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Xperi Stock Rises 25% in 6 Months: What Should Investors Do?
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Xperi Inc. (XPER - Free Report) stock has gained 25.2%, underperforming the 48.9% rally of the industry and outperforming 11.1% growth of the Zacks S&P 500 composite over the past six months.
XPER’s performance is significantly higher than that of its industry peers, MediaAlpha, Inc. (MAX - Free Report) and VerifyMe, Inc. (VRME - Free Report) . MAX and VRME have declined 16.8% and 54% in the same period, respectively.
Six Months Price Performance
Image Source: Zacks Investment Research
As of the last trading session, the XPER stock closed at $10.2, marginally down from the 52-week high of $10.4. Xperi is trading above its 50-day moving average, indicating a bullish sentiment among investors.
Stock Trading Above 50-SMA
Image Source: Zacks Investment Research
Given this growth in the XPER stock, investors might be inclined to add this to their portfolio. The lingering question is whether they should do so. Let us find out.
XPER Gains From Connected Car Software Advertising Market
Per the Grand View Research report on the global market for connected car software advertising, the global market size was $84.7 billion in 2022 and is anticipated to grow, seeing a CAGR of 13.4% from 2023 to 2030. The U.S. Connected Car Market is expected to increase, witnessing a CAGR of 11.6% from 2023 to 2030. Technological advancements and rising disposable incomes across regions are expected to fuel the global market for the upcoming seven years.
The connected car technology is one of the key operating segments for XPER. In the third quarter of 2024, the company was awarded its second DTS AutoStage video design win by a Japanese automotive OEM, with deployments anticipated to begin in 2025. Furthermore, it signed an AutoStage license agreement with an American car company.
Apart from that, HD Radio is being developed in new models from Ford, Audi, Porsche, Aston-Martin and others. This shows that XPER is pushing its boundaries in the connected car segment, expecting to benefit from expanding the connected car software advertising market.
Consumer Shift to OTT & Streaming Benefits Xperi
The Internet Protocol Television (IPTV) service, which is part of XPER’s Pay-TV, is a customizable and cloud-enabled streaming video solution that allows operators to launch a branded, compliant and full-featured Pay-TV service. It benefits from shifting consumer preference from traditional TV experience to Over-the-top (OTT) and streaming.
OTT platforms, including Netflix and YouTube, have become mainstream content delivery vehicles. Statista anticipates the global OTT user number to increase 25.5% to 997.9 million from 2024 to 2029.
Over the past three quarters, IPTV subscribers have increased consistently. In the first quarter of 2024, it was 2 million, which increased to 2.3 million and 2.4 million in the second and third quarters, respectively. The consistent increase in subscribers in an expanding OTT platform market is expected to boost the company’s top line.
Xperi Stock Looks Cheap
The XPER stock looks inexpensive and appealing to investors. It is priced at 0.9 times forward 12-month sales per share, which is way lower than the industry’s average of 6.3 times. When looking at the trailing 12-month EV-to-EBITDA ratio, XPER is trading at 21.3 times, far below the industry’s average of 88.5 times.
Image Source: Zacks Investment Research
EPS Estimates Move North for XPER
The consensus estimate for 2024 earnings is pegged at 87 cents per share, suggesting a more than 100% surge from the prior year's actual. For 2025, the bottom line is pinned at 90 cents per share, hinting at a 3.5% year-over-year rise.
Add Xperi Stock to Your Portfolio Right Now
XPER is benefiting from the expanding connected car software advertising market. The top line is expected to grow on an increasing subscriber base in Xperi’s Pay-TV business, fueled by the shift of consumer preference to OTT. The stock looks cheap and its bottom-line growth is promising.
The aforementioned factors make us believe that the stock is a worthy candidate for your portfolio. Hence, investors should buy it right now.
Image: Bigstock
Xperi Stock Rises 25% in 6 Months: What Should Investors Do?
Xperi Inc. (XPER - Free Report) stock has gained 25.2%, underperforming the 48.9% rally of the industry and outperforming 11.1% growth of the Zacks S&P 500 composite over the past six months.
XPER’s performance is significantly higher than that of its industry peers, MediaAlpha, Inc. (MAX - Free Report) and VerifyMe, Inc. (VRME - Free Report) . MAX and VRME have declined 16.8% and 54% in the same period, respectively.
Six Months Price Performance
As of the last trading session, the XPER stock closed at $10.2, marginally down from the 52-week high of $10.4. Xperi is trading above its 50-day moving average, indicating a bullish sentiment among investors.
Stock Trading Above 50-SMA
Given this growth in the XPER stock, investors might be inclined to add this to their portfolio. The lingering question is whether they should do so. Let us find out.
XPER Gains From Connected Car Software Advertising Market
Per the Grand View Research report on the global market for connected car software advertising, the global market size was $84.7 billion in 2022 and is anticipated to grow, seeing a CAGR of 13.4% from 2023 to 2030. The U.S. Connected Car Market is expected to increase, witnessing a CAGR of 11.6% from 2023 to 2030. Technological advancements and rising disposable incomes across regions are expected to fuel the global market for the upcoming seven years.
The connected car technology is one of the key operating segments for XPER. In the third quarter of 2024, the company was awarded its second DTS AutoStage video design win by a Japanese automotive OEM, with deployments anticipated to begin in 2025. Furthermore, it signed an AutoStage license agreement with an American car company.
Apart from that, HD Radio is being developed in new models from Ford, Audi, Porsche, Aston-Martin and others. This shows that XPER is pushing its boundaries in the connected car segment, expecting to benefit from expanding the connected car software advertising market.
Consumer Shift to OTT & Streaming Benefits Xperi
The Internet Protocol Television (IPTV) service, which is part of XPER’s Pay-TV, is a customizable and cloud-enabled streaming video solution that allows operators to launch a branded, compliant and full-featured Pay-TV service. It benefits from shifting consumer preference from traditional TV experience to Over-the-top (OTT) and streaming.
OTT platforms, including Netflix and YouTube, have become mainstream content delivery vehicles. Statista anticipates the global OTT user number to increase 25.5% to 997.9 million from 2024 to 2029.
Over the past three quarters, IPTV subscribers have increased consistently. In the first quarter of 2024, it was 2 million, which increased to 2.3 million and 2.4 million in the second and third quarters, respectively. The consistent increase in subscribers in an expanding OTT platform market is expected to boost the company’s top line.
Xperi Stock Looks Cheap
The XPER stock looks inexpensive and appealing to investors. It is priced at 0.9 times forward 12-month sales per share, which is way lower than the industry’s average of 6.3 times. When looking at the trailing 12-month EV-to-EBITDA ratio, XPER is trading at 21.3 times, far below the industry’s average of 88.5 times.
EPS Estimates Move North for XPER
The consensus estimate for 2024 earnings is pegged at 87 cents per share, suggesting a more than 100% surge from the prior year's actual. For 2025, the bottom line is pinned at 90 cents per share, hinting at a 3.5% year-over-year rise.
Add Xperi Stock to Your Portfolio Right Now
XPER is benefiting from the expanding connected car software advertising market. The top line is expected to grow on an increasing subscriber base in Xperi’s Pay-TV business, fueled by the shift of consumer preference to OTT. The stock looks cheap and its bottom-line growth is promising.
The aforementioned factors make us believe that the stock is a worthy candidate for your portfolio. Hence, investors should buy it right now.
XPER sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.