NYSE:NPTN

Stock Analysis Report

Executive Summary

NeoPhotonics Corporation develops, manufactures, and sells optoelectronic products that transmit, receive, and switch high speed digital optical signals for communications networks.

Rewards

Trading at 84.4% below its fair value

Revenue is forecast to grow 10.72% per year

Risk Analysis

Currently unprofitable and not forecast to become profitable over the next 3 years

Highly volatile share price over past 3 months

Shareholders have been diluted in the past year



Snowflake Analysis

Excellent balance sheet and fair value.


Similar Companies

Share Price & News

How has NeoPhotonics's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: NPTN's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-5.2%

NPTN

-1.7%

US Semiconductor

-2.7%

US Market


1 Year Return

17.0%

NPTN

44.0%

US Semiconductor

21.2%

US Market

Return vs Industry: NPTN underperformed the US Semiconductor industry which returned 48.5% over the past year.

Return vs Market: NPTN underperformed the US Market which returned 22.3% over the past year.


Shareholder returns

NPTNIndustryMarket
7 Day-5.2%-1.7%-2.7%
30 Day-6.7%1.1%0.09%
90 Day33.3%12.0%6.9%
1 Year17.0%17.0%46.8%44.0%23.8%21.2%
3 Year-25.8%-25.8%87.8%77.6%48.1%38.6%
5 Year160.6%160.6%159.8%134.8%72.5%53.4%

Price Volatility Vs. Market

How volatile is NeoPhotonics's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is NeoPhotonics undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: NPTN ($8.81) is trading below our estimate of fair value ($56.55)

Significantly Below Fair Value: NPTN is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: NPTN is unprofitable, so we can't compare its PE Ratio to the Semiconductor industry average.

PE vs Market: NPTN is unprofitable, so we can't compare its PE Ratio to the US market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate NPTN's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: NPTN is good value based on its PB Ratio (2.8x) compared to the US Semiconductor industry average (3.3x).


Next Steps

Future Growth

How is NeoPhotonics forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

134.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NPTN is forecast to remain unprofitable over the next 3 years.

Earnings vs Market: NPTN is forecast to remain unprofitable over the next 3 years.

High Growth Earnings: NPTN is forecast to remain unprofitable over the next 3 years.

Revenue vs Market: NPTN's revenue (10.7% per year) is forecast to grow faster than the US market (7.5% per year).

High Growth Revenue: NPTN's revenue (10.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if NPTN's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has NeoPhotonics performed over the past 5 years?

-40.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NPTN is currently unprofitable.

Growing Profit Margin: NPTN is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: NPTN is unprofitable, and losses have increased over the past 5 years at a rate of -40% per year.

Accelerating Growth: Unable to compare NPTN's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: NPTN is unprofitable, making it difficult to compare its past year earnings growth to the Semiconductor industry (-15.8%).


Return on Equity

High ROE: NPTN has a negative Return on Equity (-17.25%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is NeoPhotonics's financial position?


Financial Position Analysis

Short Term Liabilities: NPTN's short term assets ($217.7M) exceed its short term liabilities ($103.8M).

Long Term Liabilities: NPTN's short term assets ($217.7M) exceed its long term liabilities ($71.6M).


Debt to Equity History and Analysis

Debt Level: NPTN's debt to equity ratio (31.9%) is considered satisfactory.

Reducing Debt: NPTN's debt to equity ratio has increased from 29.1% to 31.9% over the past 5 years.


Balance Sheet

Inventory Level: NPTN has a high level of physical assets or inventory.

Debt Coverage by Assets: NPTN's debt is covered by short term assets (assets are 4.6x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable NPTN has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: NPTN is unprofitable but has sufficient cash runway for more than 3 years, due to free cash flow being positive and growing by 57.5% per year.


Next Steps

Dividend

What is NeoPhotonics's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage2.0%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate NPTN's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate NPTN's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if NPTN's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if NPTN's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of NPTN's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of NeoPhotonics's salary, the management and board of directors tenure and is there insider trading?

7.3yrs

Average management tenure


CEO

Tim Jenks (64yo)

21.8yrs

Tenure

US$2,033,419

Compensation

Mr. Timothy Storrs Jenks, also known as Tim, has been the President and Chief Executive Officer of Neophotonics Corp. since April 1998 and serves as the Chairman and has been its Director since April 1998. ...


CEO Compensation Analysis

Compensation vs Market: Tim's total compensation ($USD2.03M) is about average for companies of similar size in the US market ($USD1.70M).

Compensation vs Earnings: Tim's compensation has increased whilst the company is unprofitable.


Management Age and Tenure

7.3yrs

Average Tenure

53.5yo

Average Age

Experienced Management: NPTN's management team is seasoned and experienced (7.3 years average tenure).


