The average target price of NVTS is 4.1 and suggests 30% downside potential. Usually, this means a SELL recommendation among investment firms, or a recommendation to decrease one's position in this instrument in the next 12 months. The most optimistic analyst has a target price of 7.0. This translates into 19% upside potential in the best case. On the other hand, the most pessimistic analyst has a target price of 1.5. This is equivalent to 74% downside potential in the worst case. 

Navitas Semiconductor Corporation designs, develops, and sells gallium nitride (GaN) power integrated circuits in China, the United States, Taiwan, Korea, and internationally. The company was incorporated in 2013 and is based in Dublin, Ireland.

Ireland

Navitas Semiconductor Corporation

Technology

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

NVTS reported revenue of USD 74mn in the last 12 months, down 11% from FY24. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 15% from FY24 to USD -0.52. Market expects EPS to reach USD -0.28 in FY25.

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). The stock has outperformed this peer group by 79ppts over past six months and grown 30ppts slower in the past month. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is positive. Usually, this means that a fairly valued or slightly undervalued stock has become more 'expensive', indicating that the market, in general, may have gained short-term confidence in the stock.

The company has reported very poor EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to -143.5% in the last 12 months, a decline from -122.3% in FY23. 

Historically, NVTS has reported very poor net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled -131.8%, a growth from -183.7% in FY23. 

Another important profitability metric, return on assets (RoA), amounted to -22.8% in the last 12 months, an increase from -32.0% in FY23. The market analysts predict that RoA will be -41.5% in FY24, again weaker than its peers. 

In the last 12 months, the return on capital employed (RoCE) grew to -24.9%, below the peers. The consensus estimate for FY24 for RoCE is -37.6%, again behind the peers. 

Navitas Semiconductor Corporation reported a return on equity (RoE) of -27.1% in the last 12 months, up from -38.2% in FY23. The market consensus projects an RoE of -52.9% in FY24, again behind its peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -2.5 in the past several years. This ratio implies a fragile shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

NVTS has above average trading liquidity. The average private investor can sell his common position in the stock immediately. Liquidity is very unstable and remains extremely favourable on the days with the lowest activity. However, please consider that under highly turbulent market conditions, the trading volume tends to decrease significantly. 

No other major risks have been identified.

The risk of default is high. Among the negative credit factors, we point to bleak profitability, negligible return on capital, inadequate interest coverage, and poor cash flow generation. We note resilient historical revenue growth, low margin volatility, and an favourable capital structure, among the positive credit factors. 

In highly turbulent market conditions, NVTS is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, NVTS is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from critical to immense. 

Based on key historical and expected multiples, the stock is overvalued relative to its peers. 

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Navitas Semiconductor Corporation

$ 5.87

2

Navitas Semiconductor Corporation

$ 5.87

2

Risk factor

Profitability factor

Risk / Profitability

About

About

Risk factor

Profitability factor

$ 5.87

About

About

Navitas Semiconductor Corporation

$ 5.87

2

Navitas Semiconductor Corporation

$ 5.87

2

Risk factor

Profitability factor

Risk / Profitability

About

About

Risk factor

Profitability factor

$ 5.87

About

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