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Ceva Inc (CEVA)
NASDAQ:CEVA
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Ceva
(NASDAQ:CEVA)
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Rating:52Neutral
Price Target:
$21.00
▲(5.69% Upside)
Action:ReiteratedDate:02/28/26
The score is anchored by weak financial performance (ongoing GAAP losses and limited free-cash-flow generation) despite a low-debt balance sheet and strong gross margins. The earnings call was constructive with growth guidance and licensing/AI momentum, but technicals remain weak (below major moving averages with negative MACD) and valuation support is limited due to negative earnings.
Positive Factors
Very high gross margins
Sustained gross margins near 88–91% indicate durable product economics and pricing power in CEVA's IP licensing business. High gross margins provide structural room to invest in R&D and support multi‑year licensing programs even while operating scale and op‑leverage are being built.
Conservative balance sheet and liquidity
Low debt‑to‑equity and roughly $222M of year‑end liquidity reduce financial risk and provide runway for licensing commercialization, product development, and deal execution. This conservatism supports multi‑year investment in AI/IP wins without immediate financing pressure.
AI/NPU licensing momentum and scale
Multiple NPU and AI wins, including a top PC OEM deal and record 2.1B cumulative device shipments, create structural upside through multi‑year royalty streams and deeper multi‑IP engagements. This validates CEVA's AI strategy and can drive recurring revenue as customers deploy designs.
Negative Factors
Persistent GAAP losses
Despite strong gross margins, CEVA has delivered GAAP operating and net losses in recent years, reflecting fixed operating cost pressure versus current scale. Continued loss‑making status constrains retained earnings, limits shareholder returns, and requires sustained margin and revenue improvement for durable profitability.
Weak, volatile free cash flow
Operating cash generation has been small and volatile versus reported losses, giving limited internal funding for R&D, M&A, or buffer against cyclicality. Reliance on external financing (e.g., recent follow‑on) could persist if cash conversion doesn't sustainably improve.
Royalty timing and end‑market concentration risks
A meaningful portion of revenue depends on royalties whose timing is tied to customer production cycles and memory/phone market dynamics. Declines in modem, industrial, and some Bluetooth shipments highlight exposure to end‑market cyclicality and create multi‑quarter variability in durable revenue streams.
Ceva (CEVA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$551.47M
Dividend YieldN/A
Average Volume (3M)416.67K
Price to Earnings (P/E)―
Beta (1Y)2.25
Revenue Growth5.55%
EPS Growth-239.94%
CountryUS
Employees406
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)0.18
Shares Outstanding27,754,135
10 Day Avg. Volume436,628
30 Day Avg. Volume416,666
Financial Highlights & Ratios
PEG Ratio-2.60
Price to Book (P/B)1.55
Price to Sales (P/S)4.77
P/FCF Ratio1.01K
Enterprise Value/Market Cap0.98
Enterprise Value/Revenue4.94
Enterprise Value/Gross Profit5.67
Enterprise Value/Ebitda-119.97
Forecast
1Y Price Target
$30.50Price Target Upside53.50% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)0.5
Revenue Forecast (FY)$120.38M
Ceva Business Overview & Revenue Model
Company DescriptionCEVA, Inc. operates as a licensor of wireless connectivity and smart sensing technologies to semiconductor and original equipment manufacturer (OEM) companies worldwide. It designs and licenses various digital signal processors, AI processors, wireless platforms, and complementary software for sensor fusion, image enhancement, computer vision, voice input, and artificial intelligence (AI). The company licenses a family of wireless connectivity and smart sensing technologies, and integrated IP solutions, including DSP-based platforms for 5G baseband processing in mobile, IoT, and infrastructure; imaging and computer vision for any camera-enabled devices; audio/voice/speech and ultra-low power always-on/sensing applications for multiple IoT markets; sensor fusion software and inertial measurement unit solutions for hearables, wearables, AR/VR, PC, robotics, remote controls, and IoT; and wireless IoT for Bluetooth, Wi-Fi 4/5/6/6E, Ultra-wideband (UWB), and NB-IoT. Its technologies are licensed to companies, which design, manufacture, market, and sell application-specific integrated circuits and application-specific standard products to mobile, consumer, automotive, robotics, industrial, aerospace and defense, and IoT companies for incorporation into various end products. The company delivers its DSP cores, platforms, and AI processors in the form of a hardware description language definition; and offers development platforms, software development kits, and software debug tools that facilitate system design, debug, and software development. The company licenses its technology through a direct sales force. The company was formerly known as ParthusCeva, Inc. and changed its name to CEVA, Inc. in December 2003. CEVA, Inc. was incorporated in 1999 and is headquartered in Rockville, Maryland.
