NXP Semiconductors N.V. (NASDAQ:NXPI)

The analyzed financial data reveals several notable trends in valuation ratios over the observed periods.

Price to earnings (P/E) ratio

The P/E ratio data is missing for the initial four quarters but starts at an extremely high 950.99 in the quarter ending April 4, 2021. This figure dramatically decreases in each subsequent period, falling to 131.66, then to 53.83, 34.81, 26.86, 21.5, and finally 18.71 by the quarter ending July 3, 2022. This sharp reduction indicates either a significant increase in earnings or a normalization of market expectations, suggesting the stock became more reasonably priced relative to earnings over time.

Price to operating profit (P/OP) ratio

Similar to the P/E ratio, the P/OP ratio was not recorded in the earlier periods but commenced at a high 118.31 at the quarter ending April 4, 2021. It then shows a consistent downward trend to 66.61, 35.78, 24.53, 19.46, 15.77, and 13.74 by the last quarter. This steady decline reflects improving operating profitability or better valuation by the market, indicating enhanced operational performance or increased investor confidence in operating income generation.

Price to sales (P/S) ratio

The P/S ratio begins at 5.74 in April 2021 and experiences slight fluctuations thereafter, rising marginally to 6.12 in July 2021 before decreasing gradually to 3.71 by July 2022. This downward trend shows a reduction in valuation relative to sales, which might reflect slower sales growth expectations or improved sales figures reducing the relative stock price.

Price to book value (P/BV) ratio

Unlike the other ratios, the P/BV ratio is consistently recorded throughout the time series from March 29, 2020, to July 3, 2022. It exhibits a rising trend from 3.04 in March 2020 to a peak of 8.15 in October 2021. After this peak, it begins a moderate decline to 7.7, then 7.18, and finally 6.58 by July 2022. The initial rise suggests increasing market valuation of the company’s net assets, potentially driven by growth prospects or asset revaluations, while the subsequent decline could indicate market correction or stabilization of asset valuations.

Overall, the valuation ratios collectively indicate a phase of high market optimism in early 2021, particularly for earnings and operating profit metrics, followed by a steady normalization throughout 2021 and into mid-2022. The sustained decrease in P/E and P/OP ratios reflects improving profitability or tempered market expectations, while the P/BV ratio’s rise and partial fall suggest shifting investor perceptions about the company’s net asset values. The declining P/S ratio in the later periods signals a more conservative valuation relative to sales revenue, possibly tied to growth rate adjustments or competitive dynamics.

The share price of the company exhibited a consistent upward trend from March 29, 2020, through July 4, 2021, increasing from $98.34 to a peak of $210.53. Following this peak, the share price showed a gradual decline, dropping to $174.46 by July 3, 2022. This pattern indicates a strong growth phase followed by a moderate correction in the market valuation during the most recent periods.

Earnings per share (EPS) data, available from April 4, 2021, onward, demonstrates a robust upward trajectory. Starting from a modest $0.19, EPS surged significantly over the subsequent quarters, reaching $9.32 by July 3, 2022. This substantial increase in EPS suggests improved profitability and operational performance over the examined periods.

The Price-to-Earnings (P/E) ratio, also available from April 4, 2021, exhibits a notable downward trend. Initially extremely high at 950.99, the ratio declined sharply to 18.71 by July 3, 2022. This reduction in P/E ratio reflects a combination of the marked increase in earnings and a stabilizing share price, indicating that the market is adjusting to the company's increased profitability and potentially perceiving the stock as more fairly valued over time.

Summary of Trends:

The company experienced significant growth in stock price until mid-2021, followed by a correction phase.

Profitability, as measured by EPS, increased dramatically, especially from early 2021 to mid-2022.

The P/E ratio decreased substantially, reflecting a market reassessment aligned with increased earnings and a moderating share price.

