Magnachip Semiconductor Corporation, together with its subsidiaries, designs, manufactures, and supplies analog and mixed-signal semiconductor platform solutions for communications, the Internet of Things, consumer, industrial, and automotive applications. It provides display solutions, including source and gate drivers, and timing controllers that cover a range of flat panel displays used in mobile communications, automotive, entertainment devices, notebook PCs, monitors and liquid crystal displays, and micro light-emitting diode (LED) televisions. The company also offers metal oxide semiconductor field-effect transistors, insulated-gate bipolar transistors, AC-DC converters, DC-DC converters, LED drivers, regulators, and power management integrated circuits for a range of devices comprising televisions, smartphones, mobile phones, wearable devices, desktop PCs, notebooks, tablet PCs, and other consumer electronics, as well as for power suppliers, e-bike, photovoltaic inverter, LED lighting, and motor drive; and organic light-emitting diode display driver integrated circuits for OLED TVs. It serves consumer, computing, and industrial electronics original equipment manufacturers, original design manufacturers, and electronics manufacturing services companies, as well as subsystem designers in Korea, the Asia Pacific, the United States, Europe, and internationally. The company sells its products through a direct sales force, as well as through a network of agents and distributors. Magnachip Semiconductor Corporation was incorporated in 2003 and is based in Cheongju, South Korea.

Magnachip Semiconductor Corporation

ON Semiconductor ON shares have lost 34.5% year to date, underperforming the Zacks Semiconductor - Analog and Mixed industry’s decline of 5.9% and the Zacks Computer & Technology sector’s 3.7%.
The decline in ON Semiconductor’s share price can be attributed to weak growth across Power Solutions Group (PSG), Analog and Mixed Signals Group (AMG) and Intelligent Sensing Group (ISG). In the recently concluded first-quarter 2025, PSG revenues (contributed 44.6% to revenues) fell 26.2% year over year. AMG revenues (39.2% of revenues) declined 18.7% year over year, while ISG revenues (16.2% of revenues) saw a decline of 19.7% year over year.
Weak demand in the automotive sector due to geopolitical tensions and a slowdown in EV adoption has negatively impacted ON Semiconductor’s growth. In first-quarter 2025, Automotive (52.7% of revenues) revenues fell 25.1% year over year, while Industrial (27.7% of revenues) end-market (including military, aerospace, and medical) revenues declined 16% year over year.
However, AI data centers have evolved as a major growth market for ON Semiconductor. In the first quarter of 2025, AI data center revenues more than doubled year over year. The company is leveraging its silicon carbide and silicon-powered devices to gain traction. At the entry point of power into the data center, ON Semiconductor is benefiting from the transition to modular UPS systems with its EliteSiC power module solutions, delivering higher efficiency and power density than traditional silicon solutions. ON expects revenues from UPS to grow between 40% and 50% by 2025.
ON Semiconductor Corporation Price and Consensus
ON Semiconductor Corporation price-consensus-chart | ON Semiconductor Corporation Quote
ON Suffers From Stiff Competition
ON Semiconductor is facing stiff competition from industry peers like Magnachip Semiconductor MX, NXP Semiconductors NXPI and Analog Devices ADI. In the year-to-date period, shares of Magnachip Semiconductor, NXP Semiconductors and Analog Devices have declined 8.4%, 7.5% and 0.9%, respectively.
Analog Devices is benefiting from strong momentum across the industrial and automotive end markets. Strong momentum across the EV space on the back of its robust Battery Management System solutions remains a tailwind. Meanwhile, NXP Semiconductors is benefiting from strong demand for electrification, AI-driven edge computing and secure connectivity solutions. Magnachip Semiconductor is capitalizing on the steady demand in the consumer electronics space, led by its focus on power and display solutions.
ON Semiconductor Faces Pricing Pressure and Low Utilization
Owing to reduced demand, ON expects low single-digit price cuts. This is negatively impacting revenues and gross margin. The demand is, however, not expected to pick up in the next few quarters due to global supply chain disruptions and uncertainty around tariff impositions. Hence, the growth outlook remains slow.
Alongside, ON Semiconductor is facing the underutilization of its manufacturing capacity due to weak end-market demand. The utilized manufacturing capacity for the first quarter of 2025 remained at 60% and is expected to decline over the next quarter. Lower utilization has led to underabsorption of fixed costs, which is negatively impacting the margins and bottom line.
In the first quarter of 2025, gross margin declined by 590 basis points (bps) year over year to 40%. Management expects approximately 900 bps of non-cash underabsorption charges for the second quarter. Both pricing pressure and lower utilization create a significant negative impact on gross margin.
ON Offers Weak Q2 Guidance
For the second quarter of 2025, ON Semiconductor expects revenues between $1.40 billion and $1.50 billion. Non-GAAP earnings for the second quarter of 2025 are envisioned between 48 cents per share and 58 cents per share.
The Zacks Consensus Estimate for second-quarter 2025 revenues is pegged at $ 1.45 billion, suggesting a 16.48% decline from the year-ago quarter’s reported figure.
