NVTS
Navitas Semiconductor Corporation
$29.25
Cyclical & Capital-Intensive
70%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 166.7% above fair value
You pay
$29.25
Bear
$8.52
Fair
$10.97
Bull
$13.41
Bear
$8.52
-70.9%
$0.51 × 12x + net cash
Fair
$10.97
-62.5%
$0.51 × 16x + net cash
Bull
$13.41
-54.2%
$0.51 × 20x + net cash
Key Value Driver
Through-cycle normalized EPS ($0.51)
Implied Market Multiple
57.4x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $18.23 from 8 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $10.97 per share.
Warnings
Price-to-book value of 30.1x is above the normal range for this type of business (0.7x-2.0x). The stock may already price in a strong cycle.
Wall Street's average price target is $18.23 (from 8 analysts). Our estimate is 50% below the consensus -- consider that gap carefully.
Key Risks
- Standard 10-year DCF produces unreliable terminal values for cyclicals
- 'Cheap' P/E at cycle peak is the most common value trap — normalize first
- Captive finance subsidiaries have different risk profiles from manufacturing