Xperi Stock Rises 25% in 6 Months: What Should Investors Do?

Core Viewpoint - Xperi Inc. (XPER) is positioned favorably in the connected car software advertising market and is experiencing growth in its Pay-TV business due to a shift in consumer preferences towards OTT and streaming services [2][17]. Company Performance - XPER stock has gained 25.2% over the past six months, outperforming the Zacks S&P 500 composite growth of 11.1% but underperforming the industry rally of 48.9% [19]. - The stock closed at $10.2, slightly below its 52-week high of $10.4, and is trading above its 50-day moving average, indicating bullish investor sentiment [5]. Market Opportunities - The global market for connected car software advertising was valued at $84.7 billion in 2022 and is projected to grow at a CAGR of 13.4% from 2023 to 2030, with the U.S. market expected to grow at a CAGR of 11.6% during the same period [21]. - XPER has secured a second DTS AutoStage video design win from a Japanese automotive OEM, with deployments expected to start in 2025, and has signed an AutoStage license agreement with an American car company [7]. Financial Metrics - XPER is currently priced at 0.9 times forward 12-month sales per share, significantly lower than the industry average of 6.3 times, and has a trailing 12-month EV-to-EBITDA ratio of 21.3 times, compared to the industry average of 88.5 times [11]. - The consensus estimate for 2024 earnings is 87 cents per share, indicating a more than 100% increase from the previous year, with a projected 3.5% year-over-year rise to 90 cents per share in 2025 [16]. Subscriber Growth - IPTV subscribers have consistently increased over the past three quarters, growing from 2 million in Q1 2024 to 2.4 million in Q3 2024, which is expected to enhance the company's revenue [13]. - The shift towards OTT platforms is driving growth in XPER's Pay-TV business, as consumers move away from traditional TV [22][23].