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For the fourth quarter of 2024, net revenues are expected to be between $18 million and $20 million. The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $19.13 million, suggesting a year-over-year decline of 26.59%.
The consensus mark for loss is pegged at 6 cents per share for the fourth quarter of 2024, which remained unchanged over the past 30 days. NVTS reported earnings of 4 cents per share in the year-ago quarter.
Navitas Semiconductor Corporation Price and EPS Surprise
NVTS’ earnings were in line with the Zacks Consensus Estimate in two of the trailing four quarters, missing in one and beating in the remaining one, the average negative surprise being 7.5%.
Let’s see how things have shaped up for this announcement.
Key Factors to Note for NVTS Earnings
Navitas’ fourth-quarter performance has benefited from its three key markets, which include AI data centers, mobile and electric vehicles (EVs). These markets are anticipated to have driven substantial revenue growth in the to-be-reported quarter.
Navitas has a robust customer pipeline valued at over $1.6 billion, with numerous design wins across multiple sectors. This strong pipeline is expected to have driven continued demand for the company’s GaN and silicon carbide solutions, particularly in AI, mobile, EVs, and solar energy, in the fourth quarter.
Navitas mobile business saw a record performance in the third quarter of 2024, and this momentum is anticipated to have continued in the fourth quarter of 2024 as well. Growth in mobile is expected to help offset challenges in other areas, providing stable revenues for the company. The increasing adoption of GaN technology in mobile fast chargers remains a key growth driver.
However, the dynamic nature and short lead times for the mobile business and the customer project delays are expected to have hurt NVTS’ top line in the to-be-reported quarter.
The company has also been suffering from a challenging macroeconomic environment, with continued softness in some of the end markets. An unfavorable product mix might have hurt the fourth quarter of 2024 gross margin, which is expected to be 40% (+/- 50 basis points).
NVTS Trading at a Premium
Navitas shares have plunged 49.8% in the trailing 12-month period against the Zacks Computer & Technology sector’s 26.3% return and the Zacks Electronics Semiconductors industry’s appreciation of 55.5%.
NVTS Underperforms Sector, Industry
Image Source: Zacks Investment Research
Shares of this gallium nitride (GaN) power ICs and silicon carbide (SiC) technology provider have underperformed industry peers, including Broadcom (AVGO - Free Report) and Credo Technology (CRDO - Free Report) , in the trailing 12-month period. Shares of Broadcom and Credo have appreciated 85.3% and 226.7%, respectively, over the same time frame.
The Navitas stock is also not so cheap, as the Value Score of F suggests a stretched valuation at this moment.
NVTS stock is trading at a premium with a forward 12-month Price/Sales of 6.92X compared with the sector’s 6.62X.
Price/Sales (F12M)
Image Source: Zacks Investment Research
Navitas and Infineon Partner to Boost GaN Adoption
In the third quarter of 2024, Navitas announced a strategic partnership with Infineon (IFNNY - Free Report) to align on common GaN specifications, allowing customers to dual-source GaN components.
This collaboration with Infenion is expected to accelerate GaN adoption in high-volume markets like data centers, EVs, and power electronics, providing customers with increased confidence in supply chain stability.
Cost Reduction Plan to Aid NVTS’ Profitability
Navitas’ cost-reduction plan is expected to save $2 million per quarter and streamline the enterprise with an increased focus on Al data centers, EVs and mobile applications. The company’s plan includes a 14% reduction in headcount.
Adjusted operating expenses are expected to decline by roughly $20.5 million in the fourth quarter of 2024.
Navitas expects to realize the full benefit of the cost savings in the first half of 2025, which is expected to help the company generate profit.
Navitas’ Prospects Ride on Expanding Portfolio
Navitas’ expanding portfolio is a major driver in the GaN and SiC market, which is currently worth more than $22 billion. Its strong portfolio of more than 300 patents (issued or pending) across GaN power circuitry, analog and digital integration, and SiC device design and fabrication is noteworthy.
Through its latest GaNSafe family, NVTS is expanding its power capabilities into AI data centers, EV chargers and next-generation solar microinverters.
The launch of a new low-voltage GaN technology optimized for 48-volt systems is noteworthy. It gives Navitas more content and complete solutions for AI data centers and next-generation EV platforms and opens up new markets like AI-based robotics.
The company believes this new 80-volt to 200-volt range creates an additional $1 billion market opportunity in the future.
NVTS: Smart Buy or Risky Bet
Given the challenging macroeconomic environment, Navitas’ prospects remain cloudy in the near term. Unfavorable revenue mix due to high mobile content is expected to keep gross margin under pressure. Stretched valuation also remains a concern.
Image: Bigstock
Navitas Stock Before Q4 Earnings: A Smart Buy or Risky Investment?
