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Magnachip Semiconductor Corp. (MX)
NYSE:MX
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MagnaChip
(NYSE:MX)
39Underperform
Positive Factors
Business Transition
The company will exit the Display business by 2Q25, shedding significant OpEx, and is committing significant resources to analog power manufacturing.
Product Stability
New OLED DDIC products are enabling stability in Smartphone Display revenue during a typically down period.
Revenue Growth
MagnaChip displays its first annual revenue growth since September 2021.
Negative Factors
Earnings Challenges
Gross margins are expected to be better than anticipated in the upcoming year but remain challenging in the following year.
Execution Risk
Waiting for management to execute on break-even targets and new product design win momentum before setting estimates closer to targets.
MagnaChip (MX) vs. S&P 500 (SPY)
Market Cap
$137.57M
Dividend YieldN/A
Average Volume (3M)252.26K
Price to Earnings (P/E)―
Beta (1Y)0.72
Revenue Growth1.88%
EPS Growth-64.63%
CountryUS
Employees881
SectorTechnology
Sector Strength46
IndustrySemiconductors
Share Statistics
EPS (TTM)-1.44
Shares Outstanding36,883,278
10 Day Avg. Volume268,044
30 Day Avg. Volume252,258
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.61
Price to Cash Flow (P/CF)3.00
P/FCF Ratio8.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$6.00Price Target Upside65.75% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
MagnaChip Business Overview & Revenue Model
Company DescriptionMagnaChip Semiconductor Corporation (MX) is a prominent South Korea-based semiconductor company that specializes in designing and manufacturing analog and mixed-signal semiconductor products. The company operates primarily in two segments: Display Solutions and Power Solutions. MagnaChip's core products include display drivers, power management integrated circuits, and other semiconductor components used extensively in consumer electronics, mobile devices, and industrial applications.
How the Company Makes MoneyMagnaChip generates revenue primarily through the sale of its semiconductor products. In the Display Solutions segment, the company earns money by providing display driver integrated circuits (DDICs) for organic light-emitting diode (OLED) and liquid crystal display (LCD) panels, which are widely used in smartphones, televisions, and other consumer electronics. In the Power Solutions segment, revenue is derived from selling power management integrated circuits (PMICs) and other power-related semiconductor products used in various electronic devices and industrial applications. Additionally, MagnaChip benefits from strategic partnerships and long-term supply agreements with leading electronics manufacturers, which help stabilize its revenue streams and expand its market reach.
MagnaChip Financial Statement Overview
Summary
MagnaChip faces financial challenges with declining revenues and negative profitability margins. The company has a strong equity position and low debt, but negative cash flows and decreasing stockholders' equity suggest liquidity risks.Income Statement
MagnaChip's income statement reveals a decline in revenue over recent years, with the TTM (Trailing-Twelve-Months) showing a slight revenue increase of 0.96% compared to the previous year. However, profitability remains a concern as the company has experienced negative net and operating income margins. The TTM gross profit margin stands at 22.57%, but net profit margin is negative, indicating issues with cost management and operational efficiency.40
Negative
Balance Sheet
The balance sheet highlights a strong equity position with an equity ratio of 72.95% in the TTM period, suggesting a low leverage risk. However, the declining stockholders' equity over the years indicates potential financial strain. The debt-to-equity ratio is low at 0.01, reflecting limited reliance on debt financing.45
Neutral
Cash Flow
Cash flow analysis shows a negative free cash flow in the TTM period, with a significant deterioration from the previous year. The operating cash flow to net income ratio is negative, indicating that the company is struggling with cash generation from its core operations. This poses a challenge to sustaining operations without external financing.30
Negative
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 231.74M | 230.05M | 337.66M | 474.23M | 507.06M | Gross Profit |
| 51.91M | 51.64M | 101.26M | 153.54M | 128.32M | EBIT |
| -53.03M | -57.64M | 1.30M | 53.68M | 27.02M | EBITDA |
| -53.03M | -30.05M | 13.28M | 89.58M | 40.16M | Net Income Common Stockholders |
| -54.31M | -36.62M | -8.04M | 56.71M | 57.06M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 138.61M | 158.09M | 225.48M | 279.55M | 279.94M | Total Assets |
| 379.32M | 420.49M | 516.64M | 583.65M | 571.69M | Total Debt |
| 3.22M | 4.81M | 5.49M | 4.28M | 88.11M | Net Debt |
| -135.39M | -153.28M | -219.99M | -275.27M | -191.83M | Total Liabilities |
| 102.52M | 75.89M | 88.49M | 130.89M | 226.09M | Stockholders Equity |
| 276.80M | 344.60M | 428.15M | 452.76M | 345.60M |
| Cash Flow | Free Cash Flow | |||
| -17.73M | -10.23M | -18.62M | 54.92M | -29.37M | Operating Cash Flow |
| -6.13M | -3.01M | 5.17M | 87.74M | 7.47M | Investing Cash Flow |
| -11.67M | -7.66M | -24.93M | -31.44M | 318.48M | Financing Cash Flow |
| 16.56M | -52.34M | -12.74M | -35.54M | -222.28M |
MagnaChip Technical Analysis
Negative
3.62
Price Trends
4.26
Negative
4.13
Negative
4.48
Negative
Market Momentum
-0.17
Positive
34.86
Neutral
16.06
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MX, the sentiment is Negative. The current price of 3.62 is below the 20-day moving average (MA) of 3.97, below the 50-day MA of 4.26, and below the 200-day MA of 4.48, indicating a bearish trend. The MACD of -0.17 indicates Positive momentum. The RSI at 34.86 is Neutral, neither overbought nor oversold. The STOCH value of 16.06 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MX.
