Mark Holder
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NXP Semi: Cruising Past Estimates

After the close yesterday, NXP Semi (NXPI) reported the following quarterly numbers per Briefing.com:

  • Reports Q1 (Mar) earnings of $1.14 per share, $0.03 better than the Capital IQ Consensus of $1.11; revenues rose 51.6% year/year to $2.22 bln vs the $2.21 bln Capital IQ Consensus.
  • Co issues in-line guidance for Q2, sees EPS of $1.30-1.40 vs. $1.32 Capital IQ Consensus Estimate; sees Q2 revs of $2.3-2.4 bln vs. $2.33 bln Capital IQ Consensus Estimate.

The semi company still sees subdued demand, but the valuation equation is exceptional. At $87, the stock trades at only 11.8x EPS estimates for 2017 with tons of upside due to the synergies from the Freescale Semi merger. In a more normal demand environment, analysts had expected earnings closer to $9 or more by next year. 

Stock remains cheap with plenty of upside in connected cars and mobile payments. 

Disclosure: No position