NXP Semiconductors (NXPI) Stock Sinks As Market Gains: What You Should Know

Zacks Equity Research
·3-min read

NXP Semiconductors (NXPI) closed at $134.89 in the latest trading session, marking a -0.71% move from the prior day. This change lagged the S&P 500's daily gain of 0.52%. At the same time, the Dow added 0.54%, and the tech-heavy Nasdaq gained 0.19%.

Coming into today, shares of the chipmaker had gained 13.27% in the past month. In that same time, the Computer and Technology sector gained 7.19%, while the S&P 500 gained 4.79%.

Investors will be hoping for strength from NXPI as it approaches its next earnings release, which is expected to be October 26, 2020. The company is expected to report EPS of $1.59, down 34.3% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $2.27 billion, up 0.1% from the prior-year quarter.

NXPI's full-year Zacks Consensus Estimates are calling for earnings of $5.54 per share and revenue of $8.37 billion. These results would represent year-over-year changes of -38.44% and -5.71%, respectively.

Investors might also notice recent changes to analyst estimates for NXPI. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 19.5% higher within the past month. NXPI is holding a Zacks Rank of #2 (Buy) right now.

In terms of valuation, NXPI is currently trading at a Forward P/E ratio of 24.55. For comparison, its industry has an average Forward P/E of 34.58, which means NXPI is trading at a discount to the group.

Investors should also note that NXPI has a PEG ratio of 2.45 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Semiconductor - Analog and Mixed industry currently had an average PEG ratio of 2.51 as of yesterday's close.

The Semiconductor - Analog and Mixed industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 175, putting it in the bottom 31% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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