DCF Studio

    NXPI · NMS · Technology

    NXP Semiconductors N.V.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 59.18

    Market price

    USD 227.99

    Implied upside

    -74.0%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case

    Value Per Share

    Perpetuity growth
    USD 59.18-74.0%
    Exit multiple
    USD 156.19-31.5%
    Market price
    USD 227.99

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn3bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 12.0bnUSD 11.7bnUSD 11.4bnUSD 11.1bnUSD 10.9bn-2.4%
    EBITUSD 3.3bnUSD 3.2bnUSD 3.1bnUSD 3.0bnUSD 2.9bn-2.4%
    NOPATUSD 2.7bnUSD 2.6bnUSD 2.6bnUSD 2.5bnUSD 2.5bn-2.4%
    Add depreciation & amortisationUSD 955.1mUSD 932.0mUSD 909.4mUSD 887.4mUSD 865.9m-2.4%
    Less capital expenditureUSD -843.8mUSD -823.3mUSD -803.4mUSD -784.0mUSD -765.0m-2.4%
    Less increase in working capitalUSD -297.0mUSD -289.8mUSD -282.8mUSD -276.0mUSD -269.3m-2.4%
    Free cashflow to firmUSD 2.5bnUSD 2.5bnUSD 2.4bnUSD 2.3bnUSD 2.3bn-2.4%
    Discount factor0.94550.84510.75550.67530.6036-
    Present valueUSD 2.4bnUSD 2.1bnUSD 1.8bnUSD 1.6bnUSD 1.4bn-12.8%
    Present Value Of The ForecastUSD 9.3bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.00%US 10-year Treasury (^TNX)
    Equity risk premium5.50%Market assumption
    Beta1.547Reported 1.817, pulled toward 1.0 (Blume)
    Cost of equity13.51%Risk-free + beta x equity risk premium
    Cost of debt5.00%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationUSD 57.5bn82.5% of capital
    Total debtUSD 12.2bn17.5% of capital, book value as a proxy
    Tax rate16.7%Effective, capped at statutory
    WACC11.87%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 59.18

    62% of EV

    Forecast FCFF, final year
    USD 2.3bn
    Capex at depreciation, working capital in reinvestment
    USD 2.7bn
    Less reinvestment at g/ROIC (16.7% of NOPAT)
    USD -459.7m
    Capitalised
    USD 2.3bn
    ROIC (reported)
    14.9%
    Terminal value, undiscounted
    USD 25.0bn
    Terminal value, discounted
    USD 15.1bn
    Enterprise value
    USD 24.4bn
    Less net debt
    USD 9.3bn
    Equity value
    USD 15.1bn

    Exit at 17.3x EBITDA

    Value per shareUSD 156.19

    81% of EV

    Terminal value, undiscounted
    USD 65.9bn
    Terminal value, discounted
    USD 39.8bn
    Enterprise value
    USD 49.0bn
    Less net debt
    USD 9.3bn
    Equity value
    USD 39.7bn

    Spread between methods: 90%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    9.87%78.4580.6983.2086.0489.30
    10.87%66.6968.1569.7671.5573.55
    11.87%57.2058.1559.1860.3061.53
    12.87%49.3849.9850.6351.3252.06
    13.87%42.8243.1943.5843.9844.40

    Outlined: this model. Green text: above today's price of 227.99. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputModelImpliedGap
    Revenue growth, every year-2.4%17.5%+19.9pp
    EBIT margin27.2%76.9%+49.7pp
    Discount rate11.9%5.7%-6.2pp
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.