Intrinsic value of NXP Semiconductors - NXPI

Previous Close

$115.49

  Intrinsic Value

$81.75

stock screener

  Rating & Target

sell

-29%

  Value-price divergence*

-98%

Previous close

$115.49

 
Intrinsic value

$81.75

 
Up/down potential

-29%

 
Rating

sell

 
Value-price divergence*

-98%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of NXPI stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 40.0

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  55.68
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  9,498
  9,688
  9,911
  10,165
  10,451
  10,768
  11,116
  11,495
  11,904
  12,346
  12,820
  13,326
  13,867
  14,443
  15,055
  15,705
  16,393
  17,121
  17,892
  18,706
  19,565
  20,472
  21,429
  22,437
  23,499
  24,618
  25,796
  27,035
  28,340
  29,712
  31,156
Variable operating expenses, $m
 
  6,473
  6,602
  6,749
  6,914
  7,096
  7,297
  7,515
  7,752
  8,007
  8,280
  7,688
  8,000
  8,332
  8,685
  9,060
  9,457
  9,877
  10,322
  10,791
  11,287
  11,810
  12,362
  12,944
  13,556
  14,202
  14,881
  15,597
  16,349
  17,141
  17,974
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  9,680
  6,473
  6,602
  6,749
  6,914
  7,096
  7,297
  7,515
  7,752
  8,007
  8,280
  7,688
  8,000
  8,332
  8,685
  9,060
  9,457
  9,877
  10,322
  10,791
  11,287
  11,810
  12,362
  12,944
  13,556
  14,202
  14,881
  15,597
  16,349
  17,141
  17,974
Operating income, $m
  -182
  3,215
  3,309
  3,417
  3,538
  3,672
  3,819
  3,979
  4,152
  4,339
  4,540
  5,638
  5,867
  6,111
  6,370
  6,645
  6,936
  7,244
  7,570
  7,915
  8,278
  8,662
  9,067
  9,493
  9,943
  10,416
  10,914
  11,439
  11,991
  12,571
  13,182
EBITDA, $m
  2,023
  5,312
  5,434
  5,574
  5,731
  5,905
  6,095
  6,303
  6,527
  6,770
  7,029
  7,307
  7,604
  7,920
  8,255
  8,611
  8,989
  9,388
  9,811
  10,257
  10,728
  11,225
  11,750
  12,303
  12,885
  13,499
  14,144
  14,824
  15,540
  16,292
  17,084
Interest expense (income), $m
  348
  333
  344
  356
  369
  385
  402
  421
  441
  464
  488
  513
  541
  570
  601
  634
  670
  707
  746
  788
  832
  879
  928
  980
  1,034
  1,092
  1,153
  1,216
  1,284
  1,354
  1,429
Earnings before tax, $m
  -603
  2,882
  2,965
  3,061
  3,168
  3,287
  3,417
  3,558
  3,711
  3,876
  4,052
  5,125
  5,327
  5,541
  5,769
  6,010
  6,266
  6,537
  6,824
  7,126
  7,446
  7,783
  8,139
  8,513
  8,908
  9,324
  9,762
  10,222
  10,707
  11,217
  11,754
Tax expense, $m
  -851
  778
  801
  827
  855
  887
  923
  961
  1,002
  1,046
  1,094
  1,384
  1,438
  1,496
  1,558
  1,623
  1,692
  1,765
  1,842
  1,924
  2,010
  2,101
  2,197
  2,299
  2,405
  2,517
  2,636
  2,760
  2,891
  3,029
  3,173
Net income, $m
  200
  2,104
  2,165
  2,235
  2,313
  2,399
  2,494
  2,597
  2,709
  2,829
  2,958
  3,741
  3,888
  4,045
  4,211
  4,388
  4,574
  4,772
  4,981
  5,202
  5,436
  5,682
  5,941
  6,215
  6,503
  6,806
  7,126
  7,462
  7,816
  8,188
  8,580

