NXP Semiconductors N.V. (NXPI): what the price assumes
In the published model solve dated 2026-Q2, anchored at $223.58, NXP Semiconductors N.V. (NXPI) is priced for +20.7% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-06-27.
Generated: 2026-08-30 · Source: https://boothcheck.com/report/NXPI
Headline
| Field | Value |
|---|---|
| Ticker | NXPI |
| Company | NXP Semiconductors N.V. |
| Current price | $223.58/sh |
| Composition | Automotive 58% / Industrial & IoT 19% / Mobile 13% / Communication Infrastructure & Other 11% |
What The Price Assumes (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin (value-band context) | 30.6% |
| Operating margin today | 30.4% |
| Margin expansion (value-band) | +0.2pp |
| Implied growth | 20.7% |
| Multiple paid | 17x operating income |
The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.
Solve inputs: computed at a 10.6% cost of capital with 4% terminal growth over a 5-year stage.
How unusual the bet is: within-range (limited comparison data)
| Reference | Value |
|---|---|
| vs own history | +0.10σ |
| cohort percentile (of 188 peers) | 21 |
Valuation X-Ray
The price is justified by relative-multiple; asset-based/earnings-power land below the price.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 2.53x | 5 | expensive |
| Earnings | 1.82x | 5 | expensive |
| Relative | 0.91x | 5 | justifies |
| Growth | 1.29x | 3 | expensive |
Families that justify the price: Relative Families that call it expensive: Asset, Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.1%); the inversion above states its own rate.
Per-Model Detail (n=18)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $172.99 | 1.29x | yes | FCF base $2.7B, growth 3% (input: historical growth), terminal g 2.7%, WACC 9.1%, 5yr projection |
| DCF Exit Multiple | Growth | $205.41 | 1.09x | yes | Exit EV/EBITDA: 9.8x / 11.8x / 13.8x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | $241.32 | 0.93x | yes | P/E 22x (static sector reference · 2026-04), scenarios: 18.5x / 22.0x / 25.5x (bear / base = reference held flat / bull), EV/EBITDA 16x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $87.27 | 2.56x | yes | BV/sh $43.28, ROE (TTM) 18.7%, ke 9.3% |
| Two-Stage Excess Return | Asset | $122.41 | 1.83x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $157.97 | 1.42x | yes | Rev $12.6B, growth 3% (input: historical growth; tapered), Terminal P/S: 3.8x / 4.5x / 5.2x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $164.17 | 1.36x | yes | EPS $8.03, growth 20% (input: historical EPS growth), PEG=1.35 (Fair) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $127.71 | 1.75x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $3.51B × (1−21%) / WACC 9.1% → EPV (no growth) |
| Residual Income | Asset | $120.64 | 1.85x | yes | BV $43.28 + 5yr PV of (ROE (TTM) 18.7% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $88.43 | 2.53x | yes | √(22.5 × EPS $8.03 × BVPS $43.28) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $300.25 | 0.74x | yes | EBITDA $4.63B × sector EV/EBITDA 16.0x |
| FCF Yield | Earnings | $122.85 | 1.82x | yes | FCF $2711.0M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $103.84 | 2.15x | yes | SBC-adj FCF $2.27B (FCF $2.71B − SBC $0.44B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $259.09 | 0.86x | yes | EPS $8.03 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $61.42 | 3.64x | yes | BV $43.28 × (ROIC 12.9% / WACC 9.1%) |
| P/Sales Sector | Relative | $249.83 | 0.89x | yes | Revenue $12.62B × sector P/S 5.0x |
| PEG Fair Value | Relative | $246.25 | 0.91x | yes | EPS $8.03 × (PEG 1.5 × growth 20.4% (input: historical EPS growth)) → PE 30.7x |
| Earnings Yield | Earnings | $86.81 | 2.58x | yes | EPS $8.03 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Economic-Unit Decomposition (Sum Of The Parts)
Only one reportable economic unit is present in the current topology source. Consolidated operating lenses remain available, but there is no multi-unit decomposition.
| Unit | Role | Valuation basis | Revenue | Reported profit | Value evidence | Status |
|---|---|---|---|---|---|---|
| Semiconductors (single reportable segment) | operating | enterprise | 12.3B reported-currency | — | withheld | unresolved no unit value |
No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.
