NXP Semiconductors (NXPI) Laps the Stock Market: Here's Why

In the latest close session, NXP Semiconductors (NXPI) was up +2.74% at $228.50. The stock exceeded the S&P 500, which registered a gain of 0.46% for the day. At the same time, the Dow added 0.56%, and the tech-heavy Nasdaq gained 0.45%.

Shares of the chipmaker witnessed a loss of 6.4% over the previous month, beating the performance of the Computer and Technology sector with its loss of 0%, and underperforming the S&P 500's gain of 2%.

Market participants will be closely following the financial results of NXP Semiconductors in its upcoming release. In that report, analysts expect NXP Semiconductors to post earnings of $4.13 per share. This would mark year-over-year growth of 32.8%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.76 billion, up 18.52% from the year-ago period.

NXPI's full-year Zacks Consensus Estimates are calling for earnings of $15.15 per share and revenue of $14.23 billion. These results would represent year-over-year changes of +28.28% and +15.98%, respectively.

Investors might also notice recent changes to analyst estimates for NXP Semiconductors. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Currently, NXP Semiconductors is carrying a Zacks Rank of #3 (Hold).

In terms of valuation, NXP Semiconductors is currently trading at a Forward P/E ratio of 14.68. This denotes a discount relative to the industry average Forward P/E of 33.03.

We can additionally observe that NXPI currently boasts a PEG ratio of 0.69. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. NXPI's industry had an average PEG ratio of 0.69 as of yesterday's close.

The Semiconductor - Analog and Mixed industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 24, which puts it in the top 10% of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow NXPI in the coming trading sessions, be sure to utilize Zacks.com.

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This article originally published on Zacks Investment Research (zacks.com).

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