With price pressures declining for six consecutive months, inflation seems to have already peaked. Morgan Stanley (MS) CEO James Gorman said, “Clearly, inflation peaked. That’s no longer a question; it’s a fact.” The cooling inflation should prompt the Fed to go for slower rate hikes.
Moreover, many experts now believe the U.S. can achieve a ‘soft landing.’ Given the tight labor market, White House economist Heather Boushey is optimistic about the country avoiding a recession altogether.
While the stock market suffered in 2022, the average target of strategists polled by Bloomberg has the S&P 500 ending 2023 about 6% higher than it ended the last year.
United Microelectronics Corporation (UMC)
Headquartered in Hsinchu City, Taiwan, UMC operates as a semiconductor wafer foundry in Taiwan, Singapore, China, Hong Kong, Japan, the United States, Europe, and internationally.
UMC’s forward EV/Sales of 1.90x is 29.3% lower than the industry average of 2.69x. Its forward Price/Sales of 2.42x is 12.6% lower than the industry average of 2.76x.
Its trailing-12-month EBITDA and net income margins of 53.27% and 31.29% are 360.2% and 871% higher than the industry averages of 11.58% and 3.22%, respectively.
For its 2022 fourth quarter, UMC’s operating revenues came in at NT$67.84 billion ($2.23 billion), up 14.8% year-over-year. Its operating income increased 34.2% year-over-year to NT$23.64 billion ($778.63 million). Also, its net income came in at NT$19.07 billion ($628.12 million), representing an increase of 19.6% year-over-year.
Analysts expect UMC’s revenue to increase 21.7% year-over-year to $9.55 billion in 2024, while its EPS is expected to increase 35.6% year-over-year to $0.99. The stock has gained 7.7% over the past month to close the last trading session at $7.42.
UMC’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, equating to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
Also, the stock has an A grade for Quality and a B for Value. It is ranked #6 out of 92 stocks in the B-rated Semiconductor & Wireless Chip industry. Click here for UMC’s additional POWR Ratings for Growth, Momentum, Stability, and Sentiment.
Yext, Inc. (YEXT)
YEXT organizes business facts to provide answers to consumer questions in North America and internationally. It serves the healthcare, retail, and financial services industries.
On January 12, 2023, YEXT announced its integration with Apple Business Connect. It is a new, free tool that will allow businesses all and sundry to claim their location place cards and design the way key information appears to more than a billion Apple users. The partnership is expected to boost YEXT’s portfolio significantly.
YEXT’s forward EV/Sales of 1.86x is 30.7% lower than the industry average of 2.69x, while its forward Price/Sales of 1.94x is 29.1% lower than the industry average of 2.74x.
YEXT’s trailing-12-month gross profit margin of 74.48% is 50.4% higher than the industry average of 49.53%. Its trailing-12-month levered FCF margin of 9.45% is 26.2% higher than the industry average of 7.49%.
YEXT’s revenue from its North America segment came in at $80.83 million for the quarter that ended October 31, 2022, up 2.2% year-over-year. In addition, its net loss decreased 50.6% year-over-year to $12.31 million.
Street expects YEXT’s revenue to increase 2.2% year-over-year to $399.27 million in 2023. Its EPS is expected to increase 73.3% year-over-year in the current year. It surpassed EPS estimates in all four trailing quarters. Over the past three months, the stock has gained 41.7% to close the last trading session at $6.36.
It’s no surprise that YEXT has an overall A rating, which equates to a Strong Buy in our proprietary rating system. In addition, it has a B grade for Growth, Value, Sentiment, and Quality.
Xperi Inc. (XPER)
XPER provides software and services in the United States. It offers Pay-TV solutions, managed IPTV services, video metadata and service, personalized content discovery, natural language voice, insights, and TiVo DVR subscriptions.
On January 5, 2023, XPER announced a partnership with LG Electronics to integrate DTS: X® immersive audio technology into LG’s latest OLED and Premium LCD TVs. Through this, viewers can now avail cinematic experience right at home, and the companies are expected to benefit.
In terms of forward EV/Sales, XPER’s 0.64x is 76.2% lower than the industry average of 2.69x, while its forward Price/Sales of 0.80x is 70.9% lower than the industry average of 2.74x.
XPER’s trailing-12-month gross profit margin of 74.91% is 51.3% higher than the industry average of 49.53%. Its trailing-12-month levered FCF margin of 8.52% is 13.7% higher than the industry average of 7.49%.
XPER’s revenue came in at $121.64 million for the third quarter that ended September 30, 2022, up 3.3% year-over-year. Its cash and cash equivalents came in at $180.12 million for the period ended September 30, 2022, compared to $120.69 million for the period ended December 31, 2021.
XPER’s revenue is expected to increase 6.3% year-over-year to $529.21 million in 2023. Its EPS is expected to increase 89.6% year-over-year in 2023. Over the past month, the stock has gained 6.1% to close the last trading session at $9.44.
XPER has an overall A grade, equating to a Strong Buy in our POWR Ratings system. It has a B grade for Growth, Sentiment, and Quality.
XPER is ranked #3 out of 92 stocks in the B-rated Semiconductor & Wireless Chip industry. To see Value, Momentum, and Stability ratings for XPER, click here.
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UMC shares were unchanged in premarket trading Friday. Year-to-date, UMC has gained 13.63%, versus a 1.62% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries. More...
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