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Nordic Semiconductor ASA NOD

Morningstar Rating
NOK 90.02 −0.22 (0.24%)
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Company Report

We Decrease Nordic's Fair Value to NOK 127; High Inventory Levels Drag on Revenue and Margins

Nordic Semiconductor designs Bluetooth Low Energy chips, the main source of its narrow-moat and with 40% market share. During the past decade we believe Nordic Semiconductor has made a handful of good decisions. The first was to bet early in the BLE market around 2009, which is the standard for short-range communications in battery-powered devices thanks to good data throughput and easy installation. Second, Nordic switched from selling application-specific integrated circuit chips, or ASICs, where each chip is designed for a specific customer and application, to selling application-specific standard products, or ASSPs, which can be used by a wide range of customers and applications. These two decisions have caused Nordic’s revenue to multiply by 5 times since 2014. We also support Nordic’s decision to use distributors as its main sales channel, whereas larger competitors like Qualcomm or Broadcom are less interested given distributors only represent 25% of global chip sales and serve many small and midsize customers.

Price vs Fair Value

NOD is trading at a 29% discount.
Price
NOK 90.24
Fair Value
NOK 571.00
Uncertainty
High
1-Star Price
NOK 789.89
5-Star Price
NOK 32.30
Economic Moat
Mcqncx
Capital Allocation
Qrmxcwh

Bulls Say, Bears Say

Bulls

Nordic is the leader in Bluetooth Low Energy, a market with double-digit growth rates where Nordic enjoys 40% market share. Nordic’s top-line growth should remain healthy in the next decade.

Bears

Nordic’s position in the semiconductor supply chain is weak. Foundries might prioritize larger players such as automobile companies, which use similar manufacturing technologies as Nordic. Nordic has historically had one foundry supplier. In 2022 it brought in two more to diversify its supply chain.

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News

Trading Information

Previous Close Price
NOK 90.24
Day Range
NOK 88.1491.40
52-Week Range
NOK 76.96154.40
Bid/Ask
NOK 89.82 / NOK 90.04
Market Cap
NOK 17.27 Bil
Volume/Avg
75,250 / 806,226

Key Statistics

Price/Earnings (Normalized)
25.87
Price/Sales
3.07
Dividend Yield (Trailing)
Dividend Yield (Forward)
Total Yield

Company Profile

Nordic Semiconductor has a leading market share in the design of Bluetooth Low Energy chips for the wireless industry, making 90% of its revenue from this technology. Nordic’s chips are used in all types of battery-powered devices such as wearables, smarthome applications, asset trackers, and industrial and healthcare markets. In recent years Nordic has also expanded into adjacent technologies such as Wi-Fi, thread protocol, and long-range connectivity. In 2022 Nordic generated almost $800 million in revenue.
Sector
Technology
Industry
Semiconductors
Stock Style Box
Small Core
Total Number of Employees
1,493

Competitors

Valuation

Metric
NOD
AVGO
2454
Price/Earnings (Normalized)
25.8730.9721.33
Price/Book Value
2.878.854.56
Price/Sales
3.0714.923.88
Price/Cash Flow
77.9228.7018.06
Price/Earnings
NOD
AVGO
2454

Financial Strength

Metric
NOD
AVGO
2454
Quick Ratio
3.890.831.04
Current Ratio
5.341.331.25
Interest Coverage
2.056.63200.00
Quick Ratio
NOD
AVGO
2454

Profitability

Metric
NOD
AVGO
2454
Return on Assets (Normalized)
1.47%20.50%12.60%
Return on Equity (Normalized)
1.97%59.22%20.78%
Return on Invested Capital (Normalized)
1.09%26.13%17.89%
Return on Assets
NOD
AVGO
2454
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Semiconductors Industry Comparables

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Name
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
NVDA
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TSM
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AVGO
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MU
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ADI
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