Arteris (AIP) AI Stock Analysis

• Market Cap: $652.64M
• Dividend Yield: N/A
• Average Volume (3M): 856.00K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.85
• Revenue Growth: 20.45%
• EPS Growth: 12.28%
• Country: US
• Employees: 267
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): -0.09
• Shares Outstanding: 43,683,773
• 10 Day Avg. Volume: 726,567
• 30 Day Avg. Volume: 855,998
• PEG Ratio: 0.71
• Price to Book (P/B): -333.78
• Price to Sales (P/S): 6.87
• P/FCF Ratio: -379.82
• Enterprise Value/Market Cap: 0.61
• Enterprise Value/Revenue: 6.06
• Enterprise Value/Gross Profit: 6.73
• Enterprise Value/Ebitda: -15.44
• 1Y Price Target: $17.83
• Price Target Upside: 14.96% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): -0.36
• Revenue Forecast (FY): $68.47M

• Rating: 52 Neutral
• Price Target: $15.50 ▼(-0.06% Downside)

Arteris' overall stock score is primarily impacted by its financial performance challenges, including negative equity and cash flow issues. While technical analysis shows a bullish trend, the valuation remains unattractive due to a negative P/E ratio. The earnings call highlights some positive developments, but ongoing financial challenges weigh heavily on the score.

Positive Factors

Revenue Growth

Strong revenue growth indicates robust demand for Arteris' products, suggesting a solid market position and potential for continued expansion.

Product Adoption

Growing adoption in AI and automotive sectors highlights Arteris' competitive edge and ability to meet evolving industry needs, supporting long-term growth.

Cash Position

A strong cash position and no debt provide financial flexibility, enabling investment in growth opportunities and resilience against economic fluctuations.

Negative Factors

Operating Loss

Continued operating losses indicate challenges in achieving profitability, which could impact long-term financial health and investment capacity.

Delayed Royalty Revenue

Delayed royalty revenue realization affects cash flow predictability, posing challenges for financial planning and operational stability.

Negative Equity

Negative equity suggests financial instability, raising concerns about solvency and the company's ability to sustain operations without restructuring.

Arteris Business Overview & Revenue Model

Company Description

Arteris, Inc. provides semiconductor interconnect intellectual property (IP) and IP deployment solutions in the Americas, the Asia Pacific, Europe, and the Middle East. The company develops, licenses, and supports the on-chip interconnect fabric technology used in System-on-Chip (Soc) designs and Network-on-Chip (NoC) interconnect IP. Its products include FlexNoC, a silicon-proven interconnect IP product; FlexNoC Resilience Package, which provides on-chip data protection; Ncore, a silicon-proven and cache coherent interconnect IP product that provides scalable, configurable, and area efficient characteristics; CodaCache, a last-level cache semiconductor IP product; and Physical interconnect aware NoC optimizer, a software tool that estimates physical layout effects during the architecture and logic development stages of an SoC interconnect design; The company also offers FlexWay for IP subsystem interconnect; FlexPSI for All-digital inter chip link; and FlexNoC Physical for linking physical placement and routing tools. In addition, it provides IP deployment software solutions, including specification, design, documentation, artificial intelligence (AI) package, design data intelligence, and harmony trace. The company serves customers in the automotive, AI/machine learning, 5G and wireless communications, data centers, consumer electronics, and other markets. Arteris, Inc. was founded in 2003 and is headquartered in Campbell, California.

How the Company Makes Money

Arteris generates revenue primarily through the licensing of its intellectual property and software solutions to semiconductor companies and system designers. This includes upfront license fees and ongoing royalties based on the usage of its NoC technology and other design tools. Additionally, the company may offer professional services, including training and technical support, which contribute to its revenue. Significant partnerships with major semiconductor firms and participation in industry alliances enhance its market presence and lead to collaborative projects that further drive revenue growth.

Arteris Financial Statement Overview

Summary

Arteris faces significant financial challenges, with consistent revenue growth overshadowed by persistent profitability issues and negative equity. The high gross profit margin suggests operational efficiency, but the inability to achieve net profitability and positive cash flow indicates underlying financial instability. The company needs to address its leverage and cash flow issues to improve its financial health.

Income Statement

Arteris shows a consistent revenue growth trend, with a 4.26% increase in TTM. However, the company struggles with profitability, as evidenced by negative net profit margins and EBIT margins over the periods. The gross profit margin remains high, indicating efficient production, but the inability to translate this into net profits is concerning.

Balance Sheet

The balance sheet reveals a negative stockholders' equity in the TTM, indicating financial instability. The debt-to-equity ratio is negative, suggesting high leverage and potential risk. Although there was a positive return on equity in the TTM, it is due to negative equity, which is not sustainable.