Solvency
| Field | Value |
|---|---|
| Net debt | $10.5b |
| Net debt / NOPAT (after-tax) | 3.48x |
| Net debt / operating income (pre-tax) | 2.75x |
| Interest coverage | 8.1x |
| Share count CAGR (buyback) | -1.1% |
| Burning cash | no |
Bullet Takeaways
- NXP is a focused analog and embedded-processing house aimed at four markets where chips are sticky and design-in cycles run for years: "Automotive, Industrial & IoT, Mobile, and Communication Infrastructure," end markets where the company says it earns "sustained, competitive differentiation through our technology leadership."
- The biggest risk is the price itself: at $313 the stock trades above every valuation method the analysis runs, and it carries real leverage, with gross debt of $14.2 billion against $3.7 billion of liquid assets, $10.5 billion net.
- The near-term swing factor is automotive bottoming: management guided second-quarter revenue of $2.8 billion to $3.0 billion with automotive expected flat year on year for the first time after five quarters of decline.
Bull Case
Lead with where the price sits, because the bull case has to start by admitting the obvious: at $313 the stock trades above every valuation lens in the analysis. The asset-based methods land near a third of the price, the earnings-power methods around 40% of it, peer multiples below it, and even the forward-growth methods do not reach it. No standard frame supports the price on demonstrated economics. The bull case, then, is not that the methods are wrong; it is that they cannot see what NXP is building, because they price the trough of a cycle as if it were the run rate.
The business underneath is genuinely high quality. NXP concentrates on four end markets, "Automotive, Industrial & IoT, Mobile, and Communication Infrastructure," and it competes there on "sustained, competitive differentiation through our technology leadership" rather than on price. That shows up in the economics: a trailing operating margin of 30.4%, return on equity near 18.7%, and gross margins that held at 55.0% even in a down quarter. The company funds that position with heavy reinvestment; research and development ran $3,647 million in 2024, "or 28.9% of revenue." Spending nearly thirty cents of every revenue dollar on R&D is how an analog franchise keeps its lead, and it is why the design wins compound across multi-year automotive and industrial cycles.
The forward bet is the recovery. Automotive has been in decline for five straight quarters, and management's second-quarter guide of $2.8 to $3.0 billion marks the first time it expects the segment flat year on year, the shape of a bottom forming. If electrification and advanced-driver-assistance content per vehicle keeps rising, NXP's automotive microcontrollers and processors ride a structural tailwind that the trailing numbers do not yet capture. Interest coverage of about 8 times means the balance sheet can carry the debt comfortably while the cycle turns, and the share count is slowly shrinking. The bull is underwriting the next up-cycle being bigger than the last; the methods, anchored on trailing cash flow, structurally cannot price that.
Bear Case
The competitive pressure is the place to start, because NXP does not own its end markets alone. In automotive and industrial analog and microcontrollers, it shares the field with Analog Devices, Texas Instruments, Microchip, Infineon, and Renesas, all of them well capitalized and pursuing the same electrification and edge-compute content. The 10-K is candid that success depends on the company's "ability to win competitive bid selection processes" and its "ability to develop products for use in our customers' equipment and products." Design-in leadership is durable until it isn't; the moment a competitor wins the next platform socket, NXP loses years of content. Texas Instruments in particular is adding analog capacity aggressively, and capacity additions in a cyclical industry are how pricing power erodes.
Then there is the price, and it is the heart of the bear case. At $313 not one valuation family reaches the stock. To justify it, NXP's operating margin has to climb from the 30.4% it earns today to roughly 39.5% and hold there for nearly eight years. That is not a small ask in a business where the most recent quarter ran an operating margin of 25.5% as automotive bottomed. The market is paying for a sustained margin expansion of nearly nine points in a competitive, capital-intensive, cyclical industry. If that expansion does not materialize, the blended multiple of roughly 23 times earnings compresses toward where peers trade, and the asset and earnings methods that sit at a third to half the price become the gravity the stock falls back toward.
