":"Allianz Global Intelligent Cities AM Dis USD","IE00BKPKM429.USD":"NEUBERGER BERMAN GLOBAL SUSTAINABLE EQUITY \"A\" (USD) ACC","LU1992135472.HKD":"ALLIANZ GLOBAL INTELLIGENT CITIES \"AT\" (HKD) ACC","QLD":"纳指两倍做多ETF","PSQ":"纳指反向ETF","IE00B64PRP62.GBP":"GUINNESS GLOBAL MONEY MANAGERS \"C\" (GBP) ACC","LU0175139822.USD":"AB FCP I Global Equity Blend A USD","BK4585":"ETF&股票定投概念","IE00B3QW5Z07.USD":"GUINNESS GLOBAL MONEY MANAGERS \"C\" (USD) ACC","LU1861214812.USD":"Blackrock Future of Transport A2 USD","BK4100":"有线和卫星","LU1861219969.SGD":"Blackrock Future of Transport A2 SGD-H","IE00BGHQF748.EUR":"GUINNESS GLOBAL MONEY MANAGERS \"C\" (EUR) ACC","LU1046421795.USD":"富达环球科技A-ACC","LU0289960550.SGD":"AB FCP I - GLOBAL EQUITY BLEND PORTFOLIO 'A' (SGD) ACC","BK4211":"区域性银行","LU2360107325.USD":"BGF FUTURE OF TRANSPORT \"A4\" (USD) INC","TQQQ":"纳指三倍做多ETF","NXP":"Nuveen Select Tax-Free Income Po","DCF":"Dreyfus Alcentra Global Credit Income 2024 Target Term Fund, Inc","BK4588":"碎股","BK4141":"半导体产品","TV":"墨西哥电视","NXPI":"恩智浦","LU1823568750.SGD":"Fidelity Global Technology A-ACC SGD","LU2133065610.SGD":"JPMorgan Investment Funds - Global Dividend A (mth) SGD","LU2247934214.USD":"FIDELITY FUNDS SUSTAINABLE FUTURE CONNECTIVITY \"A\" (USD) ACC","LU1718418525.SGD":"JPMorgan Investment Funds - Global Select Equity A (acc) SGD","BK4561":"索罗斯持仓","QID":"纳指两倍做空ETF"},"translate_title":null,"themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"TV":1,".IXIC":1,"NXPI":1,"NXP":1,"DCF":1,"FCF":1,"NDAQ":1,"PSQ":0.6,"QID":0.6,"QLD":0.6,"SQQQ":0.6,"TQQQ":0.6,"MNQmain":0.6,"NQmain":0.6},"content_text":"Key Insights\n\n Using the 2 Stage Free Cash Flow to Equity, NXP Semiconductors fair value estimate is US$419 \n NXP Semiconductors is estimated to be 46% undervalued based on current share price of US$226 \n  Analyst price target for NXPI is US$266 which is 37% below our fair value estimate \n\n In this article we are going to estimate the intrinsic value of NXP Semiconductors N.V. (NASDAQ:NXPI) by projecting its future cash flows and then discounting them to today's value. The Discounted Cash Flow (DCF) model is the tool we will apply to do this. Before you think you won't be able to understand it, just read on! It's actually much less complex than you'd imagine. \n We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. If you still have some burning questions about this type of valuation, take a look at the Simply Wall St analysis model. \n See our latest analysis for NXP Semiconductors \n Is NXP Semiconductors Fairly Valued? \n We are going to use a two-stage DCF model, which, as the name states, takes into account two stages of growth. The first stage is generally a higher growth period which levels off heading towards the terminal value, captured in the second 'steady growth' period. To start off with, we need to estimate the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. \n A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, so we need to discount the sum of these future cash flows to arrive at a present value estimate: \n 10-year free cash flow (FCF) forecast \n\n\n\n\n2025\n2026\n2027\n2028\n2029\n2030\n2031\n2032\n2033\n2034\n\n\n Levered FCF ($, Millions) \nUS$3.03b\nUS$3.75b\nUS$4.28b\nUS$5.57b\nUS$6.37b\nUS$7.07b\nUS$7.66b\nUS$8.17b\nUS$8.62b\nUS$9.02b\n\n\nGrowth Rate Estimate Source\nAnalyst x12\nAnalyst x9\nAnalyst x5\nAnalyst x2\nEst @ 14.46%\nEst @ 10.91%\nEst @ 8.42%\nEst @ 6.68%\nEst @ 5.46%\nEst @ 4.61%\n\n\n Present Value ($, Millions) Discounted @ 8.6% \nUS$2.8k\nUS$3.2k\nUS$3.3k\nUS$4.0k\nUS$4.2k\nUS$4.3k\nUS$4.3k\nUS$4.2k\nUS$4.1k\nUS$4.0k\n\n\n\n(\"Est\" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = US$38b\n We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 5-year average of the 10-year government bond yield (2.6%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 8.6%. \nTerminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = US$9.0b× (1 + 2.6%) ÷ (8.6%– 2.6%) = US$155b\nPresent Value of Terminal Value (PVTV)= TV / (1 + r)10= US$155b÷ ( 1 + 8.6%)10= US$68b\n The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is US$107b. To get the intrinsic value per share, we divide this by the total number of shares outstanding. Relative to the current share price of US$226, the company appears quite good value at a 46% discount to where the stock price trades currently. The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent. \n\n\n\n  NasdaqGS:NXPI Discounted Cash Flow November 24th 2024\n \n\n The Assumptions \n We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows. You don't have to agree with these inputs, I recommend redoing the calculations yourself and playing with them. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at NXP Semiconductors as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 8.6%, which is based on a levered beta of 1.448. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. \nSWOT Analysis for NXP Semiconductors\n\n\nStrength\n\nDebt is well covered by earnings and cashflows.\n\n\nDividends are covered by earnings and cash flows.\n\n\nDividend information for NXPI.\n\n\n\nWeakness\n\nEarnings declined over the past year.\n\n\nDividend is low compared to the top 25% of dividend payers in the Semiconductor market.\n\n\n\nOpportunity\n\nAnnual earnings are forecast to grow for the next 3 years.\n\n\nGood value based on P/E ratio and estimated fair value.\n\n\n\nThreat\n\n Annual earnings are forecast to grow slower than the American market.\n\n\nWhat else are analysts forecasting for NXPI?\n\n\n\n Moving On: \n Whilst important, the DCF calculation is only one of many factors that you need to assess for a company. DCF models are not the be-all and end-all of investment valuation. Preferably you'd apply different cases and assumptions and see how they would impact the company's valuation. If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. Why is the intrinsic value higher than the current share price? For NXP Semiconductors, we've put together three fundamental elements you should further examine: \n\n Risks: For example, we've discovered 1 warning sign for NXP Semiconductors that you should be aware of before investing here. \nFuture Earnings: How does NXPI's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.\n Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing! \n\n PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the NASDAQGS every day. If you want to find the calculation for other stocks just search here.\nHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"2","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.2","shortVersion":"4.29.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2485944297"}