Arteris (AIP) AI Stock Analysis

• Market Cap: $645.21M
• Dividend Yield: N/A
• Average Volume (3M): 605.40K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.97
• 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: 404,194
• 30 Day Avg. Volume: 605,405
• 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: 0.62
• Enterprise Value/Revenue: 6.06
• Enterprise Value/Gross Profit: 6.73
• Enterprise Value/Ebitda: -15.44
• 1Y Price Target: $17.83
• Price Target Upside: 23.73% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): -0.36
• Revenue Forecast (FY): $68.97M

• Rating: 50 Neutral
• Price Target: $15.00 ▲(4.09% Upside)

Arteris' overall stock score is primarily impacted by its financial instability, with negative equity and profitability issues weighing heavily. Technical analysis provides a positive outlook with strong momentum, while the earnings call highlights growth in contract values and product adoption. However, valuation concerns due to negative earnings and the absence of dividends further dampen the score.

Positive Factors

Revenue Growth

The strong revenue growth trend indicates Arteris' expanding market presence and successful product adoption, particularly in AI and automotive sectors, which are likely to sustain future growth.

Strategic Partnerships

The partnership with Black Sesame Technologies enhances Arteris' position in the autonomous vehicle market, potentially leading to increased revenue streams and market influence.

Product Innovation

Arteris' innovative IP solutions like FlexNoC 5 are critical in enabling advanced AI applications, supporting long-term competitive advantage and market leadership in the semiconductor industry.

Negative Factors

Profitability Issues

Persistent profitability challenges could hinder Arteris' ability to reinvest in growth opportunities and maintain financial health, posing a risk to long-term sustainability.

Negative Equity

Negative equity reflects financial instability and high leverage, which can limit Arteris' operational flexibility and increase vulnerability to economic downturns.

Cash Flow Challenges

Negative free cash flow growth indicates difficulties in generating cash, which may constrain Arteris' ability to fund operations and invest in strategic initiatives, impacting long-term growth.

Arteris Business Overview & Revenue Model

Company Description

Arteris (AIP) is a technology company specializing in the development of advanced interconnect and system-on-chip (SoC) design solutions. Operating primarily in the semiconductor and electronic design automation (EDA) sectors, Arteris provides innovative tools and IP (intellectual property) products that enable efficient chip design for a variety of applications, including automotive, consumer electronics, and IoT. The company's core offerings include network-on-chip (NoC) technology, which enhances data communication within chips, and various design services that optimize performance and reduce time-to-market for semiconductor manufacturers.

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: 14.41
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 14.41 is above the 20-day moving average (MA) of 13.97, above the 50-day MA of 13.10, and above the 200-day MA of 9.55, indicating a bullish trend. The MACD of 0.26 indicates Negative momentum. The RSI at 59.36 is Neutral, neither overbought nor oversold. The STOCH value of 90.61 is Negative, 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	68 Neutral	$304.50M	22.03	22.20%	6.28%	-9.48%	-14.28%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
CEVA	52 Neutral	$508.94M	―	-4.22%	―	5.55%	-239.94%
VLN	51 Neutral	$160.71M	―	-23.56%	―	7.53%	-15.00%
AIP	50 Neutral	$645.21M	―	―	―	20.45%	12.28%
LAES	50 Neutral	$772.88M	―	-45.62%	―	-44.30%	16.42%
BZAI	46 Neutral	$253.05M	―	-1331.73%	―	―	-1827.24%

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.