QS Research · Michael Burry's Scion Capital analyst template · 2006
NXP Semiconductors N.V. (NXPI)
As of 2026-11-08 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction medium · base case +0% · downside -23% · upside +39%
On the TTM to Sep 27, 2026 base, NXPI earns $5.32B EBITDA and trades at 13.1x EV/EBITDA; at that own multiple the equity is worth EV $69.69B less $7.04B net debt = $62.65B / 252.05M shares = $248.6, essentially today's $248.29. The business is better than the price action: Q3 2026 revenue rose 19.3% y/y, non-GAAP EPS was $4.20 and non-GAAP FCF was $1.21B, 31.9% of revenue, while net leverage is only 1.3x. The upside to $345.6 (+39.2%) needs a re-rating to 17.7x EV/EBITDA, which I only allow because the $5B buyback, VW S32K5 design win and 2027 growth/margin targets are cited catalysts, not because the stock looks cheap. Downside at the FY2025 24.9% operating margin on TTM revenue is about $190.7 (-23.2%). Base is fair, so this is a watch, not a long: the long rule needs a +30% base and the base is ~0%.
Key numbers
- Share price: $248.29
- Market cap: $62.58B
- Latest financial period: TTM to Sep 27, 2026
- Revenue (TTM): $13.80B
- EV / EBITDA (TTM): 13.1x
- P/E (TTM): 19.4x
- Price / book: 5.18x
The 15 boxes
- ✓ 1. Long-form business notes
NXP is a one-segment, four-end-market semiconductor supplier (Automotive, Industrial & IoT, Mobile, Communication Infrastructure & Other) that sells microcontrollers, application/communication processors, connectivity, analog/interface, RF power and security chips through a direct-plus-distributor model; FY2025 revenue was $12,269 million versus $12,614 million in FY2024, down from the FY2023 peak of $13.28B but far above FY2020's $8.61B. Between the oldest and newest 10-K the story changed in three ways: the portfolio was re-cast from 'Key Applications / Growth Drivers' into 'Core' and 'Accelerated Growth' buckets (SDV, radar, electrification, connectivity, intelligent edge), three bolt-on acquisitions (TTTech Auto, Aviva Links, Kinara) were closed in 2025 for software, SerDes and edge-AI NPU capability, and manufacturing shifted toward 300mm via equity stakes in ESMC and VSMC while capex fell to $397 million in FY2025 from $1.06B in FY2022. Earnings power has compressed from the FY2022-FY2023 peak: operating income $3.05B and net income $2.02B in FY2025 versus $3.80B and $2.79B in FY2022, with operating cash flow still $2.82B.
- ✓ 2. Competitive advantage
NXP has a real but narrow durable advantage: five straight years (FY2021-FY2025) of gross margin between 54.8% and 56.9% on revenue of $11.06B-$13.28B, and the 10-K states that automotive qualification, zero-defect and functional-safety requirements, lengthy design-in and long product life cycles produce "significant barriers to entry". It is protected by switching costs and system-level breadth (multiple NXP devices plus enabling software), not by price: operating margin slid from 28.8% (FY2022) to 24.9% (FY2025) and the 10-K's own risk language concedes it may face lower prices and cannot cut costs in line. Competition is broad - both IDMs and fabless, with Analog Devices, Broadcom, Infineon, Microchip, Qualcomm, Renesas, STMicroelectronics and Texas Instruments named as primary public competitors, each overlapping only some product lines.
- ✓ 3. 10-Q takeaways
NXP's Q3 2026 (quarter ended 2026-09-27) was a clean operating quarter: revenue $3,786M, +19.3% YoY and +8.3% QoQ, GAAP gross margin 57.8% and GAAP operating margin 32.4% (non-GAAP 58.6%/37.1%), diluted GAAP EPS $3.48, with operating cash flow of $1,256M and non-GAAP free cash flow of $1,206M (31.9% of revenue). Q4 2026 guidance is numeric: revenue $3,750-3,950M, non-GAAP gross margin 58.5-59.5%, non-GAAP EPS $4.14-$4.58. Cash rose to $3,943M, net debt fell to $7,035M from $8,955M at 2025 year-end, and the board added a $5 billion buyback authorization on top of $1.3 billion remaining. The nine-month GAAP figures carry a $627M MEMS Sensors sale gain booked in Q1 2026, which is not in the Q3 result.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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