Arteris (AIP) AI Stock Analysis

• Market Cap: $309.38M
• Dividend Yield: N/A
• Average Volume (3M): 218.56K
• Price to Earnings (P/E): ―
• Beta (1Y): 2.18
• Revenue Growth: 14.68%
• EPS Growth: 20.20%
• Country: US
• Employees: 267
• Sector: Technology
• Sector Strength: 75
• Industry: Semiconductors
• EPS (TTM): -0.09
• Shares Outstanding: 41,977,730
• 10 Day Avg. Volume: 332,095
• 30 Day Avg. Volume: 218,565
• PEG Ratio: -0.92
• Price to Book (P/B): -245.07
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -287.94
• Enterprise Value/Market Cap: 0.95
• Enterprise Value/Revenue: 1.34
• Enterprise Value/Gross Profit: 5.80
• Enterprise Value/Ebitda: -2.72
• 1Y Price Target: $13.33
• Price Target Upside: 87.75% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

• Rating: 58 Neutral
• Price Target: $7.50 ▲( 5.63% Upside)

Arteris's overall stock score is primarily influenced by strong revenue growth and positive earnings call highlights. However, profitability challenges, financial leverage risks, and valuation concerns weigh down the score. Positive technical indicators provide some support, but significant economic and operational risks remain.

Positive Factors

Financial Performance

The company reported record annual contract value (ACV) plus royalties, record RPO, and strong FCF generation, an indicator of the strong underlying demand for its network-on-chip IP solutions.

Licensing and Partnerships

Securing a licensing win with a leading Japanese automotive OEM for a new autonomous driving SoC was another highlight, bringing the company's total direct Auto OEM engagements to 10.

Negative Factors

Economic Environment

The uncertain economic environment is impacting demand for Arteris' customers' products, particularly in Automotive and Consumer.

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 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 exhibits significant financial challenges, particularly in profitability and cash flow generation. Despite some revenue growth, negative equity and consistent net losses signal financial instability.

Income Statement

Arteris's financial performance shows a slight improvement in revenue growth, with a 7.57% increase from 2023 to 2024. However, the company struggles with profitability, as indicated by a negative net profit margin and a consistent EBIT loss over recent years. The gross profit margin is strong at 89.68%, but this is overshadowed by the significant net losses, which indicate operational challenges in converting revenue to profit.

Balance Sheet

The balance sheet reveals a negative equity position, with liabilities exceeding assets, which poses a risk to financial stability. The debt-to-equity ratio is not calculable due to negative equity, and this instability is further reflected in the declining stockholders' equity over the years. Despite these concerns, the company maintains a relatively low level of debt.

Cash Flow

Arteris shows negative operating and free cash flows, indicating challenges in cash generation from operations. The operating cash flow to net income ratio is slightly better in 2024 than in 2023, but still negative, suggesting inefficiencies in converting revenue into cash. Free cash flow growth is also negative, highlighting ongoing liquidity issues.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
57.72M	53.67M	50.38M	37.86M	31.81M
	Gross Profit
51.76M	48.59M	46.10M	34.13M	30.32M
	EBIT
-31.60M	-35.14M	-28.86M	-21.77M	-3.78M
	EBITDA
-24.83M	-28.52M	-25.35M	-20.27M	-1.25M
	Net Income Common Stockholders
-33.64M	-36.87M	-27.10M	-23.38M	-3.26M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
43.84M	41.17M	68.15M	85.83M	11.74M
	Total Assets
106.14M	102.80M	115.52M	120.44M	42.74M
	Total Debt
5.99M	7.75M	3.62M	3.91M	4.77M
	Net Debt
-7.69M	-5.94M	-33.80M	-81.91M	-6.97M
	Total Liabilities
107.32M	87.70M	77.98M	67.54M	54.74M
	Stockholders Equity
-1.19M	15.10M	37.53M	52.90M	-12.01M
Cash Flow		Free Cash Flow
-1.04M	-17.23M	-7.82M	-1.62M	1.51M
	Operating Cash Flow
-720.00K	-15.73M	-6.77M	-814.00K	2.16M
	Investing Cash Flow
970.00K	-4.69M	-37.48M	-1.36M	-5.15M
	Financing Cash Flow
-262.00K	-2.92M	-4.15M	76.25M	790.00K

Arteris Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 7.10
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• 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 Negative. The current price of 7.1 is below the 20-day moving average (MA) of 7.19, above the 50-day MA of 6.97, and below the 200-day MA of 8.22, indicating a neutral trend. The MACD of 0.15 indicates Positive momentum. The RSI at 50.73 is Neutral, neither overbought nor oversold. The STOCH value of 14.12 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AIP.

Arteris Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AEHR	71 Outperform	$266.16M	10.91	21.69%	―	-14.48%	46.79%
NVEC	70 Outperform	$339.71M	22.56	23.57%	5.70%	-13.18%	-12.06%
Sector *	61 Neutral	$11.41B	10.19	-7.05%	2.95%	7.46%	-10.52%
AIP	58 Neutral	$309.38M	―	-1369.57%	―	14.68%	20.20%
XPER	57 Neutral	$353.62M	―	-4.71%	―	-4.77%	84.82%
INDI	50 Neutral	$535.53M	―	-32.43%	―	-7.09%	-53.23%
BZAI	41 Neutral	$249.13M	―	-375.37%	―	―	-1005.33%

Arteris Corporate Events

Arteris Board Member Isabelle Geday Resigns

On March 25, 2025, Isabelle F. Geday announced her resignation from the board of directors of Arteris, Inc., effective March 27, 2025, citing personal reasons unrelated to any disagreements with the company’s operations or policies. In response to her unexpected departure and in appreciation of her service since 2020, the board approved the accelerated vesting of her 19,287 restricted stock units, which were initially set to vest in June 2025 or at the company’s 2025 annual meeting.