Cash Flow

Cash flow analysis shows negative free cash flow growth in the TTM, indicating cash generation issues. The operating cash flow to net income ratio is low, reflecting challenges in converting income into cash. The free cash flow to net income ratio is negative, further highlighting cash flow concerns.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	65.93M	57.72M	53.67M	50.38M	37.86M	31.81M
Gross Profit	59.32M	51.76M	48.59M	46.10M	34.13M	30.32M
EBITDA	-25.87M	-24.83M	-28.52M	-25.33M	-20.27M	-1.25M
Net Income	-34.45M	-33.64M	-36.87M	-27.39M	-23.38M	-3.26M
Balance Sheet
Total Assets	107.74M	106.14M	102.80M	115.52M	120.44M	42.74M
Cash, Cash Equivalents and Short-Term Investments	39.08M	43.84M	41.17M	68.15M	85.83M	11.74M
Total Debt	6.86M	5.99M	7.75M	3.62M	3.91M	4.77M
Total Liabilities	119.19M	107.32M	87.70M	77.98M	67.54M	49.03M
Stockholders Equity	-11.45M	-1.19M	15.10M	37.53M	52.90M	-6.30M
Cash Flow
Free Cash Flow	-372.00K	-1.04M	-17.23M	-7.82M	-1.62M	1.51M
Operating Cash Flow	932.00K	-720.00K	-15.73M	-6.77M	-814.00K	2.16M
Investing Cash Flow	-2.98M	970.00K	-4.69M	-37.48M	-1.36M	-5.15M
Financing Cash Flow	1.69M	-262.00K	-2.92M	-4.15M	76.25M	790.00K

Arteris Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 15.51
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AIP, the sentiment is Positive. The current price of 15.51 is above the 20-day moving average (MA) of 13.93, above the 50-day MA of 11.83, and above the 200-day MA of 9.29, indicating a bullish trend. The MACD of 0.79 indicates Negative momentum. The RSI at 61.82 is Neutral, neither overbought nor oversold. The STOCH value of 74.40 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AIP.

Arteris Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NVEC	71 Outperform	$314.27M	22.74	22.20%	6.13%	-9.48%	-14.28%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
LAES	53 Neutral	$1.14B	―	-45.62%	―	-44.30%	16.42%
AIP	52 Neutral	$652.64M	―	―	―	20.45%	12.28%
CEVA	51 Neutral	$624.76M	―	-4.22%	―	5.55%	-239.94%
VLN	51 Neutral	$169.15M	―	-24.56%	―	8.70%	-13.95%
BZAI	39 Underperform	$354.88M	―	―	―	―	-3299.52%

Arteris Corporate Events

Arteris, Inc. Earnings Call Highlights Growth and Challenges

Arteris, Inc. recently held its earnings call, revealing a balanced sentiment of strong performance and ongoing financial challenges. The company celebrated record contract values and increased product adoption, particularly in the AI and automotive sectors, while also acknowledging hurdles such as operating losses and delayed royalty revenue realization.

Arteris, Inc. Reports Strong Q3 Growth Amid Losses

Arteris, Inc. is a prominent player in the semiconductor industry, specializing in system IP that enhances the development of high-performance, energy-efficient silicon chips. The company is known for its network-on-chip (NoC) interconnect IP and SoC integration automation software, catering to leading semiconductor and technology firms globally.

Arteris, Inc. Navigates Competitive Pressures and Financial Uncertainties Amid Global Expansion

Arteris, Inc. faces a multitude of business risks that could significantly impact its financial health and operational success. The company is challenged by intense competition from larger entities and third-party providers, which may develop their own IP solutions, potentially reducing demand for Arteris’s offerings. Additionally, the company’s reliance on the acceptance of its semiconductor IP solutions by various market sectors, coupled with its history of net losses, underscores the uncertainty of achieving sustained profitability. Furthermore, Arteris’s dependence on international operations exposes it to regulatory and political risks, while its ongoing need for substantial R&D investment could strain financial resources, especially if anticipated revenues do not materialize.

Arteris, Inc. Earnings Call: Growth Amidst Challenges

Arteris, Inc. recently held its earnings call, revealing a generally positive sentiment with strong revenue growth and strategic customer wins, such as a significant agreement with AMD. However, the company also faced challenges, including increased operating expenses and negative free cash flow, influenced by foreign exchange impacts.

Arteris Reports Record Contract Value and Revenue Growth

Arteris, Inc. is a prominent provider of semiconductor system IP, specializing in accelerating the creation of system-on-chip (SoC) designs for high-performance and power-efficient silicon, serving leading semiconductor and technology companies globally. In its latest earnings report, Arteris announced a record Annual Contract Value plus royalties of $69.1 million for the second quarter of 2025, alongside a 13% year-over-year increase in revenue to $16.5 million. The company also reported a net loss of $9.1 million, or $0.22 per share, reflecting ongoing investments in research and development and sales and marketing efforts. Key highlights from the quarter include strategic partnerships and product innovations, such as AMD licensing Arteris’ FlexGen smart network-on-chip IP and the introduction of Magillem Packaging software to streamline chiplet and SoC assembly. Looking ahead, Arteris remains optimistic about its growth prospects, supported by a robust product portfolio and strong industry partnerships, as it continues to target high-growth markets like AI, autonomous driving, and advanced communications.