MX · Magnachip Semiconductor
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $3.64
Note written ·
Price against the kill line
31.3% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $3.64, on record since 11 November 2026. The shares are down 30.9% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $3.64, the 200-day average of closes as of 12 November 2026, which would show the shares leading the S&P 500. A fourth-quarter gross margin above the 12% top of the guide would also show the shares leading.
Research onlyNot in the portfolio.
Key figures from the filings · Technology
Quarter to 30 September 2026, filed 5 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 44.0
- Revenue, change on a year (%)
- −4.3
- Gross margin (%)
- 14.0
- Operating margin (%)
- −29.3
- Free cash flow, four quarters ($M)
- −33.5
- Net cash, cash less debt ($M)
- 39.8
- Enterprise value to sales (×)
- 0.3
- Free-cash-flow yield (%)
- −35.3
All filed numbers
What Magnachip Semiconductor reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 44.0 | −4.3 | 14.0 | −29.3 |
| first filed | 44.7 | −6.1 | 19.3 | −22.3 |
| first filed | 46.2 | +3.3 | 15.6 | −15.5 |
| first filed | 40.6 | −20.7 | 9.3 | −30.7 |
| first filed | 45.9 | −17.1 | 18.6 | −25.1 |
| first filed restated | 47.6 | +2.6 | 20.4 | −13.9 |
| Pre-tax income ($M) | −8.4 |
| Net income ($M) four quarters: −30.1 | −12.5 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | +2.0 |
| Operating cash flow ($M) | −15.7 |
| Capital spending ($M) | 17.8 |
| Free cash flow ($M) | −33.5 |
| Cash and short-term investments ($M) | 86.9 |
| Debt ($M) long-term debt | 47.1 |
| Net cash, cash less debt ($M) | 39.8 |
| Deferred revenue ($M) | Not reported |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 24.9 |
| Inventory ($M) | 40.4 |
| Shareholders' equity ($M) | 245 |
| Market value ($M) | 95.1 |
| Enterprise value, market value plus net debt ($M) | 55.3 |
| Enterprise value to sales (×) | 0.3 |
| Enterprise value to operating income (×) | Not meaningful |
| Price to earnings (×) | Not meaningful |
| Price to book value (×) | 0.4 |
| Free-cash-flow yield (%) | −35.3 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 2.9% of shares outstanding sold short, 1.2 days of average trading to cover, −34.7% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $1.8M | $841K |
| 12 monthsfrom | $2.0M | $841K |
The thesis
Magnachip Semiconductor's shares are more likely to lag the S&P 500 over the next three months. The company guided fourth-quarter gross margin to 10%–12%, down from 14.0% in the third quarter, and the fourth-quarter report, expected around February 2027, shows whether that is the low point.
The third-quarter report of 4 November 2026 met the revenue guide and missed on margin. Revenue from continuing operations was $43.978 million, inside the $41.5–45.5 million guided range and 4.3% below a year earlier. Gross margin was 14.0% against guidance of 17%–19%, which the company attributed mainly to unfavorable foreign exchange movements (Form 8-K, Exhibit 99.1). The net loss from continuing operations was $13.3 million, or $(0.36) per share.
Insiders bought after the report. Director Cristiano Amoruso reported open-market purchases of 568,009 shares at an average of $2.41 on 6 November to 9 November 2026, and a sale of 378,252 shares at $2.22 on 6 November 2026. CEO Chae Lee bought 70,000 shares at an average of $2.22 on 6 November 2026 (SEC Form 4 filings, 10 November 2026).
The market has already marked the shares down hard: they closed at $2.82 on 12 November 2026, 71.4% below the 52-week intraday high of $9.86 on 3 June 2026, and below the $3.42 Navitas Semiconductor paid for its shares on 21 September 2026.
Bullish and bearish views on Magnachip Semiconductor Corp.
The bull case on Magnachip Semiconductor Corp. (MX), in brief: insiders bought at the lows. The bear case: margins are falling.
Bull case
- Insiders bought at the lows. Amoruso's purchases and CEO Lee's 70,000-share purchase were reported on Form 4 filings dated 10 November 2026, within days of the 5 November 2026 closing low of $2.05. Lee also bought 100,000 shares at an average of $3.18 on 23 September to 24 September 2026.
- Revenue held inside guidance. Third-quarter continuing-operations revenue of $43.978 million landed within the range given on 29 July 2026. Fourth-quarter revenue is guided to $41.0–45.0 million, a similar range.
- Management frames the fourth quarter as the margin low. The 10%–12% guide reflects a power shutdown for a substation upgrade and a stronger Korean won (Form 8-K, 4 November 2026). Earnings Whispers reported on 4 November 2026 that management called the quarter the trough and is considering selective price increases. Price increases are not in the 8-K.
- Cash covers the losses for now. Magnachip held $86.9 million of cash at 30 September 2026 (Form 8-K). On 21 September 2026 Navitas bought 1,461,988 shares at $3.42 ($5 million) and Magnachip licensed GeneSiC silicon-carbide technology (Business Wire).
