For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.
Another factor that can influence investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.
What if you'd invested in NXP Semiconductors (NXPI) ten years ago? It may not have been easy to hold on to NXPI for all that time, but if you did, how much would your investment be worth today?
NXP Semiconductors' Business In-Depth
With that in mind, let's take a look at NXP Semiconductors' main business drivers.
NXP Semiconductors N.V. provides high performance mixed signal and standard product solutions that leverage its RF, analog, power management, interface, security, as well as digital processing expertise. These solutions are used in a wide range of applications, namely automotive, wireless infrastructure, lighting, industrial, mobile, consumer and computing.
NXP seems to be well positioned to capitalize on the level 2-5 automotive market. Its safety products for advanced driver assistance systems (ADAS) and other key categories of autonomous vehicles — namely Connectivity, Powertrain & Vehicle Dynamics, Body & Comfort as well as Connected Infotainment — have been gaining momentum.
Additionally, the company is the leader in general purpose microcontrollers and application processors in industrial and IoT markets. In the mobile segment, NXP is the leader in mobile payments. The company offers the full scope of mobile wallet development with mWallet 2GO, which is a big positive. It addresses user demands to quickly enable payment devices by digitizing their bank cards and experience smooth transactions at the Point-of-Sale.
Total revenues were $11.1 billion in 2021, up 28% from 2020. The company derives revenues from four end markets — Automotive, Industrial & IoT, Mobile, as well as Communication Infrastructure & Others, which generated 49.6%, 21.8%, 12.8% and 15.8% of total revenues in 2021, respectively.
Revenues from Automotive, Industrial & IoT, Mobile, and Communication Infrastructure end markets increased 44%, 31%, 13% and 3% year over year, respectively.
Built on more than 60 years of combined experience and expertise, the company has approximately 29,000 employees in more than 30 countries.
NXP competes with many different semiconductor companies. The company faces stiff competition from other well-established players in the semiconductor space, including ON Semiconductor Corporation, Analog Devices and Microchip Technology Incorporated.
While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in NXP Semiconductors ten years ago, you're probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in November 2012 would be worth $7,354.78, or a gain of 635.48%, as of November 17, 2022, and this return excludes dividends but includes price increases.
Compare this to the S&P 500's rally of 191.11% and gold's return of -0.46% over the same time frame.
Looking ahead, analysts are expecting more upside for NXPI.
NXP Semiconductors reported third quarter results wherein both earnings and revenues grew year over year. Strong demand environment across the end-markets drove the results. The company continued to benefit from strong position in secular growth markets, including automotive, industrial & IoT, as well as communication infrastructure. Notably, solid momentum in RF power for base stations remains a tailwind. Strength in auto radar systems, auto domain and zonal processors, and auto electrification systems is a positive. Also, rising 5G network deployments are driving growth in its communication business. Considering the aforesaid facts, we expect 2022 total revenues to be up 18.7% from 2021. However, uncertainties related to the ongoing coronavirus pandemic remain major headwinds. Further, softness in the mobile market remains a concern.
Over the past four weeks, shares have rallied 18.09%, and there have been 12 higher earnings estimate revisions in the past two months for fiscal 2022 compared to none lower. The consensus estimate has moved up as well.
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