The consensus mark for earnings is pegged at 54 cents per share, implying a steep 43.75% decline from the year-ago quarter’s reported figure. However, the earnings figure inched up by a penny over the past 30 days.
Can ON’s SiC Leadership Boost Prospects?
ON Semiconductor is experiencing robust momentum in its Silicon Carbide (SiC) portfolio. In the first quarter of 2025, ON Semiconductor acquired Qorvo’s SiC JFET assets, which strengthens its SiC offerings. For its fourth-gen Trench SiC MOSEFT, the company secured a major design win with a leading U.S. OEM for a PHEV platform.
ON Semiconductor is targeting a 35-40% market share in the near future and has recently started seeing revival in the China market, with 50% of new EV models in China expected to have ON’s SIC in it, thus signalling strong global traction.
ON Semiconductor’s SiC and silicon-based intelligent power portfolio is being increasingly adopted in UPS systems, power supply units and battery backup units as they are engineered for high efficiency and high-density applications. Sic JFET and T10 trench MOSFET provide industry-leading performance by offering the lowest on-resistance and reducing switch losses, respectively. These high-performing solutions helped ON Semiconductor secure business with the three largest UPS providers, thus deepening market penetration.
Zacks Rank
ON Semiconductor currently has a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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ON Semiconductor Plunges 35% YTD: Buy, Sell or Hold the Stock?

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MagnaChip Semiconductor Q1 25 Earnings Conference Call At 5:00 PM ET

Fortinet Inc. FTNT reported strong first-quarter 2025 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate and improved year over year.
Fortinet reported first-quarter 2025 non-GAAP earnings per share (EPS) of 58 cents, which beat the Zacks Consensus Estimate by 9.43%. The bottom line climbed 34.9% from the year-ago quarter’s earnings of 43 cents.
See the Zacks Earnings Calendar to stay ahead of market-making news.
Total revenues of $1.54 billion beat the consensus mark by 0.21% and improved 13.8% year over year, driven by strong growth in services and product revenues.
In the first quarter, Fortinet added more than 6,300 new logos, driven by continued worldwide investments in its channel partners.
RPO grew 12% to $6.5 billion and total billings rose 14% to $1.6 billion, driven by double-digit growth in AI-driven SecOps and Unified SASE.
Fortinet, Inc. Price, Consensus and EPS Surprise
Fortinet, Inc. price-consensus-eps-surprise-chart | Fortinet, Inc. Quote
FTNT Quarter in Detail
Segment-wise, Product revenues increased 12.3% year over year to $459.1 million, driven by growth in both hardware and software solutions. FortiGate hardware revenues grew outpacing total product revenue growth, driven by strong performance in low-end and high-end models. Software license revenue growth was driven by on-prem, time-based software license growth of more than 30%.
Service revenues of $1.08 billion grew 14.4% year over year, accounting for 70% of total revenues. Security subscriptions revenues rose 16%, and support and related service revenues increased 12%. Service billings grew 14%, which was Fortinet’s highest growth rate in the past 5 quarters.
Unified SASE and Security Operations gained considerable traction, with security service edge billings growth of more than 110%, which drove FTNT’s Unified SASE billings growth to 18%, accounting for 25% of the business.
AI-driven Security Operations billings increased 29%, accounting for 10% of FTNT’s business, driven by customers continuing to consolidate multiple security vendors on the company’s integrated and AI-enhanced FortiFabric solution.
Margins of FTNT
Total gross margin increased 380 basis points (bps) to 81.9% and exceeded the high end of the guided range by 90 bps.
Product gross margin of 67.7% increased 1,200 bps as inventory-related charges normalized from last year’s highly elevated levels, adding 1,300 bps to product gross margin and 400 bps to total gross margin.
Service gross margin of 87.8% decreased 10 bps, as Fortinet absorbed increased costs associated with the expansion of hosted security solutions.
Operating margin increased 570 bps to a first-quarter record of 34.2% and was 320 bps above the high-end of the company’s guidance, reflecting the strong gross margin, a Fx tailwind of 100 bps, as well as cost efficiencies in the business.
FTNT Balance Sheet & Cash Flow
Fortinet exited the first quarter of 2024 with cash and cash equivalents and short-term investments of $4.78 billion, up from the $4 billion reported at the end of the fourth quarter of 2024.
Cash flow from operations was $863.3 million for the first quarter of 2025 compared with $830.4 million for the same quarter of 2024.
Free cash flow was $782.8 million for the first quarter of 2025 compared to $608.5 million for the same quarter of 2024.
FTNT Provides Guidance for Q2 & 2025
Fortinet estimates second-quarter revenues in the range of $1.59-$1.65 billion. Billings are estimated in the band of $1.685-$1.765 billion.
The non-GAAP gross margin is expected in the range of 80-81%, while the non-GAAP operating margin is anticipated between 31.5% and 32.5%. Non-GAAP EPS is projected in the band of 58-60 cents.