Share Price Trend

The share price exhibited a consistent upward trajectory from March 29, 2020, to July 4, 2021, increasing from $98.34 to a peak of $210.53. Following this peak, the price showed a gradual decline, decreasing to $174.46 by July 3, 2022. This suggests an initial period of strong market confidence or positive developments, followed by a moderate correction or market pressure in the later periods.

Operating Profit per Share Development

Operating profit per share began to be reported from April 4, 2021, starting at $1.51 and demonstrating a pronounced growth trend through subsequent quarters. By July 3, 2022, this metric had increased substantially to $12.70, indicating a significant improvement in operational profitability on a per-share basis.

Price to Operating Profit Ratio (P/OP)

The P/OP ratio showed a marked decrease over the same period that operating profit per share rose. It started at a high level of 118.31 in April 2021 and steadily declined to 13.74 by July 2022. This declining ratio suggests a convergence of share price with improving earnings, reflecting a market reassessment that the stock is becoming more fairly valued relative to its operating profitability.

Overall Interpretation

The data indicates that the company experienced significant improvement in operational profitability beginning in early 2021. This improvement was initially capitalized on by the market, as seen in the rising share price. However, as operating profits continued to increase robustly, the share price corrected downward somewhat, leading to a more reasonable valuation in terms of the P/OP ratio. This pattern reflects enhanced profitability driving value recognition but also a recent tempering of market expectations or profit taking.

Share Price Trend

Initially, the share price demonstrates a strong upward trajectory from March 2020 to July 2021, increasing from 98.34 US$ to a peak of 210.53 US$. Following this peak, there is a noticeable decline reaching 174.46 US$ by July 2022. This suggests a period of growth succeeded by a correction or market adjustment in the latter periods.

Sales Per Share Trend

Sales per share data is available starting from April 2021, showing a consistent upward trend from 31.09 US$ to 47.02 US$ by July 2022. This steady increase signifies ongoing growth in revenue generation per share over the reported periods.

Price-to-Sales (P/S) Ratio Trend

The P/S ratio peaks at 6.12 in July 2021 and thereafter declines steadily to 3.71 by July 2022. This decline in P/S ratio, despite increasing sales per share, indicates that the share price growth is not keeping pace with sales growth, resulting in lower valuation multiples over time.

Overall Analysis

The combined trends reflect a phase of strong share price appreciation until mid-2021, aligned with increasing sales per share. However, the subsequent period shows a moderation in the share price alongside continued growth in sales per share, leading to a compressed P/S ratio. This pattern could be interpreted as market recalibration of valuation levels with respect to improving sales performance.

The analysis of the quarterly financial data reveals distinct trends in the share price, book value per share (BVPS), and price-to-book value (P/BV) ratio over the observed periods.

Share Price

The share price exhibits a general upward trend from March 29, 2020, through July 4, 2021, rising from $98.34 to a peak of $210.53. This represents more than a twofold increase within this timeframe. However, following this peak, the share price begins to decline steadily, decreasing to $174.46 by July 3, 2022. The post-peak decline suggests some market correction or changing investor sentiment after a period of significant appreciation.

Book Value Per Share (BVPS)

BVPS shows a declining pattern across most quarters, starting from $32.38 in March 2020 and reducing to a low of $24.79 in April 2022. An exception occurs towards the last quarter where a slight increase is noted, with BVPS rising to $26.51 by July 2022. The overall downward trend indicates potential pressure on the company's net asset value or equity base during this period, despite the fluctuations seen.

Price-to-Book Value (P/BV) Ratio

The P/BV ratio trends upwards consistently from 3.04 in March 2020 to a high of 8.15 in October 2021, reflecting the rapid increase in share price disproportionate to the BVPS decline. Following the peak, the P/BV ratio decreases but remains elevated compared to the initial period, standing at 6.58 by July 2022. This elevated P/BV ratio implies investors have assigned a relatively high premium to the stock compared to its book value throughout most periods analyzed, likely driven by growth expectations or market optimism.