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1. Company Snapshot

1.a. Company Description

Melexis NV designs, develops, tests, and markets advanced integrated semiconductor devices primarily for the automotive industry in Europe, the Middle-East, Africa, the Asia Pacific, and North and Latin America.The company provides magnetic position, latch and switch, current, inductive position, tire monitoring, temperature, optical, pressure, and speed sensor ICs. It also offers embedded motor driver, fan and pump, LED, and pre driver ICs; and LIN/CAN system basis, NFC/RFID, radio-frequency receiver and transmitter, and switch controller ICs. The company was founded in 1988 and is headquartered in Ieper, Belgium.Melexis NV is a subsidiary of Xtrion N.V.

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1.b. Last Insights on MELE

Melexis NV's recent performance was driven by a strong Q4 2025 earnings report, showcasing resilience amidst challenges. The company's promising outlook for 2026 further buoyed investor sentiment. Additionally, a share buy-back program, which saw the purchase of 33,000 shares on Euronext Brussels, signaled confidence in the company's future. A new share buy-back program, announced on December 10, 2025, for up to 850,000 shares and EUR 50 million, aims to enhance shareholder value. These strategic initiatives underscore Melexis' commitment to navigating challenges and delivering growth.

1.c. Company Highlights

2. Melexis' 2025 Earnings: A Year of Recovery and Growth

Melexis reported sales of EUR 839.6 million for the full year 2025, a decrease of 10% compared to the previous year. The gross result was EUR 324 million or 38.6% of sales, a decrease of 19% compared to the last year. The operating result was EUR 134 million or 16% of sales, a decrease of 39% compared to EUR 219.9 million in '24. The net result was EUR 112.5 million or EUR 2.78 per share, a decrease of 34% compared to EUR 171.4 million or EUR 4.24 per share in 2024. The actual EPS was not disclosed, but it was compared to estimates of 0.76. In the fourth quarter of 2025, sales returned to year-on-year growth of 9%, reaching EUR 214.5 million.

Publication Date: Feb -09

📋 Highlights
  • Full-Year 2025 Sales Decline: Sales dropped 10% to EUR 839.6 million, with a 39% drop in operating profit to EUR 134 million.
  • Q4 2025 Recovery: Fourth-quarter sales rose 9% YoY to EUR 214.5 million, driven by double-digit growth in APAC (China hit record sales).
  • 2026 Sales Outlook: Flat sales in H1 2026 vs. 2025, with H2 expected to grow, mirroring 2025’s recovery phase. Gross margin targets ~40% in H1.
  • China Market Volatility: China’s sales alternated between strong and weak quarters in 2025, with EUR 10M quarterly fluctuations expected in 2026.
  • Inventory Strategy: Maintained EUR 300M inventory as a strategic asset to meet in-quarter orders, avoiding further buildup despite APAC volatility.

Regional Performance

The company's largest region, APAC, increased as a percentage of group sales, with China posting its highest ever sales in Q4 2025. Total APAC sales were up double-digit year-on-year. However, the company faces volatility in its non-automotive business and the impact of the annual pricing agreement. As Marc Biron mentioned, "China has an alternating pattern of strong sales followed by lower sales."

Guidance and Outlook

Melexis expects sales to be around the same levels in the first half of 2026 compared to the previous year. Sales in the second half of 2026 are expected to grow compared to the first half of 2025. The company expects a gross profit margin around 40% and an operating margin around 17% in the first half of 2026. Analysts estimate next year's revenue growth at 9.3%. The company's guidance is in line with the expected recovery in the automotive demand cycle.

Valuation Metrics

The company's current valuation metrics are as follows: P/E Ratio of 19.22, P/B Ratio of 4.46, P/S Ratio of 2.58, EV/EBITDA of 12.24, Dividend Yield of 6.17%, Free Cash Flow Yield of 4.46%, ROIC of 13.65%, and ROE of 21.39%. These metrics indicate that the company is trading at a premium, with a high P/E Ratio and P/B Ratio. However, the Dividend Yield is attractive, and the company's ROIC and ROE are healthy.