For 2025, FTNT predicts revenues in the range of $6.65-$6.85 billion. Services revenues are projected in the range of $4.575-$4.725 billion. Billings are expected in the band of $7.2-$7.4 billion.
The non-GAAP gross margin is expected in the range of 79-81%, and the operating margin is projected in the band of 31.5-33.5%. Non-GAAP EPS is anticipated between $2.43 and $2.49.
FTNT Zacks Rank & Stocks to Consider
Currently, Fortinet carries a Zacks Rank #3 (Hold).
Chegg CHGG, GCT Semiconductor Holding, Inc. GCTS and Magnachip Semiconductor MX are some better-ranked stocks that investors can consider in the broader Computer and Technology sector.
While MX sports a Zacks Rank #1 (Strong Buy), CHGG and GCTS carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Chegg shares have lost 55.7% year to date. CHGG is set to report first-quarter 2025 results on May 12.
Shares of GCT Semiconductor Holding, Inc. have lost 38.7% year to date. GCTS is set to report first-quarter 2025 results on May 14.
Magnachip Semiconductor shares have lost 20.2% year to date. MX is set to report first-quarter 2025 results on May 12.
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Fortinet Q1 Earnings Surpass Expectations, Sales Increase Y/Y

Jack Henry & Associates JKHY reported third-quarter fiscal 2025 GAAP earnings of $1.52 per share, beating the Zacks Consensus Estimate by 17.83%. The figure jumped 27.7% year over year.
Jack Henry & Associates’ revenues of $585.1 million missed the Zacks Consensus Estimate by 0.3%. The figure increased 8.6% year over year.
After adjusting for deconversion revenues of $9.6 million, non-GAAP revenues were $575.4 million, up 7% year over year.
Following the release, JKHY shares were almost unchanged in the pre-market trading. However, shares of Jack Henry & Associates have declined 1.8% in the year-to-date period, outperforming the Zacks Computers - IT Services industry’s fall of 9.3%.
Jack Henry & Associates, Inc. Price, Consensus and EPS Surprise
Jack Henry & Associates, Inc. price-consensus-eps-surprise-chart | Jack Henry & Associates, Inc. Quote
JKHY’s Q3 Top-Line Details
Revenues from Services and Support (56.5% of total revenues) were $330.8 million, up 8.5% year over year, primarily driven by growth in data processing and hosting revenues. The figure missed the consensus mark of $332 million.
Third-quarter fiscal 2025 revenues from Processing (43.5% of total revenues) were $254.3 million, up 8.9% year over year, primarily driven by growth in card, transaction and digital, and payment processing revenues. The figure marginally surpassed the consensus mark of $253 million.
Revenues from Core segments (30.9% of total revenues) in the third quarter of fiscal 2025 were $180.7 million, up 8.4% year over year. Revenues from Payments (37.2% of total revenues) were $217.4 million, which rose 7.7% year over year. Revenues from Complementary (28.6% of total revenues) were $167.4 million, up 12.2% year over year.
Revenues from Corporate and Other (3.3% of total revenues) were $19.5 million, down 6.2% year over year.
JKHY’s fiscal third-quarter adjusted EBITDA was $182.9 million, up 12.8% year over year. The adjusted EBITDA margin expanded 160 basis points (bps) year over year to 31.8%.
Adjusted operating income increased 17.6% year over year to $131.9 million. The adjusted operating margin increased 210 bps year over year to 22.9%.
Jack Henry & Associates’ Balance Sheet & Cash Flow
As of March 31, 2025, JKHY’s cash and cash equivalents were $39.9 million compared with $25.7 million as of Dec. 31, 2024.
Current and long-term debt was $170 million as of March 31, 2025, higher than $150 million as of Dec. 31, 2024.
JKHY Lowers 2025 Guidance
For fiscal 2025, Jack Henry & Associates lowered its GAAP revenue guidance to $2.37-$2.35 billion, down from the prior quarter's view of $2.39-$2.37 billion.
JKHY expects non-GAAP revenues of $2.34-$2.33 billion for fiscal 2025, revised down from the previous guidance of $2.38-$2.35 billion.
The Zacks Consensus Estimate for revenues is pegged at $2.38 billion, suggesting a year-over-year rise of 7.23%.
The GAAP operating margin is anticipated between 23.7% and 23.5%. The adjusted operating margin is expected between 23.1% and 23%.
Management expects GAAP earnings 2025 of $6.09-$6.00 per share for fiscal, up from the previously stated $5.87-$5.79.
Non-GAAP earnings for fiscal 2025 are projected to be $5.87-$5.83 per share, raised from the previously mentioned $5.74-$5.65.
The Zacks Consensus Estimate for earnings is pegged at $5.70 per share, indicating a year-over-year increase of 8.99%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Zacks Rank & Stocks to Consider
Currently, JKHY carries a Zacks Rank #4 (Sell).
Magnachip Semiconductor MX, Sprout Social SPT and TaskUs TASK are some better-ranked stocks in the broader Zacks Computer and Technology sector.