MagnaChip Risk Analysis
MagnaChip disclosed 46 risk factors in its most recent earnings report. MagnaChip reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
MagnaChip Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $27.32B | 91.99 | 4.71% | 3.48% | -44.31% | -86.74% | |
67 Neutral | $18.44B | 12.04 | 18.97% | ― | -14.19% | -27.42% | |
64 Neutral | $2.14B | 48.68 | 2.49% | ― | -21.10% | -80.81% | |
58 Neutral | $21.67B | 10.60 | -18.43% | 2.42% | 4.66% | -24.45% | |
53 Neutral | $3.88B | ― | -16.69% | ― | -25.29% | -449.44% | |
50 Neutral | $3.20B | ― | -137.84% | ― | 4.66% | 84.78% | |
39 Underperform | $137.57M | ― | -17.48% | ― | 1.88% | -64.63% |
* Technology Sector Average
Performance Comparison
MX
MagnaChip
3.62
-2.03
-35.93%
DIOD
Diodes
46.23
-24.31
-34.46%
MCHP
Microchip
48.70
-38.86
-44.38%
ON
ON Semiconductor
40.94
-32.91
-44.56%
SMTC
Semtech
35.05
5.68
19.34%
SLAB
Silicon Laboratories
119.57
-22.41
-15.78%
MagnaChip Earnings Call Summary
Earnings Call Date: Mar 12, 2025 | % Change Since: -10.40% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Neutral
Magnachip's earnings call revealed a strategic pivot towards becoming a power-centric company, with notable revenue growth in Q4 2024 and strong MSS performance. However, the decision to review the display business, operating losses, and challenges from winding down the foundry services indicate significant hurdles. The sentiment is balanced with positive strategic initiatives but offset by current operational challenges.Highlights
New Strategy Announcement
Magnachip announced a new strategy to focus on becoming a pure play power company, prioritizing Power discrete and Power IC businesses to drive profitability and maximize shareholder value.
Revenue Growth in Q4 2024
Q4 revenue was $63 million, up 24% year-over-year, exceeding the midpoint of the guidance range.
Strong Growth in MSS Revenue
MSS revenue in Q4 was $17.3 million, up 102% year-over-year and 5.1% sequentially, driven by strength in automotive.
CEO and CFO Salary Cuts
CEO YJ Kim and CFO Shinyoung Park voluntarily cut their salaries by 20% and 10%, respectively, until the company achieves positive GAAP operating income for two consecutive quarters.
Three-Three-Three Strategy
Magnachip aims to reach a $300 million annual revenue run rate with a 30% gross margin in the next three years.
Lowlights
Display Business Under Review
Magnachip announced it is exploring strategic options for the display business, which will be classified as discontinued operations.
Operating Loss in Q4 2024
Q4 operating loss was $15.7 million, including a $4.6 million non-cash impairment charge related to the display business.
Wind Down of Transitional Foundry Services
The wind down of transitional foundry services impacted fab utilization and is expected to affect 2025 gross margins negatively.
Seasonal Decline in PAS Revenue
PAS business revenue was down 8.7% sequentially in Q4 due to seasonality.
Negative Adjusted EBITDA
Q4 adjusted EBITDA was negative $2.6 million, although it improved from negative $10 million in Q4 last year.
Company Guidance
In the call, Magnachip Semiconductor Corporation outlined its strategic shift to become a pure play power company, focusing on Power discrete and Power IC businesses. The company aims for a return to profitability with targets including quarterly adjusted EBITDA breakeven by the end of Q4 2025, positive adjusted operating income in 2026, and positive adjusted free cash flow in 2027. The company announced a new three-year "three-three-three" strategy, targeting a $300 million annual revenue run rate with a 30% gross margin. Additionally, they plan to invest $65 million to $70 million over the next three years to upgrade their Gumi fab, aiming to transition 50% of the fab's capacity to new generation power products by the end of 2026. For Q1 2025, Magnachip expects consolidated revenue from continuing operations to be between $42 million and $47 million, with a gross profit margin of 18.5% to 20.5%. The company also reported Q4 2024 revenue of $63 million, up 24% year-over-year, with a gross profit margin of 25.2%, exceeding their guidance range.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.