Arteris (AIP) AI Stock Analysis

• Market Cap: $404.32M
• Dividend Yield: N/A
• Average Volume (3M): 1.53M
• Price to Earnings (P/E): ―
• Beta (1Y): 2.16
• Revenue Growth: 18.64%
• EPS Growth: 16.54%
• Country: US
• Employees: 267
• Sector: Technology
• Sector Strength: 94
• Industry: Semiconductors
• EPS (TTM): -0.11
• Shares Outstanding: 42,649,918
• 10 Day Avg. Volume: 3,778,279
• 30 Day Avg. Volume: 1,526,073
• 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: 0.91
• Enterprise Value/Revenue: 5.82
• Enterprise Value/Gross Profit: 6.54
• Enterprise Value/Ebitda: -15.04
• 1Y Price Target: $13.75
• Price Target Upside: 45.04% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 51 Neutral
• Price Target: $10.00 ▲(5.49% Upside)

Arteris' overall stock score is primarily influenced by its financial performance challenges, including negative profitability and cash flow issues. Technical analysis shows positive momentum, while the earnings call provided a mixed outlook with strong growth but rising costs. Valuation remains a concern due to negative earnings.

Positive Factors

Customer Expansion

The expansion of customer wins, including but not limited to AMD, for AI/chiplet IP featuring higher ASPs is a promising indicator for future growth prospects.

Record Performance Indicators

Record annual contract value plus royalties and strong free cash flow generation indicate strong underlying demand for Arteris' network-on-chip IP solutions.

Strategic Partnerships

Arteris announced a strategic win with AMD, which will utilize its FlexGen NoC IP to provide high-performance data transport in AMD chiplets.

Negative Factors

Economic Uncertainty

Wider full-year guidance has been given due to economic uncertainty, potentially seen as overly conservative.

Profitability Challenges

Near-term profitability will continue to be sacrificed for growth with the company's non-GAAP operating loss guidance worsening, partially due to FX.

Royalty Revenue Decline

Lower-than-modeled royalty revenue has resulted in a slight downside flowing through into the upcoming quarter guidance.

Arteris Business Overview & Revenue Model

Company Description

Arteris (AIP) is a leading provider of interconnect and IP solutions for system-on-chip (SoC) design, primarily serving markets such as automotive, artificial intelligence, machine learning, and consumer electronics. The company's flagship products are its network-on-chip (NoC) interconnect IP and associated software tools, which enable efficient and scalable SoC design, enhancing performance while reducing power consumption and cost.

How the Company Makes Money

Arteris makes money primarily by licensing its intellectual property (IP) solutions to semiconductor and electronic device manufacturers who integrate these solutions into their SoC designs. The company charges upfront licensing fees as well as royalties based on the production volume of chips that incorporate its IP. Additionally, Arteris offers maintenance and support services, which provide recurring revenue streams. Strategic partnerships with major semiconductor companies and technology firms also contribute to Arteris' revenue by expanding its market reach and fostering innovation in its product offerings.

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: 9.48
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 9.48 is below the 20-day moving average (MA) of 9.77, above the 50-day MA of 9.28, and above the 200-day MA of 8.70, indicating a neutral trend. The MACD of 0.10 indicates Positive momentum. The RSI at 48.62 is Neutral, neither overbought nor oversold. The STOCH value of 13.91 is Positive, 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	67 Neutral	$306.43M	21.08	23.09%	6.31%	-9.22%	-13.57%
Sector *	61 Neutral	$36.30B	7.26	-7.27%	1.97%	7.74%	-7.92%
AEHR	59 Neutral	$564.20M	19.55	-3.34%	―	-10.95%	-111.40%
INDI	56 Neutral	$1.01B	―	-36.20%	―	-7.49%	-64.33%
AIP	51 Neutral	$404.32M	―	-1369.57%	―	18.64%	16.54%
XPER	49 Neutral	$272.47M	―	-0.92%	―	-6.09%	97.33%
BZAI	46 Neutral	$384.36M	―	-1405.64%	―	―	-10774.57%

Arteris Corporate Events

Arteris Holds Annual Stockholders Meeting, Elects Directors

On June 3, 2025, Arteris, Inc. held its Annual Meeting of Stockholders where two key proposals were voted upon. The stockholders elected two Class I directors, K. Charles Janac and S. Atiq Raza, to serve until the 2028 annual meeting, and ratified Deloitte & Touche, LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025.

The most recent analyst rating on (AIP) stock is a Buy with a $15.00 price target. To see the full list of analyst forecasts on Arteris stock, see the AIP Stock Forecast page.