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,894
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  24,898
  23,458
  23,997
  24,614
  25,306
  26,073
  26,915
  27,832
  28,824
  29,893
  31,040
  32,268
  33,577
  34,971
  36,453
  38,026
  39,692
  41,456
  43,322
  45,293
  47,374
  49,570
  51,885
  54,326
  56,898
  59,607
  62,459
  65,461
  68,620
  71,943
  75,439
Adjusted assets (=assets-cash), $m
  23,004
  23,458
  23,997
  24,614
  25,306
  26,073
  26,915
  27,832
  28,824
  29,893
  31,040
  32,268
  33,577
  34,971
  36,453
  38,026
  39,692
  41,456
  43,322
  45,293
  47,374
  49,570
  51,885
  54,326
  56,898
  59,607
  62,459
  65,461
  68,620
  71,943
  75,439
Revenue / Adjusted assets
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
Average production assets, $m
  10,704
  10,918
  11,169
  11,457
  11,779
  12,136
  12,528
  12,954
  13,416
  13,914
  14,448
  15,019
  15,629
  16,278
  16,967
  17,699
  18,475
  19,296
  20,164
  21,082
  22,050
  23,072
  24,150
  25,286
  26,483
  27,744
  29,072
  30,469
  31,939
  33,486
  35,113
Working capital, $m
  2,965
  1,521
  1,556
  1,596
  1,641
  1,691
  1,745
  1,805
  1,869
  1,938
  2,013
  2,092
  2,177
  2,268
  2,364
  2,466
  2,574
  2,688
  2,809
  2,937
  3,072
  3,214
  3,364
  3,523
  3,689
  3,865
  4,050
  4,245
  4,449
  4,665
  4,892
Total debt, $m
  9,187
  9,040
  9,358
  9,722
  10,129
  10,581
  11,077
  11,617
  12,201
  12,831
  13,507
  14,230
  15,001
  15,822
  16,695
  17,621
  18,603
  19,642
  20,740
  21,901
  23,127
  24,421
  25,785
  27,222
  28,737
  30,333
  32,012
  33,780
  35,641
  37,598
  39,657
Total liabilities, $m
  13,963
  13,816
  14,134
  14,498
  14,905
  15,357
  15,853
  16,393
  16,977
  17,607
  18,283
  19,006
  19,777
  20,598
  21,471
  22,397
  23,379
  24,418
  25,516
  26,677
  27,903
  29,197
  30,561
  31,998
  33,513
  35,109
  36,788
  38,556
  40,417
  42,374
  44,433
Total equity, $m
  10,935
  9,641
  9,863
  10,116
  10,401
  10,716
  11,062
  11,439
  11,847
  12,286
  12,758
  13,262
  13,800
  14,373
  14,982
  15,629
  16,314
  17,039
  17,805
  18,615
  19,471
  20,373
  21,325
  22,328
  23,385
  24,498
  25,671
  26,904
  28,203
  29,569
  31,005
Total liabilities and equity, $m
  24,898
  23,457
  23,997
  24,614
  25,306
  26,073
  26,915
  27,832
  28,824
  29,893
  31,041
  32,268
  33,577
  34,971
  36,453
  38,026
  39,693
  41,457
  43,321
  45,292
  47,374
  49,570
  51,886
  54,326
  56,898
  59,607
  62,459
  65,460
  68,620
  71,943
  75,438
Debt-to-equity ratio
  0.840
  0.940
  0.950
  0.960
  0.970
  0.990
  1.000
  1.020
  1.030
  1.040
  1.060
  1.070
  1.090
  1.100
  1.110
  1.130
  1.140
  1.150
  1.160
  1.180
  1.190
  1.200
  1.210
  1.220
  1.230
  1.240
  1.250
  1.260
  1.260
  1.270
  1.280
Adjusted equity ratio
  0.393
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  200
  2,104
  2,165
  2,235
  2,313
  2,399
  2,494
  2,597
  2,709
  2,829
  2,958
  3,741
  3,888
  4,045
  4,211
  4,388
  4,574
  4,772
  4,981
  5,202
  5,436
  5,682
  5,941
  6,215
  6,503
  6,806
  7,126
  7,462
  7,816
  8,188
  8,580
Depreciation, amort., depletion, $m
  2,205
  2,097
  2,125
  2,157
  2,193
