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As the Q3 earnings season wraps, let’s dig into this quarter’s best and worst performers in the analog semiconductors industry, including Power Integrations (NASDAQ:POWI) 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 14 analog semiconductors stocks we track reported a satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 0.7% while next quarter’s revenue guidance was 8,316% above.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 13.8% since the latest earnings results.
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 $118.9 million, up 2.7% year on year. This print was in line with analysts’ expectations, but overall, it was a mixed quarter for the company with a significant improvement in its inventory levels but revenue guidance for next quarter missing analysts’ expectations significantly.
Power Integrations CEO Jennifer Lloyd commented: “Our industrial business remains on track for strong growth in 2025 after a 20 percent year-over-year increase in the third quarter, while orders for consumer appliances continue to be soft after accelerated shipments earlier in the year ahead of U.S. tariffs. Overall, we are on course for solid growth in 2025 despite the challenging economic backdrop, and remain focused on secular growth opportunities in high voltage, including GaN, grid modernization, electric transportation and data center. Last month we detailed the capabilities of our 1250- and 1700-volt PowiGaN™ technologies for next-gen AI data centers, including our collaboration with NVIDIA on 800 VDC power architecture.”
Unsurprisingly, the stock is down 14.7% since reporting and currently trades at $33.25.
Is now the time to buy Power Integrations? Access our full analysis of the earnings results here, it’s free for active Edge members.
Result of a merger of Alpha Industries and the wireless communications division of Conexant, Skyworks Solutions (NASDAQ: SWKS) is a designer and manufacturer of chips used in smartphones, autos, and industrial applications to amplify, filter, and process wireless signals.
Skyworks Solutions reported revenues of $1.1 billion, up 7.3% year on year, outperforming analysts’ expectations by 5.4%. The business had a stunning quarter with a beat of analysts’ EPS estimates and revenue guidance for next quarter exceeding analysts’ expectations.
Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 12.6% since reporting. It currently trades at $62.94.
Is now the time to buy Skyworks Solutions? Access our full analysis of the earnings results here, it’s free for active Edge members.
Serving major consumer electronics manufacturers, Universal Display (NASDAQ:OLED) is a provider of organic light emitting diode (OLED) technologies used in display and lighting applications.
Universal Display reported revenues of $139.6 million, down 13.6% year on year, falling short of analysts’ expectations by 15.9%. It was a disappointing quarter as it posted a significant miss of analysts’ revenue and adjusted operating income estimates.
Universal Display delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 15.4% since the results and currently trades at $114.64.
Read our full analysis of Universal Display’s results here.
Originally a temperature sensor control maker and a subsidiary of Texas Instruments for 60 years, Sensata Technology Holdings (NYSE: ST) is a leading supplier of analog sensors used in industrial and transportation applications, best known for its dominant position in the tire pressure monitoring systems in cars.
Sensata Technologies reported revenues of $932 million, down 5.2% year on year. This result surpassed analysts’ expectations by 1.1%. Taking a step back, it was a mixed quarter as it also produced a beat of analysts’ EPS estimates but revenue guidance for next quarter slightly missing analysts’ expectations.
The stock is flat since reporting and currently trades at $31.00.
Read our full, actionable report on Sensata Technologies here, it’s free for active Edge members.
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 $790.6 million, up 7.5% year on year. This print beat analysts’ expectations by 1.2%. Zooming out, it was a mixed quarter as it also logged an impressive beat of analysts’ adjusted operating income estimates but EPS in line with analysts’ estimates.
The stock is down 19.8% since reporting and currently trades at $12.92.
Read our full, actionable report on Vishay Intertechnology here, it’s free for active Edge members.
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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