On June 10, 2026, we present a DCF analysis for NXP Semiconductors NV NXPI, a company that has shown significant price performance over the past year. The stock has experienced a year-to-date increase of 37.7% and a one-year increase of 42.2%. However, it has recently faced a decline of 8.1% over the past week.
- DCF Earnings-based intrinsic value of $408.72 vs current price of $297.41 (margin of safety: 29.3%)
- DCF FCF-based intrinsic value of $141.52 vs current price (significantly overvalued)
- GF Scoreâ„¢ of 91/100 indicates high reliability of the DCF inputs
What Is NXPI Worth? DCF Earnings-Based Model
The DCF earnings-based model for NXP Semiconductors NV uses a two-stage approach to estimate the intrinsic value of the stock. In the first stage, we assume a robust growth rate of 21.0% for the next ten years, after which we transition to a terminal growth rate of 4% for the following decade. The discount rate applied is 11%, which combines the risk-free rate and equity risk premium.
| Parameter | Value |
|---|---|
| Current EPS (TTM, excl. non-recurring) | $12.23 |
| 10-Year Growth Rate | 21.0% |
| 10-Year Treasury Rate | 4.53% |
| Discount Rate (ceil(Treasury) + 6%) | 11% |
| Terminal Growth Rate | 4% |
The calculation summary for the two-stage model is as follows:
| Stage | Description | Value |
|---|---|---|
| Growth Stage (Years 1-10) | EPS growing at 21.0%, discounted at 11% | $202.64 |
| Terminal Stage (Years 11-20) | 4% terminal growth, discounted at 11% | $206.08 |
| Intrinsic Value | Growth + Terminal | $408.72 |
With the current price at $297.41 and the intrinsic value calculated at $408.72, NXPI appears to be modestly undervalued, offering a margin of safety of 29.3%. It is important to note that GuruFocus uses EPS excluding non-recurring items, as research indicates that stock prices correlate more closely with earnings than with free cash flow. For further details, you can visit the NXPI DCF Calculator.
What Does the Free Cash Flow DCF Say?
The free cash flow (FCF) based intrinsic value for NXPI is calculated at $141.52. This value significantly contrasts with the earnings-based intrinsic value of $408.72, indicating a divergence in valuation perspectives. The FCF model suggests that the stock is significantly overvalued, with a margin of safety of -110.2%.
How Does GF Valueâ„¢ Compare to the DCF Models?
The GF Valueâ„¢ for NXP Semiconductors NV is $229.50, providing a third perspective on valuation. GF Valueâ„¢ is GuruFocus' proprietary measure derived from historical trading multiples, past business growth, and future performance estimates. The three models present differing views on valuation, with the DCF earnings model suggesting undervaluation, the FCF model indicating overvaluation, and GF Valueâ„¢ also suggesting overvaluation. For more information, visit the GF Valueâ„¢ page.
What Does NXPI's GF Scoreâ„¢ Tell Us?
The GF Scoreâ„¢ ranks stocks from 0 to 100 based on five key aspects: Financial Strength, Profitability, Growth, Valuation, and Momentum. Stocks with higher GF Scoreâ„¢ values have been found to generate higher long-term returns based on backtesting from 2006 to 2021. The current GF Scoreâ„¢ for NXPI is 91/100, indicating strong performance across these metrics.
| Metric | Rating |
|---|---|
| GF Scoreâ„¢ | 91/100 |
| Financial Strength | 6/10 |
| Profitability | 9/10 |
| Growth | 9/10 |
| Valuation | 5/10 |
| Momentum | 10/10 |
With a predictability rank of 0/5 stars, it is important to note that higher predictability ratings typically lead to more reliable DCF estimates. For further insights, visit the NXPI stock page.
Key Assumptions and Limitations
It is essential to recognize that DCF models are highly sensitive to the assumptions made regarding growth rates and discount rates. Stocks with low predictability ratings, such as NXPI, tend to produce less reliable DCF estimates. The terminal growth rate of 4% is also a simplifying assumption that may not reflect actual future performance.
What This Means for Investors
In synthesizing the three valuation models—DCF earnings, DCF FCF, and GF Value™—we find that there are conflicting signals regarding NXPI's valuation. While the DCF earnings model suggests that the stock is modestly undervalued, the DCF FCF model indicates significant overvaluation, and the GF Value™ also suggests overvaluation. Overall, the consensus leans towards a conclusion of overvaluation. For the full DCF analysis, visit the NXPI DCF Calculator. You can also explore the GF Value™ page, or use the GuruFocus Stock Screener to find undervalued predictable companies.
Frequently Asked Questions
What is NXPI's intrinsic value based on DCF?
According to the DCF analysis, the earnings-based intrinsic value is $420.83, while the FCF-based intrinsic value is $141.52.
Is NXPI overvalued or undervalued?
Based on the DCF earnings model, NXPI is modestly undervalued, while the DCF FCF model and GF Valueâ„¢ suggest it is overvalued.
How reliable is the DCF model for NXPI?
The DCF model's reliability for NXPI is limited, as indicated by its predictability rank of 0/5 stars.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
