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On paper, Navitas Semiconductor (NVTS) delivered encouraging financial results. Unfortunately, there were too many challenges, which ultimately led to NVTS stock succumbing to market pressure. While the recent volatility has been steep, the quantitative picture suggests that investors may be better served waiting for a more reliable upside signal.

For the third quarter, Navitas incurred a loss per share of 5 cents, meeting analysts' expectations. On the top line, the tech specialist generated revenue of $10.11 million, beating the consensus target of $10.01 million. However, in the year-ago quarter, Navitas posted sales of $21.68 million, which means that the top line shrank by 53.37%.

To be fair, it wasn’t all bad news for Navitas. In particular, the company was named a power selector partner by Nvidia (NVDA) for its next-generation 800-volt DC AI factory power architecture. It also held $151 million in cash and no debt, thus demonstrating stability in the balance sheet. As well, management achieved a sequential reduction in operating expenses.

However, other critical headwinds overwhelmed sentiment for NVTS stock. Along with the revenue decline, Navitas faces an adverse impact from China-centered tariffs, with the silicon carbide business in particular representing a major risk factor. Moreover, the company’s transition to high-power markets may affect the business model in the near term, resulting in a guidance reduction.

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Quantitatively, the forward 10-week returns of NVTS stock would be expected to form a distributional curve, with outcomes ranging between $9.20 to $10.10 (assuming an anchor price of $9.82). Further, price clustering would be expected to occur predominantly at around $9.70.

Currently, NVTS stock is structured in a 5-5-U sequence: five up weeks, five down weeks, with an overall upward slope. Under this balanced formation, the expected returns would pivot quite negatively, with outcomes ranging between $5 and $12. Moreover, price clustering would be expected to occur at $8.20.

Of course, the quant picture — as with any other methodology — needs to be taken with a grain of salt, especially because exogenous factors can always impact sentiment. Nevertheless, for the time being, data-driven traders may want to wait for a better signal before buying NVTS stock.

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