Arteris (AIP) AI Stock Analysis

• Market Cap: $428.63M
• Dividend Yield: N/A
• Average Volume (3M): 570.08K
• Price to Earnings (P/E): ―
• Beta (1Y): 2.12
• Revenue Growth: 18.64%
• EPS Growth: 16.54%
• Country: US
• Employees: 267
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): -0.11
• Shares Outstanding: 42,649,918
• 10 Day Avg. Volume: 535,783
• 30 Day Avg. Volume: 570,082
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.86
• Enterprise Value/Revenue: 5.82
• Enterprise Value/Gross Profit: 6.54
• Enterprise Value/Ebitda: -15.04
• 1Y Price Target: $15.00
• Price Target Upside: 49.25% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

• Rating: 45 Neutral
• Price Target: $8.50 ▼(-15.42% Downside)

Arteris' overall stock score is driven by significant financial performance challenges, including profitability and cash flow issues. While there is positive revenue growth and strategic partnerships, these are overshadowed by financial instability and valuation concerns.

Positive Factors

Strategic Partnership

The partnership with AMD, a top semiconductor company, enhances Arteris' market position and validates its technology, potentially leading to increased adoption and revenue growth.

Revenue Growth

Consistent revenue growth indicates strong demand for Arteris' products, supporting long-term expansion and market penetration.

High Gross Profit Margin

A high gross profit margin reflects efficient cost management and strong pricing power, contributing to potential future profitability as revenue scales.

Negative Factors

Negative Free Cash Flow

Negative free cash flow indicates challenges in generating sufficient cash from operations, which may hinder investment in growth opportunities and financial stability.

Operating Losses

Persistent operating losses highlight difficulties in achieving profitability, which could impact long-term sustainability and investor confidence.

Financial Stability Concerns

Negative equity and financial instability pose risks to Arteris' solvency and ability to secure financing, potentially affecting its operational capabilities.

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 shows revenue growth but faces significant challenges in profitability and financial stability. The high gross profit margin is positive, yet negative net income and equity raise concerns about long-term viability. Cash flow management needs improvement to support financial stability.

Income Statement

Arteris shows a consistent revenue growth trend, with a TTM revenue growth rate of 3.14%. However, the company is struggling with profitability, as evidenced by negative net profit margins and EBIT margins. The gross profit margin remains high at 89.21%, indicating efficient cost management relative to revenue. Overall, the income statement reflects growth potential but significant challenges in achieving profitability.

Balance Sheet

The balance sheet reveals a concerning financial structure with negative stockholders' equity, leading to a negative debt-to-equity ratio. The return on equity is also negative, indicating losses relative to equity. The equity ratio is not directly calculable due to negative equity, highlighting financial instability. These factors suggest a high-risk financial position with potential solvency issues.

Cash Flow

Cash flow analysis shows negative operating and free cash flows, with a significant decline in free cash flow growth. The operating cash flow to net income ratio is low, indicating challenges in converting income into cash. However, the free cash flow to net income ratio is relatively stable, suggesting some ability to manage cash relative to net losses. Overall, cash flow management needs improvement to support financial stability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	63.24M	57.72M	53.67M	50.38M	37.86M	31.81M
Gross Profit	56.29M	51.76M	48.59M	46.10M	34.13M	30.32M
EBITDA	-24.45M	-24.83M	-28.52M	-25.35M	-20.27M	-1.25M
Net Income	-33.14M	-33.64M	-36.87M	-27.10M	-23.38M	-3.26M
Balance Sheet
Total Assets	106.88M	106.14M	102.80M	115.52M	120.44M	42.74M
Cash, Cash Equivalents and Short-Term Investments	38.05M	43.84M	41.17M	68.15M	85.83M	11.74M
Total Debt	7.36M	5.99M	7.75M	3.62M	3.91M	4.77M
Total Liabilities	114.41M	107.32M	87.70M	77.98M	67.54M	54.74M
Stockholders Equity	-7.53M	-1.19M	15.10M	37.53M	52.90M	-12.01M
Cash Flow
Free Cash Flow	-1.75M	-1.04M	-17.23M	-7.82M	-1.62M	1.51M
Operating Cash Flow	-1.13M	-720.00K	-15.73M	-6.77M	-814.00K	2.16M
Investing Cash Flow	-5.99M	970.00K	-4.69M	-37.48M	-1.36M	-5.15M
Financing Cash Flow	1.09M	-262.00K	-2.92M	-4.15M	76.25M	790.00K

Arteris Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 10.05
• 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 10.05 is above the 20-day moving average (MA) of 9.32, above the 50-day MA of 9.55, and above the 200-day MA of 8.88, indicating a bullish trend. The MACD of 0.18 indicates Negative momentum. The RSI at 56.65 is Neutral, neither overbought nor oversold. The STOCH value of 78.54 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	75 Outperform	322.06M	22.15	23.81%	6.08%	-9.22%	-13.57%
AEHR	58 Neutral	966.20M	-235.37	-3.18%	―	-10.95%	-111.40%
INDI	50 Neutral	856.05M	-4.72	-37.55%	―	-7.49%	-64.33%
BZAI	48 Neutral	407.40M	-1.84	3171.89%	―	―	-3299.52%
XPER	48 Neutral	299.30M	-75.82	6.30%	―	-6.09%	97.33%
AIP	45 Neutral	$428.63M	―	-1369.57%	―	18.64%	16.54%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%