Faraday Technology (TWSE:3035) - Share price, News & Analysis

Q: What is the Fair Price of 3035 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

3035 (NT$175.5) is trading above our estimate of [[fair value]] (NT$118.01)

3035 fundamental analysis
Snowflake Score
Valuation	1/6
Future Growth	4/6
Past Performance	6/6
Financial Health	6/6
Dividends	3/6

3035 Stock Overview

Rewards

Earnings are forecast to grow 9.25% per year

Earnings grew by 390% over the past year

Risk Analysis

Highly volatile share price over the past 3 months

Faraday Technology Competitors

Jentech Precision Industrial

TWSE:3653

NT$50.0b

Greatek Electronics

TWSE:2441

NT$36.3b

AP Memory Technology

TWSE:6531

NT$33.9b

Xintec

TPEX:3374

NT$33.8b

Price History & Performance

Summary of all time highs, changes and price drops for Faraday Technology
Historical stock prices
Current Share Price	NT$175.50
52 Week High	NT$331.50
52 Week Low	NT$84.80
Beta	1.33
1 Month Change	15.08%
3 Month Change	-34.52%
1 Year Change	102.42%
3 Year Change	202.07%
5 Year Change	298.86%
Change since IPO	38.39%

Shareholder Returns

	3035	TW Semiconductor	TW Market
7D	13.6%	2.7%	2.7%
1Y	102.4%	-15.2%	-8.2%

Return vs Industry: 3035 exceeded the TW Semiconductor industry which returned -15.2% over the past year.

Return vs Market: 3035 exceeded the TW Market which returned -8.2% over the past year.

Price Volatility

Is 3035's price volatile compared to industry and market?
3035 volatility
3035 Average Weekly Movement	9.7%
Semiconductor Industry Average Movement	6.5%
Market Average Movement	5.0%
10% most volatile stocks in TW Market	8.4%
10% least volatile stocks in TW Market	2.5%

Stable Share Price: 3035 is more volatile than 90% of TW stocks over the past 3 months, typically moving +/- 10% a week.

Volatility Over Time: 3035's weekly volatility (10%) has been stable over the past year, but is still higher than 75% of TW stocks.

About the Company

Founded	Employees	CEO	Website
1993	n/a	Steve Wang	https://www.faraday-tech.com

Faraday Technology Corporation, together with its subsidiaries, operates as a fabless ASIC/SoC and silicon intellectual property (IP) provider China, Taiwan, Japan, the United States, and internationally. The company offers SoC design services and evaluation platforms; and ASIC services. It also provides IP products, including library and memory compilers, processor cores, analog IPs, peripheral IPs, and interface IPs.

Faraday Technology Fundamentals Summary

How do Faraday Technology's earnings and revenue compare to its market cap?
3035 fundamental statistics
Market Cap	NT$44.24b
Earnings (TTM)	NT$2.14b
Revenue (TTM)	NT$11.43b

20.4x

P/E Ratio

3.8x

P/S Ratio

Is 3035 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
3035 income statement (TTM)
Revenue	NT$11.43b
Cost of Revenue	NT$5.68b
Gross Profit	NT$5.76b
Other Expenses	NT$3.62b
Earnings	NT$2.14b

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	8.60
Gross Margin	50.34%
Net Profit Margin	18.69%
Debt/Equity Ratio	0%

How did 3035 perform over the long term?

See historical performance and comparison

Dividends

1.9%

Current Dividend Yield

38%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is 3035 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

1/6

Valuation Score 1/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 3035?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 3035. This is calculated by dividing 3035's market cap by their current preferred multiple.
What is 3035's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	NT$44.24b

3035 key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	3.4x
Enterprise Value/EBITDA	14.7x
PEG Ratio	2.2x

Price to Earnings Ratio vs Peers

How does 3035's PE Ratio compare to its peers?

3035 PE Ratio vs Peers

The above table shows the PE ratio for 3035 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	17.4x
3653 Jentech Precision Industrial	26.9x	n/a	NT$50.0b
2441 Greatek Electronics	7.6x	n/a	NT$36.3b
6531 AP Memory Technology	13.8x	1.8%	NT$33.9b
3374 Xintec	20.6x	4.0%	NT$33.8b
3035 Faraday Technology	20.4x	9.2%	NT$44.2b

Price-To-Earnings vs Peers: 3035 is expensive based on its Price-To-Earnings Ratio (20.4x) compared to the peer average (17.4x).

