As of May 23, 2025, NeoPhotonics Corp has a Discounted Cash Flow (DCF) derived fair value of $10.19 per share. With the current market price at $16.01, this represents a potential upside of -36.3%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $0.00 |
| DCF Fair Value (10-year) | $10.19 |
| Potential Upside (5-year) | -139.2% |
| Potential Upside (10-year) | -36.3% |
| Discount Rate (WACC) | 6.1% - 8.6% |
Revenue is projected to grow from $290 million in 12-2021 to $913 million by 12-2031, representing a compound annual growth rate of approximately 12.2%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2021 | 290 | 22% |
| 12-2022 | 385 | 32% |
| 12-2023 | 465 | 21% |
| 12-2024 | 522 | 12% |
| 12-2025 | 583 | 12% |
| 12-2026 | 631 | 8% |
| 12-2027 | 694 | 10% |
| 12-2028 | 743 | 7% |
| 12-2029 | 797 | 7% |
| 12-2030 | 853 | 7% |
| 12-2031 | 913 | 7% |
Net profit margin is expected to improve from -14% in 12-2021 to 6% by 12-2031, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2021 | (41) | -14% |
| 12-2022 | (33) | -9% |
| 12-2023 | (25) | -5% |
| 12-2024 | (12) | -2% |
| 12-2025 | 4 | 1% |
| 12-2026 | 22 | 3% |
| 12-2027 | 28 | 4% |
| 12-2028 | 34 | 5% |
| 12-2029 | 40 | 5% |
| 12-2030 | 48 | 6% |
| 12-2031 | 56 | 6% |
with a 5-year average of $19 million. Projected CapEx is expected to maintain at approximately 6% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2022 | 15 |
| 12-2023 | 18 |
| 12-2024 | 22 |
| 12-2025 | 27 |
| 12-2026 | 32 |
| 12-2027 | 36 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 61 |
| Days Inventory | 72 |
| Days Payables | 78 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 9M/2022 | (15) | (3) | 18 | 7 | (38) |
| 2023 | (8) | (3) | 29 | 12 | (46) |
| 2024 | 11 | (1) | 33 | 13 | (33) |
| 2025 | 34 | 0 | 36 | 8 | (11) |
| 2026 | 60 | 3 | 39 | 8 | 10 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 0.00 | -139.2% |
| 10-Year DCF (Growth) | 10.19 | -36.3% |
| 5-Year DCF (EBITDA) | 2.86 | -82.2% |
| 10-Year DCF (EBITDA) | 9.24 | -42.3% |
Is NeoPhotonics Corp (NPTN) a buy or a sell? NeoPhotonics Corp is definitely a sell. Based on our DCF analysis, NeoPhotonics Corp (NPTN) appears to be overvalued with upside potential of -36.3%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider reducing exposure at the current market price of $16.01.