What happened
Shares of Navitas Semiconductor Corporation (NVTS +3.04%), a smallish company that makes gallium nitride chips used in powering electronic devices, collapsed Wednesday morning after the company reported Q4 2021 sales that missed analyst forecasts by the narrowest of margins -- and also warned of further misses in the year to come. As of 11:05 a.m. ET, Navitas shares are down 18.8%.
Heading into Q4, analysts had forecast Navitas would lose $0.08 per share on sales of $7.4 million. Navitas actually beat expectations on earnings, losing only $0.07 per share for the quarter. It missed expectations on sales, however, which came in at only $7.3 million.
Image source: Getty Images.
So what
And yet, it's hard to call this revenue performance bad, given that Navitas actually grew its revenues nearly 60% year over year in Q4. Even better, for the full year, Navitas' sales were up precisely 100% at $23.7 million, and gross profit margins on those sales are exploding higher, up 1,360 basis points to 45%.
For that matter, the news about this coming year wasn't bad, either. To the contrary, in 2022 Navitas expects to double its sales once again, forecasting fiscal 2022 revenue of $48 million. And margins are expected to hold pretty steady at 44%, plus or minus 1%.
Now what
So what's not to like about any of that? Well, a couple of quibbles. First and foremost, as TheFly.com points out, analysts were hoping that Navitas would promise to generate sales of $49 million this year, not $48 million, so investors may be looking at guidance as a disappointment.
And of course, there's the nagging detail that no matter how fast revenues are growing or margins expanding, Navitas remains unprofitable. The company not only lost $0.07 per share in Q4, pro forma, but its losses when calculated according to generally accepted accounting principles (GAAP) were a much steeper $0.37 per share, and Navitas' total losses for the year came to $3.90 per share -- three times worse than in 2020.
Long story short, revenue growth is great -- but investors may be wondering when, if ever, they're going to see some actual profits at Navitas Semiconductor.