Navitas Semiconductor (NVTS - Free Report) is set to release its fourth-quarter 2024 results on Feb. 24.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
For the fourth quarter of 2024, net revenues are expected to be between $18 million and $20 million. The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $19.13 million, suggesting a year-over-year decline of 26.59%.
The consensus mark for loss is pegged at 6 cents per share for the fourth quarter of 2024, which remained unchanged over the past 30 days. NVTS reported earnings of 4 cents per share in the year-ago quarter.
Navitas Semiconductor Corporation Price and EPS Surprise
Navitas Semiconductor Corporation price-eps-surprise | Navitas Semiconductor Corporation Quote
NVTS’ earnings were in line with the Zacks Consensus Estimate in two of the trailing four quarters, missing in one and beating in the remaining one, the average negative surprise being 7.5%.
Let’s see how things have shaped up for this announcement.
Key Factors to Note for NVTS Earnings
Navitas’ fourth-quarter performance has benefited from its three key markets, which include AI data centers, mobile and electric vehicles (EVs). These markets are anticipated to have driven substantial revenue growth in the to-be-reported quarter.
Navitas has a robust customer pipeline valued at over $1.6 billion, with numerous design wins across multiple sectors. This strong pipeline is expected to have driven continued demand for the company’s GaN and silicon carbide solutions, particularly in AI, mobile, EVs, and solar energy, in the fourth quarter.
Navitas mobile business saw a record performance in the third quarter of 2024, and this momentum is anticipated to have continued in the fourth quarter of 2024 as well. Growth in mobile is expected to help offset challenges in other areas, providing stable revenues for the company. The increasing adoption of GaN technology in mobile fast chargers remains a key growth driver.
However, the dynamic nature and short lead times for the mobile business and the customer project delays are expected to have hurt NVTS’ top line in the to-be-reported quarter.
The company has also been suffering from a challenging macroeconomic environment, with continued softness in some of the end markets. An unfavorable product mix might have hurt the fourth quarter of 2024 gross margin, which is expected to be 40% (+/- 50 basis points).
NVTS Trading at a Premium
Navitas shares have plunged 49.8% in the trailing 12-month period against the Zacks Computer & Technology sector’s 26.3% return and the Zacks Electronics Semiconductors industry’s appreciation of 55.5%.
NVTS Underperforms Sector, Industry
Image Source: Zacks Investment Research
Shares of this gallium nitride (GaN) power ICs and silicon carbide (SiC) technology provider have underperformed industry peers, including Broadcom (AVGO - Free Report) and Credo Technology (CRDO - Free Report) , in the trailing 12-month period. Shares of Broadcom and Credo have appreciated 85.3% and 226.7%, respectively, over the same time frame.
The Navitas stock is also not so cheap, as the Value Score of F suggests a stretched valuation at this moment.
NVTS stock is trading at a premium with a forward 12-month Price/Sales of 6.92X compared with the sector’s 6.62X.
Price/Sales (F12M)
Image Source: Zacks Investment Research
Navitas and Infineon Partner to Boost GaN Adoption
In the third quarter of 2024, Navitas announced a strategic partnership with Infineon (IFNNY - Free Report) to align on common GaN specifications, allowing customers to dual-source GaN components.
This collaboration with Infenion is expected to accelerate GaN adoption in high-volume markets like data centers, EVs, and power electronics, providing customers with increased confidence in supply chain stability.
Cost Reduction Plan to Aid NVTS’ Profitability
Navitas’ cost-reduction plan is expected to save $2 million per quarter and streamline the enterprise with an increased focus on Al data centers, EVs and mobile applications. The company’s plan includes a 14% reduction in headcount.
Adjusted operating expenses are expected to decline by roughly $20.5 million in the fourth quarter of 2024.
Navitas expects to realize the full benefit of the cost savings in the first half of 2025, which is expected to help the company generate profit.
Navitas’ Prospects Ride on Expanding Portfolio
Navitas’ expanding portfolio is a major driver in the GaN and SiC market, which is currently worth more than $22 billion. Its strong portfolio of more than 300 patents (issued or pending) across GaN power circuitry, analog and digital integration, and SiC device design and fabrication is noteworthy.
Through its latest GaNSafe family, NVTS is expanding its power capabilities into AI data centers, EV chargers and next-generation solar microinverters.
The launch of a new low-voltage GaN technology optimized for 48-volt systems is noteworthy. It gives Navitas more content and complete solutions for AI data centers and next-generation EV platforms and opens up new markets like AI-based robotics.
The company believes this new 80-volt to 200-volt range creates an additional $1 billion market opportunity in the future.
NVTS: Smart Buy or Risky Bet
Given the challenging macroeconomic environment, Navitas’ prospects remain cloudy in the near term. Unfavorable revenue mix due to high mobile content is expected to keep gross margin under pressure. Stretched valuation also remains a concern.
Navitas currently has a Zacks Rank #3 (Hold), which implies that investors should wait for a favorable time to accumulate the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.