  2,233
  2,276
  2,324
  2,375
  2,430
  2,490
  1,669
  1,737
  1,809
  1,885
  1,967
  2,053
  2,144
  2,240
  2,342
  2,450
  2,564
  2,683
  2,810
  2,943
  3,083
  3,230
  3,385
  3,549
  3,721
  3,901
Funds from operations, $m
  2,674
  4,201
  4,290
  4,392
  4,506
  4,632
  4,771
  4,921
  5,084
  5,259
  5,448
  5,410
  5,625
  5,854
  6,096
  6,354
  6,627
  6,916
  7,222
  7,545
  7,886
  8,245
  8,625
  9,024
  9,445
  9,889
  10,356
  10,848
  11,365
  11,909
  12,482
Change in working capital, $m
  371
  30
  35
  40
  45
  50
  55
  59
  64
  69
  74
  80
  85
  90
  96
  102
  108
  114
  121
  128
  135
  142
  150
  158
  167
  176
  185
  195
  205
  215
  227
Cash from operations, $m
  2,303
  4,171
  4,255
  4,352
  4,461
  4,582
  4,716
  4,862
  5,020
  5,190
  5,373
  5,331
  5,540
  5,763
  6,000
  6,252
  6,519
  6,802
  7,101
  7,417
  7,751
  8,103
  8,474
  8,866
  9,279
  9,713
  10,171
  10,653
  11,160
  11,694
  12,255
Maintenance CAPEX, $m
  0
  -1,189
  -1,213
  -1,241
  -1,273
  -1,309
  -1,348
  -1,392
  -1,439
  -1,491
  -1,546
  -1,605
  -1,669
  -1,737
  -1,809
  -1,885
  -1,967
  -2,053
  -2,144
  -2,240
  -2,342
  -2,450
  -2,564
  -2,683
  -2,810
  -2,943
  -3,083
  -3,230
  -3,385
  -3,549
  -3,721
New CAPEX, $m
  -448
  -215
  -251
  -287
  -322
  -357
  -392
  -427
  -462
  -498
  -534
  -571
  -610
  -649
  -690
  -732
  -776
  -821
  -868
  -917
  -969
  -1,022
  -1,078
  -1,136
  -1,197
  -1,261
  -1,327
  -1,397
  -1,470
  -1,547
  -1,627
Cash from investing activities, $m
  -627
  -1,404
  -1,464
  -1,528
  -1,595
  -1,666
  -1,740
  -1,819
  -1,901
  -1,989
  -2,080
  -2,176
  -2,279
  -2,386
  -2,499
  -2,617
  -2,743
  -2,874
  -3,012
  -3,157
  -3,311
  -3,472
  -3,642
  -3,819
  -4,007
  -4,204
  -4,410
  -4,627
  -4,855
  -5,096
  -5,348
Free cash flow, $m
  1,676
  2,767
  2,791
  2,824
  2,866
  2,917
  2,976
  3,043
  3,118
  3,202
  3,293
  3,154
  3,262
  3,378
  3,502
  3,635
  3,777
  3,928
  4,089
  4,259
  4,440
  4,631
  4,833
  5,047
  5,272
  5,510
  5,761
  6,026
  6,304
  6,598
  6,907
Issuance/(repayment) of debt, $m
  -80
  274
  318
  363
  408
  452
  496
  540
  584
  630
  676
  723
  771
  821
  873
  926
  982
  1,039
  1,099
  1,161
  1,226
  1,293
  1,364
  1,438
  1,515
  1,595
  1,680
  1,768
  1,861
  1,957
  2,059
Issuance/(repurchase) of shares, $m
  -1,165
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -1,392
  274
  318
  363
  408
  452
  496
  540
  584
  630
  676
  723
  771
  821
  873
  926
  982
  1,039
  1,099
  1,161
  1,226
  1,293
  1,364
  1,438
  1,515
  1,595
  1,680
  1,768
  1,861
  1,957
  2,059
Total cash flow (excl. dividends), $m
  280
  3,042
  3,109
  3,187
  3,274
  3,368
  3,472
  3,583
  3,703
  3,832
  3,969
  3,877
  4,033
  4,199
  4,375
  4,561
  4,758
  4,967
  5,187
  5,420
  5,665
  5,924
  6,197
  6,484
  6,787
  7,106
  7,441
  7,794
  8,165
  8,555
  8,966
Retained Cash Flow (-), $m
  580
  -179
  -222
  -253
  -285
  -315
  -346
  -377
  -408
  -439
  -472
  -504
  -538
  -573
  -609
  -646
  -685
  -725
  -767
  -810
  -855
  -903
  -952
  -1,003
  -1,057
  -1,113
  -1,172
  -1,234
  -1,298
  -1,366
  -1,437
Prev. year cash balance distribution, $m
 
