Analog Semiconductors Stocks Q3 In Review: Magnachip (NYSE:MX) Vs Peers
Earnings results often indicate what direction a company will take in the months ahead. With Q3 behind us, let’s have a look at Magnachip (NYSE:MX) and its peers.
Demand for analog chips is generally linked to the overall level of economic growth, as analog chips serve as the building blocks of most electronic goods and equipment. Unlike digital chip designers, analog chip makers tend to produce the majority of their own chips, as analog chip production does not require expensive leading edge nodes. Less dependent on major secular growth drivers, analog product cycles are much longer, often 5-7 years.
The 15 analog semiconductors stocks we track reported a mixed Q3. As a group, revenues beat analysts’ consensus estimates by 0.8% while next quarter’s revenue guidance was 3.2% below.
While some analog semiconductors stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 5% since the latest earnings results.
Magnachip (NYSE:MX)
With its technology found in common consumer electronics such as TVs and smartphones, Magnachip Semiconductor (NYSE:MX) is a provider of analog and mixed-signal semiconductors.
Magnachip reported revenues of $66.46 million, up 8.5% year on year. This print exceeded analysts’ expectations by 3.8%. Overall, it was a strong quarter for the company with a significant improvement in its inventory levels and a solid beat of analysts’ adjusted operating income estimates.
YJ Kim, Magnachip’s CEO, commented, “Our Q3 revenue was at the high-end of guidance driven by broad-based growth in our Standard Product businesses, which is comprised of our MSS and PAS businesses. Standard Product revenue increased 25.9% sequentially and 24% year-over-year. Our discrete Power business benefited from leaner inventory in distribution channels as well as new product designs wins resulting in better-than-seasonal growth. In MSS, the strong sequential growth was due to increased demand for products targeted for China smartphone OEMs, automotive displays, and OLED IT.”
Magnachip Total Revenue
Magnachip achieved the biggest analyst estimates beat of the whole group. The results were likely priced in, however, and the stock is flat since reporting. It currently trades at $4.44.
Founded by Caltech professor Carver Mead and one of his students Chris Diorio, Impinj (NASDAQ:PI) is a maker of radio-frequency identification (RFID) hardware and software.
Impinj reported revenues of $95.2 million, up 46.4% year on year, outperforming analysts’ expectations by 2.5%. The business had a very strong quarter with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ adjusted operating income estimates.
Impinj Total Revenue
Impinj pulled off the fastest revenue growth among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 14.9% since reporting. It currently trades at $188.21.
Named after the founder's ancestral village in present-day Lithuania, Vishay Intertechnology (NYSE:VSH) manufactures simple chips and electronic components that are building blocks of virtually all types of electronic devices.
Vishay Intertechnology reported revenues of $735.4 million, down 13.9% year on year, falling short of analysts’ expectations by 1.8%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations.
Vishay Intertechnology delivered the weakest full-year guidance update in the group. Interestingly, the stock is up 8.5% since the results and currently trades at $18.50.
Founded in 1997 by its longtime CEO Michael Hsing, Monolithic Power Systems (NASDAQ:MPWR) is an analog and mixed signal chipmaker that specializes in power management chips meant to minimize total energy consumption.
Monolithic Power Systems reported revenues of $620.1 million, up 30.6% year on year. This number beat analysts’ expectations by 3.3%. Overall, it was a strong quarter as it also put up a significant improvement in its inventory levels and a decent beat of analysts’ adjusted operating income estimates.
The stock is down 36.5% since reporting and currently trades at $584.
A leading supplier of parts for electronics such as home appliances, Power Integrations (NASDAQ:POWI) is a semiconductor designer and developer specializing in products used for high-voltage power conversion.
Power Integrations reported revenues of $115.8 million, down 7.7% year on year. This print beat analysts’ expectations by 0.9%. It was a strong quarter as it also produced a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ adjusted operating income estimates.
The stock is flat since reporting and currently trades at $66.80.
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), has fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty heading into 2025.
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