How the Company Makes MoneyCeva generates revenue primarily through the licensing of its semiconductor IP cores, which are integrated into customer products across multiple sectors. The company charges licensing fees for the use of its technology, which can be structured as one-time upfront payments or recurring royalties based on the volume of chips sold that incorporate Ceva's IP. Additionally, Ceva offers design services and support, providing further revenue opportunities through consulting and customization of its solutions for specific customer needs. Strategic partnerships with major semiconductor manufacturers and technology companies also enhance Ceva's market presence and contribute to its earnings by expanding its customer base and driving adoption of its technologies in various applications.
Ceva Earnings Call Summary
Earnings Call Date:Feb 17, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 13, 2026
Earnings Call Sentiment Positive
The call emphasized strong momentum across licensing, connectivity, and emerging AI/NPU opportunities with record quarterly revenue, record annual device shipments (2.1B), robust licensing deal flow and an estimated $125M lifetime royalty potential from 2025 deals. Profitability improved on a non‑GAAP basis and the balance sheet was strengthened with ~$63M net from a follow-on offering and ~$222M total liquidity. Offsetting these positives are continued smartphone and modem softness that pressured annual royalties (down 2%), notable declines in industrial and some Bluetooth shipments, meaningful FX-driven expense pressure (~$5M), and near-term seasonality (Q1 guidance below Q4). Overall, the positives around record revenue, AI/NPU traction, connectivity strength, and improving non‑GAAP profitability outweigh the operational and macro headwinds, supporting a constructive outlook into 2026.Q4-2025 Updates
Positive Updates
Record Quarterly Revenue
Q4 2025 delivered the highest quarterly revenue in company history, up 7% year-over-year (excluding the divested Intrinsix business) and 10% sequentially.
Licensing Revenue Growth and Deal Activity
Licensing and related revenue increased 11% year-over-year to $17.5M in Q4 (56% of total revenue). CEVA signed 18 licensing agreements in the quarter (including three NPU deals and five OEM deals) and 54 licensing agreements for all of 2025 (including 10 OEMs).
Strength in AI and NPU Momentum
AI processor licensing represented a meaningful portion of 2025 licensing revenue. Company signed multiple NPU deals (including an NPU win with a top PC OEM) and estimates aggregate lifetime royalty potential of $125,000,000 from 2025 agreements; management expects some NPU-derived royalties to begin in 2027.
Connectivity Franchise and Win Diversity
Connectivity IP saw strong demand: Q4 included Wi‑Fi 7, Bluetooth HDT and three Bluetooth/Wi‑Fi combo wins, plus a software licensing deal (MotionEngine) with a leading TV platform. Nearly 30 new engagements for Bluetooth and Wi‑Fi were signed during 2025.
Record Annual and Quarterly Unit Shipments
CEVA-powered devices reached a record 2.1 billion units in 2025 (up 6% YoY). Q4 Wi‑Fi shipments were a quarterly record (86M, +30% YoY) and cellular IoT Q4 shipments hit a quarterly record (60M, +30% YoY). Annual Wi‑Fi shipments grew 48% YoY and cellular IoT shipments grew 42% YoY.
Best Royalty Quarter in Four Years and Royalty Strength
Q4 was the company's strongest royalty quarter in more than four years. For the year, Wi‑Fi royalties were up 70% YoY and cellular IoT royalties increased 20% YoY, while royalties overall showed sequential growth each quarter.
Profitability Improvement on Non-GAAP Basis
For 2025, non‑GAAP net income increased 20% year-over-year to $4.9M (86% YoY increase cited for Q4 non‑GAAP metrics) and non‑GAAP diluted EPS rose to $0.18 (up 17% YoY on annual basis; Q4 non‑GAAP EPS +71% YoY to $0.18). Non‑GAAP gross margin remained strong at ~88%.