The balance sheet adds a second layer of fragility. NXP carries $14.2 billion of gross debt against $3.7 billion of liquid assets, a net debt position of $10.5 billion, and the filing names the cost directly: leverage risks "limiting our flexibility in planning for, or reacting to, changes in our business or market conditions and placing us at a competitive disadvantage compared to our competitors who are less highly le"veraged. In an up-cycle that debt is invisible. In a prolonged automotive trough, or a higher-for-longer rate environment, it is a fixed claim on cash flow that a peer with net cash does not carry. The bear does not need NXP to fail; it only needs the margin recovery to come slower or smaller than a price this rich requires.
Valuation
The price is making an aggressive bet, and the cleanest way to see it is to ask what margin the stock requires. At $313, the price embeds an operating margin of roughly 39.5%, sustained for close to eight years, against the 30.4% NXP actually earns on a trailing basis. That is a demand for nearly nine points of margin expansion held for the better part of a decade, in a cyclical, competitive semiconductor business. It is the central assumption a buyer underwrites here.
The disagreement among the methods is unusually one-sided, and that is the signal. Every family lands below the price. The asset-value lenses, book value plus profitability and a Graham floor, sit near a third of where the stock trades; the earnings-power methods, including a zero-growth capitalization of free cash flow, land around 40% of the price; peer multiples on sales and EV/EBITDA land just below it; and even the forward-growth methods, the discounted cash-flow and future-market-cap models, do not reach it. When no family of method reaches the price, the price is a bet beyond what any standard frame supports. The spread is not noise to average away; it is the measure of how much of NXP's value lives in a future the trailing economics do not yet show.
Against its analog and embedded peers, NXP's implied multiple of roughly 23 times earnings is at the rich end of a cohort that includes Skyworks, Qorvo, and Analog Devices, names that compete for the same automotive and industrial sockets. The premium is the recovery and the content-growth story priced ahead of the print. On solvency the read is mixed: interest coverage near 8 times is comfortable and free cash flow is positive, so this is not a distressed balance sheet, but $10.5 billion of net debt is a real fixed claim that amplifies the downside if the automotive recovery stalls. The price is not supported by what NXP has demonstrated; it is supported only by what the next up-cycle has to deliver.
Catalysts
The defining near-term catalyst is the automotive turn. After five consecutive quarters of decline, NXP guided second-quarter 2025 revenue to $2.8 billion to $3.0 billion, a midpoint of $2.9 billion, and flagged automotive as flat year on year for the first time, the inflection the bull case rests on. First-quarter revenue was $2.84 billion, down 9% year on year, with GAAP earnings per share of $1.92 and a gross margin of 55.0%. The trajectory matters more than the level: a bottom forming in the largest segment changes the forward arithmetic.
The second catalyst is leadership. CEO Kurt Sievers, after a 30-year career with the company, is retiring at the end of 2025, with Rafael Sotomayor becoming President on April 28, 2025 and stepping up to President and CEO on October 28, 2025. A planned, internal succession at the top of a technology-led company is lower risk than an outside hire, but a new CEO inheriting a stock priced for sustained margin expansion has a high bar to clear from day one.
The combination to watch is whether the automotive recovery accelerates into the back half of 2025 under the incoming leadership, and whether content-per-vehicle gains in electrification and driver-assistance translate into the margin expansion the price requires. Each quarterly print from here is a referendum on the size and speed of the next up-cycle.
Peer Cohorts (Per Segment, With Filing Citations)
Semiconductors (single reportable segment) (reported)
- STM (STMicroelectronics N.V.)