  1,473
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  4,336
  2,887
  2,934
  2,989
  3,053
  3,126
  3,206
  3,295
  3,392
  3,498
  3,373
  3,495
  3,626
  3,766
  3,915
  4,074
  4,242
  4,421
  4,610
  4,810
  5,022
  5,245
  5,481
  5,730
  5,992
  6,269
  6,560
  6,867
  7,190
  7,529
Discount rate, %
 
  6.50
  6.83
  7.17
  7.52
  7.90
  8.30
  8.71
  9.15
  9.60
  10.08
  10.59
  11.12
  11.67
  12.26
  12.87
  13.51
  14.19
  14.90
  15.64
  16.43
  17.25
  18.11
  19.01
  19.96
  20.96
  22.01
  23.11
  24.27
  25.48
  26.75
PV of cash for distribution, $m
 
  4,071
  2,530
  2,384
  2,236
  2,087
  1,938
  1,787
  1,636
  1,486
  1,338
  1,115
  986
  863
  746
  637
  536
  445
  363
  291
  230
  178
  135
  100
  73
  51
  36
  24
  16
  10
  6
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

NXP Semiconductors N.V. (NXP) is a holding company. The Company operates as a semiconductor company. The Company provides high performance mixed signal and standard product solutions. The Company's segments are High Performance Mixed Signal (HPMS), Standard Products (SP), and Corporate and Other. Its product solutions are used in a range of end-market applications, including automotive, personal security and identification, wireless and wireline infrastructure, mobile communications, multi-market industrial, consumer and computing. It engages with global original equipment manufacturers (OEMs) and sells products in all geographic regions. NXP's HPMS segment includes business lines, such as Automotive, Secure Identification Solutions (SIS), Secure Connected Devices (SCD), and Secure Interfaces and Infrastructure (SI&I). The Company's SP segment supplies a range of standard semiconductor components, such as small signal discretes and power discretes.

FINANCIAL RATIOS  of  NXP Semiconductors (NXPI)

Valuation Ratios
P/E Ratio 193.7
Price to Sales 4.1
Price to Book 3.5
Price to Tangible Book
Price to Cash Flow 16.8
Price to Free Cash Flow 20.9
Growth Rates
Sales Growth Rate 55.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 26.9%
Cap. Spend. - 3 Yr. Gr. Rate 12.4%
Financial Strength
Quick Ratio 4
Current Ratio 0.6
LT Debt to Equity 80.2%
Total Debt to Equity 84%
Interest Coverage -1
Management Effectiveness
Return On Assets 0.2%
Ret/ On Assets - 3 Yr. Avg. 6.9%
Return On Total Capital 1%
Ret/ On T. Cap. - 3 Yr. Avg. 8.3%
Return On Equity 1.8%
Return On Equity - 3 Yr. Avg. 28.6%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 43%
Gross Margin - 3 Yr. Avg. 45.3%
EBITDA Margin 20.5%
EBITDA Margin - 3 Yr. Avg. 25.7%
Operating Margin -1.9%
Oper. Margin - 3 Yr. Avg. 16.5%
Pre-Tax Margin -6.3%
Pre-Tax Margin - 3 Yr. Avg. 9.8%
Net Profit Margin 2.1%
Net Profit Margin - 3 Yr. Avg. 12.2%
Effective Tax Rate 141.1%
Eff/ Tax Rate - 3 Yr. Avg. 46.8%
Payout Ratio 0%

NXPI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the NXPI stock intrinsic value calculation we used $9498 million for the last fiscal year's total revenue generated by NXP Semiconductors. The default revenue input number comes from 2016 income statement of NXP Semiconductors. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our NXPI stock valuation model: a) initial revenue growth rate of 2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 6.5%, whose default value for NXPI is calculated based on our internal credit rating of NXP Semiconductors, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of NXP Semiconductors.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of NXPI stock the variable cost ratio is equal to 67%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for NXPI stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.8% for NXP Semiconductors.

Corporate tax rate of 27% is the nominal tax rate for NXP Semiconductors. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the NXPI stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for NXPI are equal to 112.7%.

Life of production assets of 9 years is the average useful life of capital assets used in NXP Semiconductors operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for NXPI is equal to 15.7%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $10935 million for NXP Semiconductors - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 346.699 million for NXP Semiconductors is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of NXP Semiconductors at the current share price and the inputted number of shares is $40.0 billion.

