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

Zacks Equity Research
·3 mins read

NXP Semiconductors (NXPI) closed the most recent trading day at $137.23, moving +0.26% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.01%. At the same time, the Dow added 0.39%, and the tech-heavy Nasdaq lost 0.36%.

Prior to today's trading, shares of the chipmaker had gained 7.13% over the past month. This has outpaced the Computer and Technology sector's gain of 4.31% and the S&P 500's gain of 2.55% in that time.

NXPI will be looking to display strength as it nears 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. Our most recent consensus estimate is calling for quarterly revenue of $2.27 billion, up 0.1% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $5.54 per share and revenue of $8.37 billion, which would represent changes of -38.44% and -5.71%, respectively, from the prior year.

Any recent changes to analyst estimates for NXPI should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 19.5% higher. NXPI is holding a Zacks Rank of #2 (Buy) right now.

Investors should also note NXPI's current valuation metrics, including its Forward P/E ratio of 24.73. This represents a discount compared to its industry's average Forward P/E of 35.35.

It is also worth noting that NXPI currently has a PEG ratio of 2.47. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Semiconductor - Analog and Mixed industry currently had an average PEG ratio of 2.53 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 122, putting it in the top 49% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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