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Tuesday, Navitas Semiconductor (NASDAQ:NVTS) saw its price target reduced by Needham to $3.00 from the previous $4.00, while the firm retained a Buy rating on the company’s stock. The adjustment follows Navitas’ latest earnings report, which was strong, yet concerns about tariff volatility and a postponed solar BDS (Building-Integrated Photovoltaic) opportunity have led to a more cautious outlook on growth projections. According to InvestingPro data, the stock has declined 44% year-to-date, with analyst targets ranging from $1.50 to $4.25. Despite recent challenges, InvestingPro analysis suggests the stock is currently undervalued based on its Fair Value model.
The management at Navitas highlighted that the immediate impact of tariffs is largely confined to the Silicon Carbide (SiC) segment of the business. This risk is considered to be less than $10 million per year and would only become a reality if the ’country of origin’ designation for their products shifts from packaging to foundry operations. However, there is potential for broader implications if tariff disputes escalate, potentially affecting the Gallium Nitride (GaN) solar business and possibly the Artificial Intelligence Direct Current (AI DC) products, as these are imported into the United States. The Mobile division is deemed to be less vulnerable to these issues. InvestingPro data reveals the company maintains strong liquidity with a current ratio of 5.69 and holds more cash than debt on its balance sheet, providing some buffer against potential tariff impacts.
Needham’s analysts pointed out that Navitas’ supplier footprint exposes it to more direct risks from international trade uncertainties compared to other semiconductor companies they cover. This has prompted a more conservative stance for the second half of 2025 and the calendar year 2026 forecasts.
The revised price target of $3.00 is based on a six times multiple, which remains unchanged, of the new calendar year 2026 revenue estimate, now set at $95 million. The updated estimates and price target reflect the firm’s assessment of the potential impact of the ongoing tariff situation on Navitas’ business operations and growth trajectory.
In other recent news, Navitas Semiconductor Corp reported its first-quarter 2025 earnings, revealing a loss per share of $0.06 and revenue of $14 million, both aligning with market expectations. The company maintained its revenue forecast despite facing headwinds in the semiconductor industry. Navitas introduced significant innovations, including the first production release of a bidirectional GaN IC, which could potentially generate over $10 million in revenue by 2026. Additionally, the company anticipates growth in late 2025, driven by increased demand in solar and EV applications. The firm is targeting EBITDA breakeven by 2026 and provided revenue guidance for Q2 2025 in the range of $14 to $15 million. Navitas continues to focus on GaN and silicon carbide technologies, with a strong pipeline of design wins. The company also announced some board and executive changes to accelerate its transition to greater scale and profitability. Despite market challenges, Navitas remains optimistic about its future growth prospects.
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