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COMPANY NEWS

▶ Qualcomm CEO: We Will Be Successful Against Apple   [Oct-18-17 02:35PM  TheStreet.com]
▶ [$$] Qualcomm Says NXP Deal on Track, As it Accelerates in Driverless Tech   [Oct-17-17 07:52PM  The Wall Street Journal]
▶ Is Qualcomm Inc. Stock a Buy?   [07:45AM  Motley Fool]
▶ Qualcomm Inc. Gets Fined Nearly $800 Million in Taiwan   [Oct-14-17 01:15PM  Motley Fool]
▶ Qualcomm's NXP Deal Stalls Out in the EU   [Oct-10-17 01:05PM  Investopedia]
▶ Qualcomm's NXP Deal Could be in Big Trouble   [Oct-02-17 08:14PM  Motley Fool]
▶ Should You Buy NXP Semiconductors NV (NXPI)?   [06:46AM  Simply Wall St.]
▶ Jacobs Says Qualcomm Is Paying a Fair Price for NXP   [Sep-13-17 04:12PM  Bloomberg Video]
▶ Understanding the IoT Trend for MCHP and CY   [Sep-12-17 02:40PM  Market Realist]
▶ Will Qualcomm Sweeten Its Bid For NXP?   [Sep-11-17 01:26PM  Forbes]
▶ Better Buy: Qualcomm, Inc. vs. Intel   [07:42AM  Motley Fool]
▶ 3 Reasons I'm Losing Faith in Qualcomm Inc.   [Sep-07-17 10:00AM  Motley Fool]
▶ 3 High-Yield Tech Stocks   [Sep-06-17 08:10PM  Motley Fool]
▶ What Does Elliott Want from NXP-Qualcomm   [Sep-04-17 07:38AM  Market Realist]
▶ Better Buy: Sierra Wireless vs. Qualcomm   [Sep-03-17 12:00PM  Motley Fool]
▶ [$$] NXP Semiconductors May Draw a Sweetened Deal   [Sep-01-17 11:38PM  Barrons.com]
▶ Interpreting NXP Semiconductors Scorecard   [04:04PM  Market Realist]
▶ 3 Top Internet of Things Stocks to Buy Now   [Aug-30-17 08:51PM  Motley Fool]
▶ Where Will NVIDIA Be 1 Year from Now?   [Aug-29-17 08:13AM  Motley Fool]
▶ Qualcomm Won't Win NXP by Dawdling   [Aug-24-17 10:40AM  Bloomberg]
▶ Snap Inc (SNAP) Stock Fell, But Its Hardly Down and Out   [Aug-23-17 11:59AM  InvestorPlace]
▶ How Sustainable is Qualcomm's Dividend?   [Aug-22-17 04:53PM  Motley Fool]
▶ Why Qualcomm, Inc. (QCOM) Stock Is Bound for Greater Pain   [Aug-18-17 12:19PM  InvestorPlace]
▶ The Crazy Bullish Argument for Qualcomm, Inc. (QCOM) Stock   [Aug-16-17 01:05PM  InvestorPlace]
▶ Dont Give Up on Qualcomm, Inc. (QCOM) Stock So Easily   [Aug-14-17 02:18PM  InvestorPlace]
▶ Is Qualcomm, Inc. (QCOM) Stock Screwed? It Doesnt Look Good   [Aug-11-17 11:51AM  InvestorPlace]
▶ Something Big Brewing at Qualcomm   [12:42PM  TheStreet.com]
▶ [$$] NXP Investors Can Expect More Qualcomm Love   [11:07AM  The Wall Street Journal]
▶ A Look at Qualcomms Stock Price Momentum   [10:35AM  Market Realist]
▶ Why Are Some Analysts Bearish about Qualcomm?   [07:35AM  Market Realist]
▶ Action Alerts PLUS: There's Strength in (Earnings) Numbers   [Aug-06-17 10:00AM  TheStreet.com]
▶ [$$] Elliotts NXP Stake Pushes Qualcomm to Raise Bid   [Aug-04-17 11:47PM  The Wall Street Journal]
▶ [$$] Elliott's NXP Stake Pushes Qualcomm to Raise Bid   [12:05PM  The Wall Street Journal]
▶ Exploring Analysts Opinions on Qualcomm   [10:35AM  Market Realist]
Financial statements of NXPI
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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