Beamr video compression achieves up to 50% improvement for AVs
On Monday, Morgan Stanley (NYSE:MS) analysts revised their stance on Navitas Semiconductor (NASDAQ:NVTS), downgrading the stock from Equalweight to Underweight. Accompanying this downgrade is a reduction in the price target from $2.10 to $1.50. The stock, which has declined over 60% in the past year according to InvestingPro data, currently trades at $1.81 with a market capitalization of approximately $345 million. The firm’s updated outlook stems from a reevaluation of revenue forecasts for the years 2025 and 2026, citing concerns over the company’s growth and financial health.
Analysts at Morgan Stanley have adjusted their revenue estimates for Navitas Semiconductor from the previous $66.7 million and $81.2 million to $63.4 million and $73.5 million for 2025 and 2026, respectively. These new projections are 16% and 35% below the consensus estimates on Wall Street. The analysts expressed concerns regarding the trend of downward revisions to street estimates and the potential ramifications of stagnant revenue growth on the company’s balance sheet.
Despite Navitas Semiconductor’s efforts to reduce operating expenses, Morgan Stanley remains skeptical about the company’s ability to counterbalance the anticipated slower rate of revenue growth. The analysts predict that Navitas may need to raise equity during the 2026 calendar year to support its financial position. While the company maintains a strong current ratio of 5.69 and holds more cash than debt, InvestingPro analysis indicates persistent profitability challenges, with a return on equity of -23% and negative free cash flow yield.
In their commentary, Morgan Stanley analysts also addressed valuation multiples, opting to lower the forward FY26 enterprise value-to-sales (EV/Sales) multiple from 5x to 4x. This adjustment reflects a broader trend of multiple contraction among the company’s DeSPAC (post-special purpose acquisition company merger) and IPO (initial public offering) peers. The new multiple, applied to the reduced revenue forecast, justifies the lowered price target from $2.10 to $1.50. For deeper insights into Navitas Semiconductor’s valuation and 12+ additional ProTips, access the comprehensive Pro Research Report available exclusively on InvestingPro.
In other recent news, Navitas Semiconductor reported its Q4 2024 earnings, revealing a revenue of $18 million, which fell short of the expected $23.99 million, though the EPS of -$0.06 met market expectations. The company experienced a full-year revenue growth of 5%, reaching $83.3 million, despite facing increased operating expenses. Navitas has also appointed KPMG LLP as its new independent auditor, replacing Moss Adams LLP, with no disagreements reported between the company and the former auditor. Analysts from Baird have adjusted their price target for Navitas to $4.00, down from $5.00, while maintaining an Outperform rating, citing the company’s significant expansion in its customer pipeline. Jefferies analysts also revised their price target to $2.50, maintaining a Hold position due to concerns about excess inventory in certain segments. Navitas has amended its bylaws to shorten the notice period for director nominations, aiming to streamline its governance processes. The company continues to focus on growth in the data center market and anticipates achieving positive EBITDA by 2026.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.