Magnachip Semiconductor sports a Zacks Rank #1 (Strong Buy) at present, and Sprout Social and TaskUs carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Magnachip Semiconductor is scheduled to report first-quarter 2025 results on May 12, while Sprout Social and TaskUs are set to release first-quarter 2025 results on May 8 and May 12, respectively.
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Jack Henry & Associates Q3 Earnings Beat Estimates, Revenues Rise Y/Y

(RTTNews) - MagnaChip Semiconductor Corp. (MX) will host a conference call at 5:00 PM ET on October 30, 2024, to discuss Q3 24 earnings results.
To access the live webcast, log on to https://investors.magnachip.com/events-and-presentations/events
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MagnaChip Semiconductor Q3 24 Earnings Conference Call At 5:00 PM ET

This analog/mixed signal semiconductor market as a whole should continue to strengthen through year-end, as inventories in the computing and smartphone markets (two of the biggest chip consumers) were worked down in second-half 2023 and industrial inventories were worked down in the first half of 2024.
The World Semiconductor Trade Statistics (WSTS), which supplies data to the Semiconductor Industry Association (SIA), is projecting double-digit growth in semiconductors this year on the back of a 76.8% jump in memory demand and a 10.7% increase in logic demand. Discrete, sensors, optoelectronics and analog are expected to see single-digit declines. The Americas and Asia, posting strong double-digit growth, will drive demand, Europe is expected to barely hold its own while Japan declines.
For the analog/mixed signal group, the going is likely to be less smooth. That’s because many of these players have increased their exposure to auto and industrial markets, where design wins have more shelf life. The industrial end market is sluggish, notwithstanding the fact that growth prospects over the next 5-10 years remain excellent, because of the adoption of new technologies like AI-ML, EVs, smart cities, IoT, etc.
While companies remain cautious regarding macro and geopolitical developments, the latest results indicate that we are past the trough in this cycle. We are keeping our eyes on Magnachip Semiconductor MX and Analog Devices ADI.
About the Industry
The electronic gadgets we use to accurately read our commands, and record, store, retrieve and process the information we throw at them run on semiconductor technology, whether analog (enabling the recording and measurement of real-world information), digital (processing information available in machine-readable language) or mixed signal (enabling conversion of analog signals to digital or digital to analog, among other things). Most electronic gadgets use a combination of these components, whether in consumer, industrial, auto, medical, communications or IoT and other markets.
The industry is cyclical and prices are elastic. Players usually serve multiple markets that offset their individual seasonality, or focus on certain core markets for which they have highly differentiated technology and relationships.
Growth Prospects Tempered by Macro and Geopolitics
The semiconductor market is expected to post strong growth this year. Gartner estimates that revenue growth will be 17.4% in 2024, as memory comes off a very bad 2023 amid weak demand that led to an inventory glut. With memory bouncing 70.5%, that situation will turn around. The non-memory segment will grow 6.2% -- not too bad considering that world economies are not in a very good place this year. The return to growth in the analog/mixed signal market is reflected in end-market demand. PCs have been weak for a while now (Gartner estimates that this year, growth will be facilitated by on-device AI. IDC estimates that the commercial refresh will stretch out to 2025 when Windows 10 support ends.) Smartphone growth is expected to accelerate this year on the back of higher-end AI phones and resurgent Chinese players (4% growth in 2024 and 2.3% CAGR for the next five years, according to IDC). Overall, TechInsights forecasts automotive chip demand growth of 13.2% in 2024. Between 2024 and 2028, auto chip demand and revenue are expected to grow at an average CAGR of 11.8% and 12.4%, respectively. IoT, cloud and defense are other fast-growing segments. AI is likely to remain a big driver across multiple end markets. According to Gartner, AI chips will grow 33% this year, with 47% of total AI chip revenue coming from the PC market. By 2026-end, all enterprise PC purchases will be AI PCs. Only 5% of companies were using generative AI in 2023, which will grow to 80% by 2026. Technological innovation in the form of the metaverse, digital health, EVs and other innovative transportation, and sustainability considerations are secular drivers. Uncertainties related to dealing with China remain.
While companies have started benefiting from declining channel inventory in the industrial end-market, macro and geopolitical uncertainty remains. The high interest rate in the U.S. is leading to lower investment at manufacturing companies and depressing employment numbers. Both ISM and S&P Global are reporting the sharpest PMI contraction in July. Even if the interest rate comes down in the remaining months of the year, its unlikely that the industry will snap back immediately. Therefore, this year is likely to remain weak for this end market, with the possibility of improvement next year, if interest rates recede as broadly expected.
In general, semiconductor pricing is robust when capacity is tight and utilization high. However, companies start adding capacity when they anticipate the next big growth cycle which usually continues for several years. AI is the main driver of the current build cycle and significant capacity is being built up today because it will have to suffice for years to come. While new fab construction, often supported by government initiatives, and their equipping is necessary to drive future growth, it brings additional capacity online, which is a negative for near-term pricing.