Strong Balance Sheet and Cash Raise
Year-end cash, cash equivalents, marketable securities and bank deposits were approximately $222M. The company completed a 3.5M share follow-on offering in Q4, netting roughly $63M to strengthen the balance sheet.
Scale and Long-Term Franchise Indicators
Reached 20 billion cumulative CEVA-powered devices and reported that Smart Edge applications generated 86% of total revenue in 2025. Twelve customers licensed multiple CEVA technologies, indicating multi‑IP engagements and deeper customer integration.
2026 Outlook Favoring Growth
Management expects 2026 revenue growth of 8%–12% year-over-year, modest non‑GAAP expense growth (1%–3%) and sustained non‑GAAP gross margins (~88%), with momentum driven by AI adoption, integrated engagements, and continued connectivity leadership.
Negative Updates
Annual Royalties Decline and Smartphone/Memory Headwinds
Royalty revenue for the full year was down 2% YoY, primarily driven by smartphone softness and memory supply/price issues that impacted unit shipments and timing of royalty recognition.
Declines in Modem and Industrial Shipments
Annual modem shipments fell 18% YoY to 280M units. Industrial IoT annual shipments declined 31% YoY (to 87M units) and Q4 industrial shipments fell from 35M to 19M (down ~45.7% YoY).
Bluetooth Shipment Softness
Bluetooth shipments were down in Q4 (303M vs. 343M in prior-year quarter, ~‑11.6% YoY) and annual Bluetooth shipments were roughly flat year-over-year, indicating pockets of softness in that segment.
GAAP Loss and Q4 Net Loss
GAAP operating loss for Q4 was $0.4M and GAAP net loss was $1.1M (diluted loss per share $0.04), reflecting that GAAP profitability has not fully recovered despite non‑GAAP gains.
Foreign Exchange Headwinds Increasing Expenses
Strengthening euro and Israeli shekel versus the US dollar created FX headwinds; non‑US dollar-based expenses (mainly R&D abroad) are expected to increase ~10% YoY, representing an incremental cost of about $5M in 2026.
Short‑Term Seasonality and Q1 Guidance Weakness
Q1 2026 revenue guidance ($24M–$28M) is sequentially lower than record Q4, with gross margin expected to dip (GAAP ~86%, non‑GAAP ~87%) due to typical seasonality and lower seasonal royalties; management notes first-half growth may be weaker than second half.
Rising Equity-Based Compensation
2026 equity-based compensation is forecasted to increase significantly (management cited a ~35%–40% YoY rise), adding near-term non-cash expense pressure and raising non‑GAAP expense guidance to $104.4M–$108.4M.
Uncertainty in Timing of Royalty Realization
While multi-year lifetime royalty potential is cited (e.g., $125M estimate), management emphasizes uncertainty in the timing and realization of royalties due to customer deployment schedules, memory pricing, and market adoption.