Price to Earnings Ratio vs Industry

How does 3035's PE Ratio compare vs other companies in the TW Semiconductor Industry?

Price-To-Earnings vs Industry: 3035 is expensive based on its Price-To-Earnings Ratio (20.4x) compared to the TW Semiconductor industry average (12.6x)

Price to Earnings Ratio vs Fair Ratio

What is 3035's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

3035 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	20.4x
Fair PE Ratio	18.6x

Price-To-Earnings vs Fair Ratio: 3035 is expensive based on its Price-To-Earnings Ratio (20.4x) compared to the estimated Fair Price-To-Earnings Ratio (18.6x).

Share Price vs Fair Value

What is the Fair Price of 3035 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 3035 (NT$175.5) is trading above our estimate of fair value (NT$118.01)

Significantly Below Fair Value: 3035 is trading above our estimate of fair value.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.

Discover undervalued companies

Future Growth

How is Faraday Technology forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

Future Growth Score

4/6

Future Growth Score 4/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

9.2%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 3035's forecast earnings growth (9.2% per year) is above the savings rate (0.7%).

Earnings vs Market: 3035's earnings (9.2% per year) are forecast to grow faster than the TW market (6% per year).

High Growth Earnings: 3035's earnings are forecast to grow, but not significantly.

Revenue vs Market: 3035's revenue (11.1% per year) is forecast to grow faster than the TW market (7.2% per year).

High Growth Revenue: 3035's revenue (11.1% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: 3035's Return on Equity is forecast to be high in 3 years time (26%)

Discover growth companies

Past Performance

How has Faraday Technology performed over the past 5 years?

Past Performance Score

6/6

Past Performance Score 6/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

42.9%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 3035 has high quality earnings.

Growing Profit Margin: 3035's current net profit margins (18.7%) are higher than last year (7.1%).

Past Earnings Growth Analysis

Earnings Trend: 3035's earnings have grown significantly by 42.9% per year over the past 5 years.

Accelerating Growth: 3035's earnings growth over the past year (390%) exceeds its 5-year average (42.9% per year).

Earnings vs Industry: 3035 earnings growth over the past year (390%) exceeded the Semiconductor industry 53.8%.

Return on Equity

High ROE: 3035's Return on Equity (29.9%) is considered high.

Discover strong past performing companies

Financial Health

How is Faraday Technology's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: 3035's short term assets (NT$10.0B) exceed its short term liabilities (NT$5.3B).

Long Term Liabilities: 3035's short term assets (NT$10.0B) exceed its long term liabilities (NT$373.1M).

Debt to Equity History and Analysis

Debt Level: 3035 is debt free.

Reducing Debt: 3035 has not had any debt for past 5 years.

Debt Coverage: 3035 has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: 3035 has no debt, therefore coverage of interest payments is not a concern.

Balance Sheet

Discover healthy companies

Dividend

What is Faraday Technology current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

1.88%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: 3035's dividend (1.88%) isn’t notable compared to the bottom 25% of dividend payers in the TW market (2.46%).

High Dividend: 3035's dividend (1.88%) is low compared to the top 25% of dividend payers in the TW market (6.46%).

Stability and Growth of Payments

Stable Dividend: 3035's dividend payments have been volatile in the past 10 years.

Growing Dividend: 3035's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (38.4%), 3035's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (39.3%), 3035's dividend payments are well covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

7.1yrs

Average management tenure

CEO

Steve Wang

7.08yrs

Tenure

Mr. Kuo-Yung Wang also known as Steve serves as the President of Faraday Technology Corporation since July 28, 2015 and has been its Director since November 21, 2011. Mr. Wang holds a Master of Industrial...

Leadership Team

Experienced Management: 3035's management team is seasoned and experienced (7.1 years average tenure).

Board Members

Experienced Board: 3035's board of directors are considered experienced (6.2 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/16 00:00
End of Day Share Price	2022/08/16 00:00
Earnings	2022/06/30
Annual Earnings	2021/12/31