An emerging issue that semiconductor players are particularly exposed to is geopolitical tensions. The semiconductor supply chain is globally distributed, which means that international relations need to be maintained to ensure that work continues without disruption. While the Russia-Ukraine war didn’t have that much of an impact, the souring of relations between the U.S. and China is another story. If China really tries to take control of Taiwan as many experts expect it will, there could be a terrible war that will be highly disruptive of the global economy and especially of the chip sector. That’s because a leading share of advanced node chips are made on the island. Another geopolitical concern is the increasing awareness among all leading nations of the larger role that semiconductors are playing in AI-driven electronic weaponry and surveillance mechanisms. As the importance of semiconductors in defense grows, the rebalancing of the semiconductor supply chain to onshore or near-shore production also increases. The CHIPS Act may resolve imbalances arising out of increased capacity depressing prices as U.S. production increases costs. In the meantime, U.S. restrictions on trading with China remains a headwind for some.
Zacks Industry Rank Indicates Dismal Prospects
The Zacks Semiconductor – Analog and Mixed industry is housed within the broader Zacks Computer and Technology sector. It carries a Zacks Industry Rank #220, which places it in the bottom 12% of the 250-odd Zacks-classified industries. The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates weak near-term prospects.
Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1. The industry’s positioning in the bottom 50% of Zacks-ranked industries is based on the earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions over the past year, we see that analyst opinion about the outlook for both 2024 and 2025 has materially deteriorated, and particularly since July 2023. Overall, the 2024 estimates have dropped 32% over the past year, while the 2025 estimates have dropped 27.7%.
Before we present a few stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.
Stock Market Performance
The Semiconductor – Analog and Mixed industry currently trades at a discount to both the broader Zacks Computer and Technology sector and the S&P 500. Further, it appears that since the start of this year, it has leveled with the S&P 500 at times, but always traded at a much lower multiple than the sector.
Overall, the industry gained 18.3% over the past year while the broader sector gained 30.3% and the S&P 500 24.9%.
One-Year Price Performance
Image Source: Zacks Investment Research
Industry's Current Valuation
On the basis of forward 12-month price-to-earnings (P/E) ratio, the industry is trading at a 29.1X multiple, which is a premium to the S&P 500’s 21.7X and a discount to the broader computer and technology sector’s 26.1X. At the current level, it is also trading at a premium to its median level of 26.7X over the past year.
The industry has traded between the 15.9X and 29.1X multiples over the past year.
Forward 12 Month Price-to-Earnings (P/E) Ratio
Image Source: Zacks Investment Research
2 Stocks to Keep an Eye On
Given the deterioration in the outlook, there are currently no buy-ranked stocks in the sector. However, a couple of stocks with good long-term potential may be worth looking at:
Analog Devices, Inc. (ADI): Norwood, MA-based Analog Devices is an original equipment manufacturer of analog, mixed signal and digital signal processing (DSP) integrated circuits, including amplifies, converters, CODECs, embedded processing products, DSPs, MEMS and temperature sensors, thermal management products, RF/IF components, filters and processors. it has direct sales offices, sales representatives and distributors in more than 50 countries worldwide.
The company is well positioned for the long term with its product development, customer engagement, manufacturing capacity and balance sheet strength. Although economic and geopolitical factors will continue to impact the rate of recovery, the above-expectation results in the last quarter including the order momentum across end markets and improving customer inventories point to early signs of a cyclical recovery. The difficulty in predicting macro conditions keeps us on the sidelines.
Analog Devices beat earnings estimates by 5.3% in the third quarter, with fiscal 2024 (ending October) estimates increasing 9 cents (1.4%) and 2025 estimates dropping 53 cents (6.6%) in the last 30 days. The 2024 estimate is up 11 cents (1.8%) from 90 days ago.. While revenue and earnings for 2024 are expected to decline a respective 23.8% and 37.3%, they’re expected to grow 9.6% and 18.6% in the following year.
ADI shares, ranked #3, have appreciated 28.7% in the past year.
Price and Consensus: ADI
Image Source: Zacks Investment Research
Magnachip Semiconductor Corp. (MX): Cheongju, South Korea-based Magnachip Semiconductor designs and manufactures analog and mixed-signal semiconductor platform solutions for consumer, computing and industrial (including IoT and automotive) electronics OEMs, ODMs and EMS companies, as well as subsystem designers in Korea, the Asia Pacific, the U.S. and Europe. The company sells its products through a direct sales force, as well as through a network of agents and distributors.
The bulk of revenue comes from its Power Solutions business, which returned to growth in the last quarter as leaner channel inventories, seasonality and new products helped turn the business around. The improvement was across industrial, communication and consumer markets. The auto market also rebounded with new design wins in both China and Japan. Solar prospects also improved. The strength in the display business came from China smartphones, European autos and improved demand for power chips used in OLED IT panels and LED TVs. The phase-out of Transitional Foundry Services will negatively impact revenue this year. The new product innovation, design win momentum and lower inventories again appear to be signaling a cyclical recovery, as tempered by continued uncertainty related to macro and geopolitical tensions.
