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NXP Semiconductors N.V. (NXPI) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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NXP Semiconductors N.V. (NXPI)

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Intrinsic Value (DCF)

Current$238.60
→
Intrinsic$274.81
+15%
$173.74$274.81$475.59
Market implies 22% growth for 5 years
NXPI shows 15% potential upside using 25% growth — reasonable if fundamentals hold.
At $239, the market prices in continued strong cash flow growth (22%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $174 → Bull $476. Current price implies expectations below the base case, but well above the bear case.
Discount ↓Growth →21%23%25%27%
8%$357$388$422$457
10%$232$253$275$298
12%$166$181$198$215
14%$126$138$150$163

Bull Case

  • Bull case ($476) offers 99% upside at 30% growth, 8% discount
  • 13% margin of safety vs. base case estimate
  • Market-implied growth (22%) ≤ historical CAGR (25%)

Bear Case

  • Bear case ($174) implies 27% downside at 20% growth, 12% discount
  • Using 25% growth — aggressive, watch for mean reversion
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5-Year Free Cash Flow Projection

Year 1$2.57B
Year 2$3.21B
Year 3$4.01B
Year 4$5.02B
Year 5$6.27B
Terminal$99.38B

📐 Model Inputs

Growth Rate25.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate9.5%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$2.06BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is NXPI stock undervalued or overvalued?
🟡 FAIRLY VALUED

NXPI trades at $238.60, within 10% of our $222.17 intrinsic value estimate. At 9.5% WACC and 25.0% FCF growth, the market is pricing in assumptions roughly aligned with the 5-year historical CAGR. The valuation range spans $132.30 (bear) to $358.70 (bull).

What is NXPI's intrinsic value?

Using a 5-year DCF model: Base FCF of $2.06B, projected at 25.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 9.5% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $7.82B net debt and dividing by 0.26B shares: Bear $132.30 | Base $222.17 | Bull $358.70. Current price $238.60 implies -10% to base case.

How is NXPI's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 25.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=9.5%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($65.11B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 31.7x.