Board Age and Tenure

8.1yrs

Average Tenure

59yo

Average Age

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


Insider Trading

Insider Buying: NPTN insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$209,56015 Nov 19
Timothy Jenks
EntityIndividual
Role
Chief Executive Officer
Chairman
Shares24,732
Max PriceUS$8.50
SellUS$34,68715 Nov 19
Wupen Yuen
EntityIndividual
Role
Senior Key Executive
Senior VP
Shares4,063
Max PriceUS$8.54
SellUS$2,140,94031 May 19
RUSNANO Management Company LLC
EntityCompany
Shares375,500
Max PriceUS$5.73
BuyUS$178,50030 May 19
Elizabeth Eby
EntityIndividual
Role
Chief Financial Officer
Senior VP of Finance & CFO
Shares50,000
Max PriceUS$3.57
SellUS$112,58919 Mar 19
Timothy Jenks
EntityIndividual
Role
Chief Executive Officer
Chairman
Shares16,999
Max PriceUS$6.62

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 4.8%.


Management Team

  • Tim Jenks (64yo)

    Chairman

    • Tenure: 21.8yrs
    • Compensation: US$2.03m
  • G. Lipscomb (67yo)

    Vice President of Marketing

    • Tenure: 17.2yrs
  • Raymond Cheung (51yo)

    COO & Senior VP

    • Tenure: 11.2yrs
    • Compensation: US$1.06m
  • Wupen Yuen (49yo)

    Senior VP

    • Tenure: 7.3yrs
    • Compensation: US$1.03m
  • Yang-Chiah Yee (52yo)

    Senior Vice President of Global Sales

    • Tenure: 1.8yrs
    • Compensation: US$1.61m
  • Mona Taylor

    Senior Vice President of Human Resources

    • Tenure: 1.3yrs
  • Beth Eby (55yo)

    Senior VP of Finance & CFO

    • Tenure: 2.4yrs
    • Compensation: US$1.06m
  • Judi Otteson

    VP & General Counsel


    Board Members

    • Bandel Carano (57yo)

      Independent Director

      • Tenure: 15.8yrs
      • Compensation: US$104.45k
    • Jay Abbe (78yo)

      Lead Independent Director

      • Tenure: 6.6yrs
      • Compensation: US$166.15k
    • Mike Sophie (61yo)

      Independent Director

      • Tenure: 13.2yrs
      • Compensation: US$165.58k
    • Tim Jenks (64yo)

      Chairman

      • Tenure: 21.8yrs
      • Compensation: US$2.03m
    • Rajiv Ramaswami (53yo)

      Director & Member of Technical Advisory Board

      • Tenure: 9.7yrs
      • Compensation: US$154.08k
    • Ihab Tarazi (52yo)

      Director & Member of Technical Advisory Board

      • Tenure: 4.3yrs
      • Compensation: US$156.95k
    • Yanbing Li

      Director

      • Tenure: 0.5yrs

    Company Information

    NeoPhotonics Corporation's company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: NeoPhotonics Corporation
    • Ticker: NPTN
    • Exchange: NYSE
    • Founded: 1996
    • Industry: Semiconductors
    • Sector: Semiconductors
    • Market Cap: US$392.200m
    • Shares outstanding: 48.24m
    • Website: https://www.neophotonics.com

    Number of Employees


    Location

    • NeoPhotonics Corporation
    • 2911 Zanker Road
    • San Jose
    • California
    • 95134
    • United States

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    NPTNNYSE (New York Stock Exchange)YesCommon SharesUSUSDFeb 2011
    4NODB (Deutsche Boerse AG)YesCommon SharesDEEURFeb 2011

    Biography

    NeoPhotonics Corporation develops, manufactures, and sells optoelectronic products that transmit, receive, and switch high speed digital optical signals for communications networks. It offers high speed products, including transmitter, receiver, and switching products for 100G (gigabits per second) and optical transmission applications over distances of 2 to 2,000 kilometers; optical components for coherent systems, including narrow linewidth tunable transmit and local oscillator lasers (NLW-ITLA) that generate ultra-pure wavelength or color for coherent transmission, as well as coherent micro-modulators, which encode the information on the intensity and phase of the optical beam; and integrated coherent receivers (ICRs) that decode the phase and polarization encoded coherent signals. The company also engages in developing pluggable coherent modules that combine NLW-ITLA with ICR and a coherent modulator; and offers 100G products for the client side and datacenter applications. In addition, it offers network products and solutions, including application-specific passive optical functionalities in modules or sub-system configurations; transceiver modules for various low speed access and mobile backhaul applications; and products for test and measurement, instrumentation, industrial, and research applications. The company sells its products to network equipment manufacturers through a direct sales force in North America, Europe, and Asia. The company was formerly known as NanoGram Corporation and changed its name to NeoPhotonics Corporation in 2002. NeoPhotonics Corporation was founded in 1996 and is headquartered in San Jose, California. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/28 00:47
    End of Day Share Price2020/01/27 00:00
    Earnings2019/09/30
    Annual Earnings2018/12/31


    Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.