The company’s earnings beat the Zacks Consensus Estimate by 34.4% in the last quarter. The loss estimate for 2024 consequently declined 14 cents (12.6%) while that for 2025 remained steady in the last 90 days. Analysts expect that in 2024, the company’s top and bottom lines will decline 1.2% and 76.4%. For 2025, they will increase a respective 16.7% and 13.4%.
#3 (Hold) ranked Magnachip’s shares are down 42.4% over the past year.
Price and Consensus: MX
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Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.7% per year. So be sure to give these hand picked 7 your immediate attention.
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Analog Devices, Inc. (ADI) : Free Stock Analysis Report
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Macro, Geopolitics Limit 2024 Semiconductor Growth: 2 Stocks

Magnachip (MX) came out with a quarterly loss of $0.21 per share versus the Zacks Consensus Estimate of a loss of $0.32. This compares to loss of $0.06 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of 34.38%. A quarter ago, it was expected that this chip products maker would post a loss of $0.33 per share when it actually produced a loss of $0.28, delivering a surprise of 15.15%.
Over the last four quarters, the company has surpassed consensus EPS estimates four times.
Magnachip, which belongs to the Zacks Semiconductor - Analog and Mixed industry, posted revenues of $53.17 million for the quarter ended June 2024, surpassing the Zacks Consensus Estimate by 3.35%. This compares to year-ago revenues of $60.98 million. The company has topped consensus revenue estimates two times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Magnachip shares have lost about 34.4% since the beginning of the year versus the S&P 500's gain of 14%.
What's Next for Magnachip?
While Magnachip has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for Magnachip: mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is -$0.29 on $61.5 million in revenues for the coming quarter and -$1.11 on $236.35 million in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Semiconductor - Analog and Mixed is currently in the bottom 26% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
One other stock from the same industry, Analog Devices (ADI), is yet to report results for the quarter ended July 2024. The results are expected to be released on August 21.
This semiconductor maker is expected to post quarterly earnings of $1.50 per share in its upcoming report, which represents a year-over-year change of -39.8%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.
Analog Devices' revenues are expected to be $2.27 billion, down 26.1% from the year-ago quarter.
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Magnachip (MX) Reports Q2 Loss, Tops Revenue Estimates

Magnachip (MX) came out with a quarterly loss of $0.28 per share versus the Zacks Consensus Estimate of a loss of $0.33. This compares to loss of $0.24 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of 15.15%. A quarter ago, it was expected that this chip products maker would post a loss of $0.30 per share when it actually produced a loss of $0.21, delivering a surprise of 30%.
Over the last four quarters, the company has surpassed consensus EPS estimates four times.
Magnachip, which belongs to the Zacks Semiconductor - Analog and Mixed industry, posted revenues of $49.07 million for the quarter ended March 2024, surpassing the Zacks Consensus Estimate by 0.44%. This compares to year-ago revenues of $57.01 million. The company has topped consensus revenue estimates two times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Magnachip shares have lost about 34.5% since the beginning of the year versus the S&P 500's gain of 5.2%.
What's Next for Magnachip?
While Magnachip has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for Magnachip: mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is -$0.34 on $55.65 million in revenues for the coming quarter and -$1.19 on $237.2 million in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Semiconductor - Analog and Mixed is currently in the bottom 11% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Microchip Technology (MCHP), another stock in the same industry, has yet to report results for the quarter ended March 2024. The results are expected to be released on May 6.
This chipmaker is expected to post quarterly earnings of $0.57 per share in its upcoming report, which represents a year-over-year change of -65.2%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.
Microchip Technology's revenues are expected to be $1.33 billion, down 40.6% from the year-ago quarter.
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Magnachip (MX) Reports Q1 Loss, Tops Revenue Estimates

NXP Semiconductors (NXPI) came out with quarterly earnings of $3.24 per share, beating the Zacks Consensus Estimate of $3.18 per share. This compares to earnings of $3.19 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of 1.89%. A quarter ago, it was expected that this chipmaker would post earnings of $3.64 per share when it actually produced earnings of $3.71, delivering a surprise of 1.92%.
Over the last four quarters, the company has surpassed consensus EPS estimates four times.
NXP, which belongs to the Zacks Semiconductor - Analog and Mixed industry, posted revenues of $3.13 billion for the quarter ended March 2024, missing the Zacks Consensus Estimate by 0.02%. This compares to year-ago revenues of $3.12 billion. The company has topped consensus revenue estimates three times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
NXP shares have added about 5.7% since the beginning of the year versus the S&P 500's gain of 6.9%.
What's Next for NXP?
While NXP has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for NXP: unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $3.15 on $3.12 billion in revenues for the coming quarter and $13.72 on $13.23 billion in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Semiconductor - Analog and Mixed is currently in the bottom 10% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
One other stock from the same industry, Magnachip (MX), is yet to report results for the quarter ended March 2024. The results are expected to be released on May 2.