- FY2025 20-F: …Discrete products ("P&D") reportable segment to Analog products, MEMS and Sensors ("AM&S") reportable segment. • In Microcontrollers, Digital ICs and RF products (MDRF) Product Group: • the newly created ‘Embedded Processing' reportable segment includes the former ‘MCU' segment (excluding the RF ASICs mentioned…
- FY2025 20-F: (iii) in Personal Electronics: engaged customer programs in sensors and analog; (iv) in Communication Equipment and Computer Peripherals: data centers, including cloud optical interconnect and Power and Analog for AI servers and data centers and low earth orbit ("LEO") satellites. We are also uniquely positioned to…
- ADI (ANALOG DEVICES INC)
- FY2025 10-K: …sufficient to fulfill all orders. As is customary in the semiconductor industry, we allow most orders to be canceled within a reasonable notification period or deliveries to be delayed by customers without significant penalty, while also allowing certain distributors to receive price adjustment credits and to return…
- FY2025 10-K: …and potential customers or suppliers. Our competitors also include both emerging companies selling specialized products in markets we serve and companies outside of the U.S., including entities associated with well-funded efforts by foreign governments to create indigenous semiconductor industries. We believe that…
- ON (ON Semiconductor Corporation)
- FY2025 10-K: …are manufactured or the location of the end-customer. The Company believes it is, therefore, not meaningful to present operating profit by geographical location. The following table illustrates the product technologies under each of the Company's reportable segments based on the Company's operating strategy. Because…
- FY2025 10-K: LIDATED FINANCIAL STATEMENTS The following table summarizes goodwill by operating and reportable segments (in millions): As of December 31, 2025 As of December 31, 2024 Operating and Reportable Segments Goodwill Accumulated Impairment Losses Carrying Value Goodwill Accumulated Impairment Losses Carrying Value AMG $…
- MCHP (MICROCHIP TECHNOLOGY INCORPORATED)
- FY2025 10-K: …balances of the Company's receivables. Note 3 . Geographic and Segment Information The Company's business is made up of two operating segments, semiconductor products and technology licensing. These segments represent management's view of the business for which separate financial information is available and…
- FY2025 10-K: …the Company's manufacturing capabilities to help ensure the efficiency of the Company's operations and fulfillment of customer requirements. The technology licensing segment includes sales and licensing of the Company's intellectual property. The CODM uses segment gross profit for evaluating each segment's…
- AVGO (Broadcom Inc.)
- FY2025 10-K: …a broad range of semiconductor and semiconductor-based solutions that are incorporated into electronic products, as well as from modules, switches and subsystems and, in some cases, racks. Net revenue is also generated from the sale of software solutions that enable our customers to plan, develop, deliver, automate,…
- FY2025 10-K: …top customers. This enhances our customer reach and our visibility into new product opportunities and, in the case of our semiconductor customers, enables us to support our customers in each stage of their product development cycle, from the early stages of production design to volume manufacturing and future growth.…
- MRVL (MARVELL TECHNOLOGY, INC)
- FY2025 10-K: …foundry capacity with the appropriate technological capability; and • the number and nature of our competitors in a given market. Companies that compete directly with our businesses include, but are not limited to, Advanced Micro Devices, Inc. ("AMD"), Alchip Technologies ("Alchip"), Alphawave Semi ("Alphawave"),…
- FY2025 10-K: …the design, development and sale of integrated circuits. For information regarding our revenue by geographic area, and property and equipment by geographic area, please see "Note 14 - Segment and Geographic Information" in our Notes to Consolidated Financial Statements set forth in Part II, Item 8 of this Annual…
- QRVO (Qorvo, Inc.)
- FY2025 10-K: …publicly traded companies with similar operating and investment characteristics. Identified Intangible Assets The Company amortizes definite-lived intangible assets (including developed technology, customer relationships, technology licenses and trade names) on a straight-line basis over their estimated useful lives.…
- FY2025 10-K: …which constituted a reporting unit within the HPA segment, and impairment testing was triggered. The impairment testing resulted in impairments of goodwill and intangible assets (primarily developed technology) of approximately $ 96.5 million and $ 16.6 million, respectively, recorded in "Goodwill and 63 Table of…
- SWKS (SKYWORKS SOLUTIONS, INC.)
- FY2025 10-K: …in demand for our mobile and Wi-Fi products. For information regarding net revenue by geographic region and customer concentration, see Note 14 to Item 8 of this Annual Report on Form 10-K. Gross Profit Fiscal Years Ended (dollars in millions) October 3, 2025 Change September 27, 2024 Change September 29, 2023 Gross…
- FY2025 10-K: , and other devices, constituted more than ten percent of our net revenue. Further, the Company's three largest accounts receivable balances comprised 82% and 80% of aggregate gross accounts receivable as of 9 Table of Contents October 3, 2025 and September 27, 2024, respectively. For further information regarding…
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
NXP Q1 2025 earnings release