Positives
Navitas Semiconductor is a leader in Gallium Nitride Power Circuits, with a long runway of growth compared to Silicon Carbide, which was the default standard in power chips.
GaN circuits offer better power density and sustainability, reducing costs.
Navitas’ integrated GaN circuits are vertical agnostic and serve the growing markets of industrial, IoT, Autos, EVs, and solar power.
Unlike indie Semiconductor, (INDI) which has a similar profile, Navitas is not limited to auto.
The diversity of end-user segments is very useful when some like mobility went through a downturn last year. Navitas is at a very attractive 6x P/S multiple with strong revenue growth of 54% ahead.
Unlike most of its competitors in GaN, Navitas was down 30% in the past year, and the downside looks very limited from this price.
Weaknesses
62% of their sales are to China.
Two years out to adjusted profitability – in a higher for longer interest rate environment, the stock could stay sideways even with improved performance.
Commodity-type business, high volumes, low margins, even with 250+patents and a large amount of R&D,
Lots of bigger competitors, like ON Semiconductor, Infineon, and Power Integrators.