QS Research · Michael Burry's Scion Capital analyst template · 2006
NXP Semiconductors N.V. (NXPI)
As of 2026-11-06 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction medium · base case +17% · downside -19% · upside +31%
The market is pricing NXPI as a levered cyclical at 13.2x TTM EBITDA (N27) and 19.5x P/E (N29), even though TTM FCF is $3.50B (N18) and a 5.6% FCF yield (N30), while Q3 2026 net debt fell to $7.035B (S28); the closest scale peer, ADI, trades at 33.6x EBITDA on almost identical revenue/EBITDA (S1). My base value is the midpoint of $278 (5.0% FCF yield on $3.50B, N18/N30) and $304 (15.8x TTM EBITDA of $5.32B, N14, less ~$7.31B net debt, N21/N22/N23, on 252.05M shares, N5), about $291 or +16.6% vs $250 (N1). Downside at 11x EBITDA is ~$203 (-18.8%); upside at STM's 16.9x is ~$328 (+31.2%) (S1, N14, N1). That fails the long rule because the base case is below +30%, so I call it a watch, not a long; the $5B buyback, VW SDV win and data-center growth are what could make the base case grow into a long (S5, S62, S58).
Key numbers
- Share price: $250.00
- Market cap: $63.01B
- Latest financial period: TTM to Sep 27, 2026
- Revenue (TTM): $13.80B
- EV / EBITDA (TTM): 13.2x
- P/E (TTM): 19.5x
- Price / book: 5.21x
The 15 boxes
- ✓ 1. Long-form business notes
NXP reports one reportable segment and sells semiconductor products into Automotive, Industrial & IoT, Mobile, and Communication Infrastructure & Other, using direct sales plus distributors. FY2025 revenue was $12,269 million versus $12,614 million in FY2024; FY2025 operating income was $3.05 billion, operating cash flow $2.82 billion, and capex $397.0 million. The oldest annual report here (FY2020) showed revenue of $8,612 million, and the newest (FY2025) shows a larger portfolio after the TTTech Auto, Aviva Links, and Kinara acquisitions plus 300mm joint-venture capacity plans.
- ✓ 2. Competitive advantage
NXPI's advantage looks real but bounded. It sells into sockets that require stringent qualification, zero-defect quality and long design-in timeframes, which the 10-K calls 'significant barriers to entry', and it is asked to deliver whole system solutions (multiple NXP devices plus software), not just a chip. But it names eight large competitors and says it competes on features, quality, warranty, availability and cost, so pricing power is not evident. The record supports scale-cost economics, not franchise pricing: gross profit of $6.72B on $12.27B revenue in FY2025 (~55%), operating income $3.05B, operating cash flow $2.82B against capex of only $397M — yet revenue fell from $13.28B in FY2023 to $12.27B in FY2025 and gross profit fell from $7.55B to $6.72B over the same two years.
- ✓ 3. 10-Q takeaways
Q3 2026 (quarter ended 2026-09-27) revenue was $3,786 million, up 19.3% year-on-year and 8.3% quarter-on-quarter and slightly ahead of management's expectations, with GAAP gross margin of 57.8% and GAAP operating margin of 32.4% (non-GAAP 58.6% and 37.1%). Cash conversion was strong: Q3 operating cash flow $1,256 million against only $50 million of net capex gave $1,206 million of non-GAAP free cash flow, which funded $359 million of dividends and buybacks in the quarter. The YTD picture is flattered by a one-off: YTD 2026 other income of $613 million is mainly the $627 million gain on the MEMS Sensors divestiture, so the 36.4% YTD GAAP operating margin is not a clean operating number. Balance sheet improved — cash $3,943 million, total debt $10,978 million, net debt down to $7,035 million from $8,955 million at 2025-12-31.
- ✓ 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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