This chip products maker is expected to post quarterly loss of $0.33 per share in its upcoming report, which represents a year-over-year change of -37.5%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.
Magnachip's revenues are expected to be $48.85 million, down 14.3% from the year-ago quarter.
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NXP Semiconductors (NXPI) Beats Q1 Earnings Estimates

For Immediate Release
Chicago, IL – April 23, 2024 – Today, Zacks Equity Research discusses Magnachip Semiconductor MX and Analog Devices ADI.
Industry: Semiconductors
Link: https://www.zacks.com/commentary/2258967/inventory-macro-mar-solid-2024-outlook-for-semiconductors
This year is likely to be much better than the last for the semiconductor market as a whole, as inventories in the computing and smartphone markets (two of the biggest chip consumers) were worked down in second-half 2023. The World Semiconductor Trade Statistics (WSTS), which supplies data to the Semiconductor Industry Association (SIA), is projecting double-digit growth in semiconductors this year on the back of a 40% jump in memory demand.
Discrete, sensors, analog, logic and micro are also expected to grow, albeit at single-digit percentage rates. While growth will be across geographies, the Americas and Asia will post strong double-digit growth.
For the Analog/mixed signal group, however, the going is likely to be less smooth. That's because many of these players have increased their exposure to auto and industrial markets, where design wins have more shelf life. The industrial end market is pulling the industry down -- notwithstanding the fact that growth prospects over the next 5-10 years remain excellent -- because of the adoption of new technologies like AI-ML, EVs, smart cities, IoT, etc.
The fourth quarter was likely the bottom for this industry, according to market research firms. Macro-related uncertainties remain, however, limiting growth. Magnachip Semiconductor and Analog Devices are worth keeping an eye on.
About the Industry
The electronic gadgets we use to accurately read our commands, and record, store, retrieve and process the information we throw at them run on semiconductor technology, whether analog (enabling the recording and measurement of real-world information), digital (processing information available in machine-readable language) or mixed signal (enabling conversion of analog signals to digital or digital to analog among other things). Most electronic gadgets use a combination of these components, whether in consumer, industrial, auto, medical, communications, or IoT and other markets.
The industry is cyclical and prices are elastic. Players usually serve multiple markets that offset their individual seasonality, or focus on certain core markets for which they have highly differentiated technology and relationships.
Major Themes Impacting the Industry
The semiconductor market is expected to return to growth this year. Gartner estimates that growth will be 16.8% in 2024, as memory comes off a very bad 2023 amid weak demand that led to an inventory glut. With memory bouncing 66.3%, that situation will turn around. The return to growth in the analog/mixed signal market is reflected in end-market demand. PCs have been weak for a while now (Gartner estimates that growth returned in fourth-quarter 2023 as inventory was worked down. This year, growth will be facilitated by on-device AI. IDC estimates that the PC market returned to growth in first-quarter 2024, eclipsing pe-pandemic levels. There's the possibility of commercial refresh stretching out to 2025 when Windows 10 support ends, and AI integration, the biggest driver this year. Both firms expect that the new AI PCs will have higher price tags, a positive for PC and component makers.) Smartphone growth is expected to accelerate this year on the back of higher-end AI phones and resurgent Chinese players (3.8% growth in 2024 and 1.4% CAGR for the next five years, according to IDC). Ongoing inventory adjustment is the main reason for softness in the industrial market, with macro-related uncertainty continuing. Other markets like automotive, IoT, cloud and AI are better off. AI in particular is a boom market as of now. According to Gartner, only 5% of companies were using generative AI in 2023, which will grow to 80% by 2026. AI semiconductors will be 20% of total semiconductor sales by 2027, estimates Statista (as quoted in Nikkei). Technological innovation in the form of the metaverse, digital health, EVs and other innovative transportation, and sustainability considerations are secular drivers. Uncertainties related to dealing with China remain.
Ongoing macro concerns continue to impact suppliers in the industrial end-market. While manufacturing PMI has entered positive territory according to both ISM and S&P Global, and some semiconductor component suppliers are encouraged about a stronger second half to this year, there remains some channel inventory which adds uncertainty, particularly in the face of broader economic concerns.
In general, semiconductor pricing is robust when capacity is tight and utilization high. However, companies start adding capacity when they anticipate the next big growth cycle which usually continues for several years. AI is the main driver of the current build cycle and it is expected to expand continually in the foreseeable future. Therefore, significant capacity is being built up today because it will have to suffice for years to come. And while new fab construction, often supported by government initiatives, and their equipping is necessary to drive future growth, it brings additional capacity online, which is a negative for near-term pricing.