Bear case
- Margins are falling. Gross margin was 14.0% in the third quarter after 19.3% in the second, and the fourth quarter is guided to 10%–12%. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) from continuing operations was $(3.5) million in the third quarter.
- Results missed analyst estimates. Benzinga reported on 4 November 2026 that adjusted loss per share of $(0.29) missed the $(0.20) estimate, and sales of $43.978 million missed the $47.5 million estimate.
- Revenue is shrinking. Third-quarter continuing-operations revenue was down 4.3% from a year earlier, and the fourth-quarter guide of $41.0–45.0 million brackets that level.
- Partner shares can reach the market. A Form S-3 resale registration filed 5 October 2026 covers the 1.46 million shares Navitas bought at $3.42. The shares closed at $2.82 on 12 November 2026, below that price.
- A director also sold. Amoruso's Form 4 filed 10 November 2026 shows a sale of 378,252 shares at $2.22 on 6 November 2026, alongside his purchases.
Price setup
The shares closed at $2.82 on 12 November 2026, after $2.96 on 11 November 2026, $2.53 on 10 November 2026, $2.50 on 9 November 2026, $2.36 on 6 November 2026 and a 52-week closing low of $2.05 on 5 November 2026. The 52-week intraday high is $9.86, set on 3 June 2026.
The 3-month change is −26.0% (from a $3.81 close on 14 August 2026). The shares sit just under the 50-day average of closes at $2.90 and well below the 200-day average of closes. A close above the 200-day average is the level that would show the shares leading.
The rebound from the 5 November 2026 low came on insider buying and a short-covering-style bounce in a thinly covered stock. The 1.46 million resale-registered Navitas shares are the one identifiable block of potential selling. The company's market value was about $116 million when the shares traded near $3.82 on 25 September 2026 (Benzinga), so a small share count makes each block meaningful.
Catalysts ahead
- ~February 2027 (est.): Fourth-quarter 2026 results and first-quarter 2027 guidance (date not yet announced). Tests the 10%–12% gross-margin guide and the $41.0–45.0 million revenue range, and whether price increases and the Navitas silicon-carbide license show up in the numbers.
What would change the view
A daily close above $3.64, the 200-day average of closes as of 12 November 2026, which would show the shares leading the S&P 500. A fourth-quarter gross margin above the 12% top of the guide would also show the shares leading.
What it trades with
Magnachip sells power and display semiconductors into consumer electronics, so demand tracks television, notebook and PC volumes more than artificial-intelligence spending. Navitas Semiconductor is the direct comparison for silicon-carbide power chips. The Korean won matters for costs: management blamed won strength for the third-quarter margin miss and for the fourth-quarter guide. Peer price increases in power chips, cited by management on the call, are a read-across for Magnachip's pricing.
The evidence, claim by claim (8)
- Third-quarter 2026 continuing-operations revenue was $43.978 million, inside the $41.5–45.5 million guided range and down 4.3% from a year earlier. Third-quarter 2026 Form 8-K, Exhibit 99.1 · as of
- Third-quarter gross margin was 14.0%, below the 17%–19% guidance, which the company attributed mainly to unfavorable foreign exchange movements. Third-quarter 2026 Form 8-K, Exhibit 99.1 · as of
- Net loss from continuing operations was $13.3 million, or $(0.36) per share; adjusted EBITDA from continuing operations was $(3.5) million. Third-quarter 2026 Form 8-K, Exhibit 99.1 · as of
- Fourth-quarter 2026 guidance is revenue of $41.0–45.0 million and gross margin of 10%–12%, citing a power shutdown for a substation upgrade and a stronger Korean won. Third-quarter 2026 Form 8-K, Exhibit 99.1 · as of
- Cash was $86.9 million at the end of the third quarter. Third-quarter 2026 Form 8-K, Exhibit 99.1 · as of
- Director Cristiano Amoruso bought 568,009 shares at an average of $2.41 on 6 November to 9 November 2026 and sold 378,252 shares at $2.22 on 6 November 2026. SEC Form 4 filed 10 November 2026 · as of
- Chief Executive Officer Chae Lee bought 70,000 shares at an average of $2.22 on 6 November 2026. SEC Form 4 filed 10 November 2026 · as of
- Adjusted loss per share of $(0.29) missed the $(0.20) estimate, and sales of $43.978 million missed the $47.5 million estimate. Benzinga earnings summary · as of
Sources
Related · shared themes
STM
STMicroelectronics
STMicroelectronics beat its third-quarter revenue and gross-margin guidance on 29 October 2026 and guided the fourth quarter higher, but…
VSH
Vishay Intertechnology
Vishay Intertechnology's order-led recovery, shown in record revenue and a 25.5% gross margin reported 4 November 2026, makes the shares…
NXPI
NXP Semiconductors
NXP Semiconductors' automotive and industrial recovery is confirmed (Q3 revenue $3.786B), but in-line Q4 guidance, analyst targets of $245…
SWKS
Skyworks Solutions
Skyworks Solutions' shares are more likely to lag the S&P 500 over three months: the first combined outlook with Qorvo missed estimates and…