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Infineon Technologies AG ADR IFNNY

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Stock PINX Rating as of
$40.05 −1.45 (3.49%)
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As of Delayed Price Closed
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Company Report

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Infineon Earnings: Still a Top Pick of Ours in Semis as Bottom Appears to Be Imminent

Brian Colello

Narrow-moat Infineon Technologies reported decent fiscal second-quarter results amid a tough demand environment while providing investors with a soft forecast for the third quarter and reducing its guidance for fiscal 2024 (ending September). On the bright side, Infineon believes that June will be the bottom of an ongoing cyclical downturn in power semiconductors, which is commentary echoed by several peers in recent weeks. Further, Infineon disclosed its strong momentum in microcontroller revenue, which we believe is more insulated from the rise of Chinese chip development than its low- to mid-range power semiconductor business is. We believe these two factors are why the stock rose nearly 13% after the earnings report on May 7. We maintain our EUR 50/$54 fair value estimate and still view Infineon as one of our top picks in the semiconductor space, as we believe the long-term risks around its auto business and Chinese competition are more than overdone.

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Price vs Fair Value

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IFNNY is trading at a 833% premium.
Price
$40.05
Fair Value
$81.00
Uncertainty
High
1-Star Price
$73.90
5-Star Price
$12.10
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Infineon is now focused on its core industrial, automotive, and card security markets after a series of smart divestitures of underperforming businesses.

Bears

Unlike some other large U.S.-based peers, Infineon has a large discrete chip business that is more commoditylike, in our view, and carries inherently lower gross margins than high-performance analog chips.

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Trading Information

Previous Close Price
$41.50
Day Range
$40.03–40.85
52-Week Range
$28.83–44.46
Bid/Ask
$40.01 / $40.15
Market Cap
$51.96 Bil
Volume/Avg
123,728 / 236,015

Key Statistics

Price/Earnings (Normalized)
16.75
Price/Sales
3.13
Dividend Yield (Trailing)
0.95%
Dividend Yield (Forward)
0.95%
Total Yield
0.95%

Company Profile

Infineon Technologies AG headquartered in Munich, was spun off from German industrial conglomerate Siemens in 2000 and today is one of Europe’s largest chipmakers. The company is a leader in the automotive semiconductor market with prominent products used in active safety and powertrain content within vehicles. Infineon is also the market leader in power semiconductors used to deliver voltage within a wide variety of electrical systems. The company operates in four segments: automotive, or ATV, green industrial power, or GIP, power and sensor systems, or PSS, and connected secure systems, or CSS.
Sector
Technology
Industry
Semiconductors
Stock Style Box
Large Core
Total Number of Employees
59,364
Website
https://www.infineon.com

Competitors

Valuation

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Metric
IFNNY
NXPI
ON
Price/Earnings (Normalized)
 16.7519.0114.45
Price/Book Value
 3.047.763.86
Price/Sales
 3.135.263.97
Price/Cash Flow
 11.0817.1411.65
Price/Earnings
IFNNY
NXPI
ON

Financial Strength

Metric
IFNNY
NXPI
ON
Quick Ratio
 0.831.351.63
Current Ratio
 1.802.352.87
Interest Coverage
 23.348.4138.88
Quick Ratio
IFNNY
NXPI
ON

Profitability

Metric
IFNNY
NXPI
ON
Return on Assets (Normalized)
 9.26%15.38%16.90%
Return on Equity (Normalized)
 16.81%43.57%29.83%
Return on Invested Capital (Normalized)
 11.79%19.62%19.99%
Return on Assets
IFNNY
NXPI
ON
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