An emerging issue that semiconductor players are particularly exposed to is geopolitical tensions. The semiconductor supply chain is globally distributed, which means that international relations need to be maintained to ensure that work continues without disruption. While the Russia-Ukraine war didn't have that much of an impact, the souring of relations between the U.S. and China is another story. If China really tries to take control of Taiwan as many experts expect it will, there could be a terrible war that will be highly disruptive of the global economy and especially of the chip sector. That's because a leading share of advanced node chips are made on the island. Another geopolitical concern is the increasing awareness among all leading nations of the larger role that semiconductors are playing in AI-driven electronic weaponry and surveillance mechanisms. As the importance of semiconductors in defense grows, the need to onshore or near-shore production is being felt. This is leading to rebalancing of the semiconductor supply chain not from a cost-reduction perspective but with a far more strategic objective. So the government is trying to incentivize companies to build in the U.S. TSM, the main supplier to the U.S. is setting up in the country but the plan is to have this on a much larger scale. The CHIPS Act may help a difficult situation where increased capacity would depress prices while U.S. production would increase costs. In the meantime, the U.S. has ordered restrictions on trading with China, which remains a headwind for players.
Zacks Industry Rank Indicates Dismal Prospects
The Zacks Semiconductor – Analog and Mixed industry is housed within the broader Zacks Computer and Technology sector. It carries a Zacks Industry Rank #242, which places it in the bottom 3% of the 250 odd Zacks-classified industries.
The group's Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates weak near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.
The industry's positioning in the bottom 50% of Zacks-ranked industries is based on the earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions over the past year, we see that analyst opinion about the outlook for both 2023 and 2024 has materially deteriorated, and particularly since July 2023. Overall, the 2024 estimates have dropped 31.9% over the past year, while the 2025 estimates have dropped 24.1%.
Before we present a few stocks that you may want to consider for your portfolio, let's take a look at the industry's recent stock-market performance and valuation picture.
Stock Market Performance Continues to Lag
The Semiconductor – Analog and Mixed industry currently trades at a discount to both the broader Zacks Computer and Technology sector and the S&P 500. However, looking at its performance over the past year, it appears that while it has reached the level of the S&P 500 at times, the sector has been trading at a much higher multiple throughout.
Overall, the industry gained 5% over the past year while the broader sector gained 35.9% and the S&P 500 20.8%.
Industry's Current Valuation
On the basis of forward 12-month price-to-earnings (P/E) ratio, the industry is trading at a 23.5X multiple, which is a premium to the S&P 500's 20.2X and a discount to the broader computer and technology sector's 24.8X. At the current level, it is also trading at a premium to its median level of 19.9X over the past year.
The industry has traded between the 15.9X and 26.8X multiples over the past year.
2 Stocks to Keep an Eye On
Given the deterioration in the outlook, there are currently no buy-ranked stocks in the sector. However, a couple of stocks with good long-term potential may be worth looking at:
Magnachip Semiconductor Corp.: Cheongju, South Korea-based Magnachip Semiconductor designs and manufactures analog and mixed-signal semiconductor platform solutions for consumer, computing and industrial (including IoT and automotive) electronics OEMs, ODMs and EMS companies, as well as subsystem designers in Korea, the Asia Pacific, the U.S. and Europe. The company sells its products through a direct sales force, as well as through a network of agents and distributors.
The bulk of revenue comes from its Power Solutions business, which remains under pressure from inventory rebalancing at industrial customers (particularly China's e-bike market and weakness in solar). Magnachip is however seeing continued momentum in design wins, particularly at auto OEMs. The OLED business remains slow although the company secured a couple of design wins in China.
The phase-out of Transitional Foundry Services will negatively impact revenue this year. Therefore, the longer-term prospects as seen from new product innovation and design win momentum are strong, although macro concerns and inventory rebalancing could mean that near-term numbers will move around a little bit.
The company's 2024 estimate has dropped 61 cents (105%) in the last 60 days. Analysts expect that in 2024, the company's top line will grow 3.1% while the bottom line falls 116.4%. For 2025, the top and bottom lines will increase a respective 12.6% and 26.1%.
#3 (Hold) ranked Magnachip's shares are down 46.9% over the past year.
Analog Devices, Inc.: Norwood, MA-based Analog Devices is an original equipment manufacturer of analog, mixed signal and digital signal processing (DSP) integrated circuits, including amplifies, converters, CODECs, embedded processing products, DSPs, MEMS and temperature sensors, thermal management products, RF/IF components, filters and processors. it has direct sales offices, sales representatives and distributors in more than 50 countries worldwide.
The company is well positioned for the long term with its product development, customer engagement, manufacturing capacity and balance sheet strength. However, inventories and industrial customers are still being worked down, something management expects will be mostly complete in the current quarter. Based on the fact that industrial bookings started picking up in the current quarter and continued strength in other areas, particularly EVs, it does appear that estimates have bottomed for now, which creates the impression that things go up from here. However macro conditions are hard to predict, which keeps us on the sidelines.
Analog Devices beat earnings estimates by a sliver in the first quarter and estimates for both 2024 and 2025 have dropped sharply since. In the last 60 days, the 2024 estimates dropped $1.08 (15.6%) while the 2025 estimate dropped 91 cents (10.7%). While revenue and earnings for 2024 are expected to decline a respective 25.6% and 41.9%, they're expected to grow 11.9% and 29.8% the following year.
ADI shares, ranked #3, have declined 1.9% in the past year.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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