Key Drivers

The company's key drivers include the recovery in the automotive demand cycle, the success of its new product launches, and its strategic inventory levels. Melexis launched 19 new products targeting structural growth trends in automotive and robotics, leveraging its technology leadership with strong design wins and an expanded pipeline of opportunities across China, Europe, and South Korea.

3. NewsRoom

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Melexis NV (MLXSF) Q4 2025 Earnings Call Highlights: Navigating Challenges with Strategic ...

Feb -04

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Melexis: update on the share buy-back program

Dec -15

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Melexis: Launch of a new share buy-back program

Dec -10

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European Dividend Stocks To Enhance Your Portfolio

Dec -01

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Melexis hosts its Capital Markets Day today

Nov -05

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Melexis and Google Cloud Announce Expanded Strategic Partnership to Accelerate Enterprise-Wide AI Transformation

Oct -09

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European Stocks That May Be Trading Below Estimated Value September 2025

Sep -22

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Does Heineken’s Slump Signal Opportunity After Record Low US Alcohol Consumption?

Sep -09

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.00%)

6. Segments

Semiconductor Devices

Expected Growth: 2.0%

Melexis NV's 2.0% growth in Semiconductor Devices is driven by increasing demand for advanced driver-assistance systems (ADAS) and autonomous vehicles, as well as growing adoption of IoT devices and smart sensors. Additionally, the company's focus on innovative sensor technologies and strategic partnerships contribute to its growth momentum.

7. Detailed Products

Temperature Sensors

Melexis NV offers a wide range of temperature sensors, including thermistors, thermocouples, and resistance temperature detectors (RTDs). These sensors are designed to provide accurate temperature measurements in various applications.

Magnetic Sensors

Melexis NV's magnetic sensors are designed to detect changes in magnetic fields, providing accurate and reliable measurements in various applications.

Pressure Sensors

Melexis NV's pressure sensors are designed to measure pressure in various applications, including industrial, automotive, and medical devices.

Inertial Sensors

Melexis NV's inertial sensors are designed to measure acceleration, roll, pitch, and yaw in various applications.

Position Sensors

Melexis NV's position sensors are designed to detect the position and movement of objects in various applications.

Time-of-Flight (ToF) Sensors

Melexis NV's ToF sensors are designed to measure distance and movement in various applications.

8. Melexis NV's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Melexis NV is moderate due to the presence of alternative technologies and products in the market.

Bargaining Power Of Customers

The bargaining power of customers is low due to the specialized nature of Melexis NV's products and the lack of substitutes.

Bargaining Power Of Suppliers

The bargaining power of suppliers is moderate due to the presence of multiple suppliers in the market, but Melexis NV's dependence on a few key suppliers.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the semiconductor industry, including the need for significant capital investment and technological expertise.

Intensity Of Rivalry

The intensity of rivalry is high due to the competitive nature of the semiconductor industry, with many established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 25.25%
Debt Cost 3.95%
Equity Weight 74.75%
Equity Cost 10.49%
WACC 8.84%
Leverage 33.79%

11. Quality Control: Melexis NV passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Melexis

A-Score: 5.1/10

Value: 2.9

Growth: 6.7

Quality: 6.5

Yield: 7.5

Momentum: 3.5

Volatility: 3.7

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AIXTRON

A-Score: 4.6/10

Value: 3.3

Growth: 7.0

Quality: 6.3

Yield: 1.9

Momentum: 8.0

Volatility: 1.0

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Nova

A-Score: 4.3/10

Value: 0.5

Growth: 8.9

Quality: 7.6

Yield: 0.0

Momentum: 8.0

Volatility: 1.0

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BESI

A-Score: 4.2/10

Value: 0.0

Growth: 4.8

Quality: 7.3

Yield: 5.0

Momentum: 6.5

Volatility: 1.7

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Tower Semi

A-Score: 4.1/10

Value: 2.4

Growth: 5.1

Quality: 5.5

Yield: 0.0

Momentum: 10.0

Volatility: 1.3

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Camtek

A-Score: 3.8/10

Value: 0.7

Growth: 8.8

Quality: 5.0

Yield: 0.0

Momentum: 7.5

Volatility: 0.7

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

54.3$

Current Price

54.3$

Potential

-0.00%

Expected Cash-Flows