Why Navitas Semiconductor’s 26% Rally Is Raising Valuation Concerns

Summary

• Navitas Semiconductor has surged 26% in a month, but valuation metrics suggest the rally may be running ahead of fundamentals.

• The company trades at a very high price-to-sales ratio despite recent revenue declines and slower growth forecasts than peers.

• Investors are betting on a turnaround, but analyst expectations indicate limited margin for disappointment at current levels.

Navitas Semiconductor Corporation has caught investor attention after a 26% share price jump in the last month. Despite the rally, the stock is still recovering from earlier losses, even as it posts a 185% gain over the past year.

The sharp price move has pushed Navitas Semiconductor to a price-to-sales ratio of around 40.9x. That figure sits far above most US semiconductor peers, where ratios below 5x are far more common.

Such a premium usually signals strong confidence in future growth, but recent performance complicates the picture. Navitas Semiconductor has seen revenues decline over the last year while much of the sector continued to grow.

Looking further back, the story is less negative but still uneven. Revenue is up roughly 72% over three years, yet the most recent 12-month drop of around 38% highlights how volatile growth has been.

Forward-looking estimates suggest revenue growth of about 26% per year over the next three years. That places Navitas Semiconductor slightly behind the broader semiconductor industry, which is expected to grow closer to 29% annually.

This gap matters when valuation is already stretched. A higher price-to-sales ratio becomes harder to justify if growth is only matching, or trailing, the wider market.

Much of the current optimism appears to rest on a turnaround narrative. Investors seem willing to pay up now in anticipation that demand for gallium nitride and silicon carbide solutions will reaccelerate.

The risk is that expectations remain higher than what analysts are forecasting. If revenue growth fails to meaningfully outperform peers, Navitas Semiconductor’s valuation could come under pressure.

The recent rally reflects confidence, but not certainty. At current levels, Navitas Semiconductor looks like a stock where execution will matter far more than momentum.