Is SK hynix (NasdaqGS:SKHY) Undervalued Following the Launch of a New Short ETF?

Short ETF launch puts SK hynix in focus

Leverage Shares by Themes has launched SKHQ, a 1X Short SK Hynix Daily ETF that aims to deliver the opposite of SK hynix (NasdaqGS:SKHY) daily performance before fees and expenses.

The ETF begins trading on Cboe on 2 September 2026. It gives active traders another tool to express short term bearish views on the stock and expands the issuer’s suite of SK hynix linked leveraged products.

SK hynix shares last closed at US$163.68, with the 30 day share price return of 6.02% pointing to building momentum despite a year to date share price decline of 2.58%. Investors are weighing potential Japan expansion against new tools for short term bearish positioning like SKHQ.

Compare how traders are positioning around SK hynix by scanning a hand picked set of AI related chipmakers in the 55 AI infrastructure stocks.

SK hynix now trades at a steep discount to both analyst targets and some intrinsic value estimates, despite a recent share price rebound. Is the market’s caution on earnings quality and AI demand timing still reasonable at these levels?

Preferred P/E multiple of 7.2x for SK hynix: Is it justified?

On a simple earnings lens, SK hynix trades on a P/E of 7.2x, which looks low compared with both peers and the broader US Semiconductor industry given the last close of $163.68.

The P/E ratio compares the company’s share price with its earnings per share. For a business such as SK hynix, where investors often focus on the earnings cycle and cash generation from memory products, the P/E helps frame what the market is willing to pay for current earnings relative to those of other semiconductor stocks.

Here, the gap is wide. SK hynix trades on a P/E of 7.2x, while the peer group averages 52.4x and the US Semiconductor industry average is 45.8x. That is a large discount, which suggests the market is pricing SK hynix earnings more cautiously than the sector despite earnings growth that is described as significant and revenue that is forecast to expand at a quicker pace than the wider US market.

See what the numbers say about this price in the valuation breakdown in the See what the numbers say about this price — find out in our valuation breakdown..

Result: Price-to-earnings of 7.2x (UNDERVALUED)

However, SK hynix still faces the risk that earnings growth may not match current forecasts and that increased bearish positioning through SKHQ could amplify short term volatility.

Find out about the key risks to this SK hynix narrative.

Another View on SK hynix using the SWS DCF model

The earlier P/E comparison presents SK hynix as inexpensive relative to peers. Our DCF model points in a similar direction. At $163.68, SK hynix trades at a substantial discount to an estimated future cash flow value of $570.03. This raises a clear question: Is the market mispricing long term cash generation, or are the cash flow assumptions too optimistic?

Look into how the SWS DCF model arrives at its fair value in the Look into how the SWS DCF model arrives at its fair value..

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out SK hynix for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 52 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

Given the mix of caution and optimism around SK hynix, it makes sense to check the underlying data and decide quickly where you stand. To weigh the potential risks against the possible rewards, start with the 3 key rewards and 2 important warning signs.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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