Nordic Earnings: Still Suffering From Low Visibility and Poor Forecasting; Valuation Lowered

Narrow-moat Nordic Semiconductor reported a disappointing third quarter. Revenue was $135 million compared with expected guidance of $140 million to $160 million. The biggest hit, however, came from fourth-quarter guidance, with management guiding for a 30%-40% year-over-year decline when a few months ago it expected positive growth by the end of the year. We are reducing our medium-term revenue and margin forecasts and reducing our fair value estimate to NOK 145 from NOK 165. Shares are down 17% at the time of the writing to NOK 95, which we see as exaggerated despite the negative news.