Company Guidance
CEVA guided 2026 revenue growth of 8–12% versus 2025, with Q1 revenue of $24.0–$28.0M (seasonally lower than Q4 but above 2025 at the midpoint) and expect H1 growth to be lower than H2; full‑year non‑GAAP gross margin ~88% (Q1 GAAP ~86% / Q1 non‑GAAP ~87%). They forecast total 2026 non‑GAAP expenses of $104.4–$108.4M (non‑GAAP COGS up ≈$0.5M; non‑GAAP operating expenses up ≈$6.1M), with organic non‑GAAP expense growth of 1–3% excluding FX and a ~10% increase in non‑USD R&D costs (~$5.0M FX headwind). Q1 GAAP OpEx is $27.6–$28.6M; Q1 non‑GAAP OpEx $22.2–$23.2M. Equity‑based comp is forecast at $22.0–$23.5M (up ~35–40% YoY); amortization and acquisition costs each ~$400–$500K.Ceva Financial Statement Overview
Summary
Strong gross margins (~87–91%) and a conservative, low-leverage balance sheet support resilience, but persistent operating/net losses and only marginally positive, volatile free cash flow keep overall financial quality below average.Income Statement
Revenue has grown overall, with 2025 up ~1.9% after a softer 2024, but the longer-term trend is uneven (notably the 2023 decline). Profitability is the key drag: despite very strong gross margins (~87–91%), operating results have been loss-making in most recent years (negative operating margin in 2023–2025), and net margins remain negative in 2022–2025. The setup suggests solid product economics, but operating costs are still too high relative to current scale.46
Neutral
Balance Sheet
The balance sheet looks conservative with low leverage: debt-to-equity is modest across the period (about 0.02–0.09), and equity is sizable relative to assets. That said, returns on equity are consistently negative in recent years, reflecting the lack of sustainable profitability rather than balance-sheet stress. Overall financial risk from leverage appears limited, but continued losses could weigh on equity over time.73
Positive
Cash Flow
Cash generation is mixed. Operating cash flow returned to positive in 2024–2025 (~$3.5M each year) after a negative 2023, but it is relatively small versus the income-statement loss, indicating weaker cash conversion in the latest year. Free cash flow is barely positive in 2024–2025 (~$0.5M) and was meaningfully negative in 2023, showing volatility and limited cushion for reinvestment without relying on the balance sheet.40
Negative
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 109.60M | 106.94M | 97.42M | 120.58M | 113.83M |
| Gross Profit | 95.44M | 94.17M | 85.77M | 105.45M | 103.45M |
| EBITDA | -554.00K | -3.41M | -8.58M | 12.15M | 16.63M |
| Net Income | -10.64M | -8.79M | -11.88M | -23.18M | 396.00K |
Balance Sheet | |||||
| Total Assets | 388.26M | 308.95M | 304.08M | 308.44M | 331.77M |
| Cash, Cash Equivalents and Short-Term Investments | 221.98M | 163.64M | 166.54M | 138.31M | 154.86M |
| Total Debt | 30.52M | 5.56M | 6.46M | 7.89M | 8.40M |
| Total Liabilities | 51.80M | 42.39M | 39.74M | 49.57M | 55.04M |
| Stockholders Equity | 336.46M | 266.56M | 264.34M | 258.87M | 276.73M |
Cash Flow | |||||
| Free Cash Flow | 516.00K | 516.00K | -9.21M | 3.42M | 23.61M |
| Operating Cash Flow | 3.47M | 3.47M | -6.33M | 6.92M | 25.80M |
| Investing Cash Flow | -2.45M | -2.45M | 10.84M | -15.12M | -16.71M |
| Financing Cash Flow | -5.57M | -5.57M | -2.77M | -3.31M | 3.24M |
Ceva Technical Analysis
Negative
19.87
Price Trends
21.69
Negative
22.77
Negative
22.98
Negative
Market Momentum
-0.54
Positive
43.72
Neutral
46.85
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CEVA, the sentiment is Negative. The current price of 19.87 is below the 20-day moving average (MA) of 20.62, below the 50-day MA of 21.69, and below the 200-day MA of 22.98, indicating a bearish trend. The MACD of -0.54 indicates Positive momentum. The RSI at 43.72 is Neutral, neither overbought nor oversold. The STOCH value of 46.85 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CEVA.
Ceva Risk Analysis
Ceva disclosed 34 risk factors in its most recent earnings report. Ceva reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Ceva Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $1.37B | 7.47 | 99.25% | ― | 0.19% | ― | |
62 Neutral | $1.55B | -12.29 | -7.72% | ― | 16.86% | -26.89% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
54 Neutral | $1.30B | -53.42 | -7.08% | ― | -3.23% | -122.16% | |
52 Neutral | $551.47M | -49.15 | -3.73% | ― | 5.55% | -239.94% | |
47 Neutral | $579.28M | -5.48 | -37.84% | ― | -4.99% | -12.11% | |
47 Neutral | $710.20M | -19.92 | 361.65% | ― | 20.45% | 12.28% |
* Technology Sector Average
CEVA
Ceva
19.87
-9.92
-33.30%
AEHR
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42.45
33.67
383.49%
ICHR
Ichor Holdings
44.83
19.20
74.91%
INDI
indie Semiconductor
2.59
0.20
8.37%
SKYT
SkyWater Technology
28.15
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262.76%
AIP
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15.62
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109.38%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.