As Q1 earnings season comes to a close, it’s time to take stock of this quarter's best and worst performers amongst the analog semiconductors stocks, including Magnachip (NYSE:MX) and its peers.
Demand for analog chips is generally linked to the overall level of economic growth, as analog chips serve as the building blocks of most electronic goods and equipment. Unlike digital chip designers, analog chip makers tend to produce the majority of their own chips, as analog chip production does not require expensive leading edge nodes. Less dependent on major secular growth drivers, analog product cycles are much longer, often 5-7 years.
The 15 analog semiconductors stocks we track reported a slower Q1; on average, revenues beat analyst consensus estimates by 0.91%, while on average next quarter revenue guidance was 2.07% under consensus. Tech multiples have reverted to the historical mean after reaching all time levels in early 2021, but analog semiconductors stocks held their ground better than others, with the share prices up 11.5% since the previous earnings results, on average.
Weakest Q1: Magnachip (NYSE:MX)
With its technology found in common consumer electronics such as TVs and smartphones, Magnachip Semiconductor (NYSE:MX) is a provider of analog and mixed-signal semiconductors.
Magnachip reported revenues of $57 million, down 45.2% year on year, missing analyst expectations by 6.55%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and a miss of the top line analyst estimates.
YJ Kim, Magnachip's chief executive officer commented, "Our Q1 results continued to be affected by last year's OLED wafer shortages that impacted second half design-wins and the ongoing smartphone inventory correction in our Display business and weak consumer demand in our Power business. Despite the challenging environment, we remained focused on execution during the quarter. In our Display business, we successfully delivered our second OLED DDIC project sample ahead of schedule to a large non-Korean panel customer and remain on track for second half smartphone launches.
Magnachip delivered the weakest performance against analyst estimates and slowest revenue growth of the whole group. The stock is up 25.5% since the results and currently trades at $10.88.
Best Q1: Vishay Intertechnology (NYSE:VSH)
Named after the founder's ancestral village in present-day Lithuania, Vishay Intertechnology (NYSE:VSH) manufactures simple chips and electronic components that are building blocks of virtually all types of electronic devices.
Vishay Intertechnology reported revenues of $871 million, up 2.02% year on year, beating analyst expectations by 2.98%. It was a very strong quarter for the company, with a beat on the bottom line and very optimistic guidance for the next quarter.
The stock is up 31.5% since the results and currently trades at $27.82.
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Texas Instruments (NASDAQ:TXN)
Headquartered in Dallas, Texas since the 1950s, Texas Instruments (NASDAQ:TXN) is the world’s largest producer of analog semiconductors.
Texas Instruments reported revenues of $4.38 billion, down 10.7% year on year, in line with analyst expectations. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and an increase in inventory levels.
The stock is up 4.68% since the results and currently trades at $177.34.
Microchip Technology (NASDAQ:MCHP)
Spun out from General Instrument in 1987, Microchip Technology (NASDAQ: MCHP) is a leading provider of microcontrollers and integrated circuits used mainly in the automotive world, especially in electric vehicles and their charging devices.
Microchip Technology reported revenues of $2.23 billion, up 21.1% year on year, in line with analyst expectations. It was a mixed quarter for the company, with strong sales guidance for the next quarter but an increase in inventory levels.
The stock is up 14.2% since the results and currently trades at $86.78.
Power Integrations (NASDAQ:POWI)
A leading supplier of parts for electronics such as home appliances, Power Integrations (NASDAQ:POWI) is a semiconductor designer and developer specializing in products used for high-voltage power conversion.
Power Integrations reported revenues of $106.3 million, down 41.6% year on year, in line with analyst expectations. It was a weak quarter for the company, with a decline in operating margin and an increase in inventory levels.
The stock is up 25.9% since the results and currently trades at $92.7.
The author has no position in any of the stocks mentioned