Jefferies has revised its outlook on Nordic Semiconductor (NDCVF, Financial), moving its rating from Buy to Underperform. The adjustment comes with a new price target of NOK 102, reduced from NOK 164. The firm suggests that current market projections for 2026 may be overly optimistic, now that inventory levels have stabilized across Nordic's sectors. As a result, Jefferies anticipates a decrease in growth expectations for 2026 and predicts the stock may underperform during the next year.
NDCVF Key Business Developments
Release Date: April 29, 2025
- Revenue: $155 million in Q1 2025, more than doubling year-over-year.
- Gross Margin: Approximately 50%, in line with guidance.
- EBITDA Margin: 9.5%, third consecutive quarter of improvement.
- Cash Operating Expenses: $62 million in Q1 2025, down from $70 million in Q4 2024.
- Net Cash Flow: Approximately $20 million generated in Q1 2025.
- Inventory: Decreased by $28 million to $144 million.
- Short Range Revenue: $146 million, up from $140 million in Q4 2024.
- Long Range Revenue: $8 million, up from $7 million in Q4 2024.
- Consumer Revenue: $88 million, up from $51 million in Q1 2024.
- Industrial and Healthcare Revenue: $60 million, up from $20 million in Q1 2024.
- Employee Count: 1,324 employees, a reduction of 6% year-over-year.
- CapEx: $1.8 million, or 1% of revenue.
- Guidance for Q2 2025: Revenue range of $145 million to $165 million, with gross margin expected to remain around 50%.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Nordic Semiconductor ASA (NDCVF, Financial) reported a strong revenue of $155 million for Q1 2025, more than doubling from the previous year.
- The company maintained a healthy gross margin of around 50%, in line with their guidance.
- Nordic Semiconductor ASA (NDCVF) is seeing high design activity with their new nRF54 series, which is expected to drive future growth.
- The company is expanding its long-range business with the nRF9151 launch, including satellite communications capabilities.
- Nordic Semiconductor ASA (NDCVF) has formed strategic partnerships, such as with Deutsche Telekom, to enhance connectivity solutions.
Negative Points
- The company faces increased macroeconomic uncertainty due to changes in international trade policies.
- Revenue from the broad market remains 40% below peak levels, indicating a need to regain traction.
- The transition from the nRF52 and nRF53 series to the nRF54 series is creating a timing gap in product certifications.
- Despite improvements, the EBITDA margin is still at 9.5%, below the long-term target of 25%.
- The weakening of the US dollar compared to NOR and EUR may negatively impact future financial results.
