Ceva (CEVA) AI Stock Analysis

• Market Cap: $557.25M
• Dividend Yield: N/A
• Average Volume (3M): 241.12K
• Price to Earnings (P/E): ―
• Beta (1Y): 2.18
• Revenue Growth: 13.09%
• EPS Growth: 46.89%
• Country: US
• Employees: 406
• Sector: Technology
• Sector Strength: 95
• Industry: Semiconductors
• EPS (TTM): 0.06
• Shares Outstanding: 23,916,360
• 10 Day Avg. Volume: 214,866
• 30 Day Avg. Volume: 241,118
• PEG Ratio: -10.93
• Price to Book (P/B): 2.06
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 528.20
• Enterprise Value/Market Cap: 0.97
• Enterprise Value/Revenue: 2.22
• Enterprise Value/Gross Profit: 10.45
• Enterprise Value/Ebitda: 17.90
• 1Y Price Target: $32.50
• Price Target Upside: 43.93% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 59 Neutral
• Price Target: $23.50 ▲(4.07%Upside)

CEVA's overall stock score is driven by strong revenue growth and strategic licensing wins, tempered by significant profitability challenges and valuation concerns. Technical indicators provide mixed signals, while earnings call sentiment reflects both achievements and caution due to external factors.

Positive Factors

Business Model Transition

CEVA's transition to focus on its pure IP business model and expand into non-handset end markets is paying off.

Customer Engagement

Management highlighted a significant increase in customer engagement, strong momentum across geographies and record cellular IoT shipments.

Revenue Growth

CEVA reported 13% year-over-year revenue growth, slightly higher than the top end of company guidance, reflecting annual growth in both licensing and royalties.

Negative Factors

Financial Performance Challenges

Management anticipates to grow NG-OpMargin (%) and NG-EPS by ~2x Y/Y (excluding Intrinsix 2023 figures).

Licensing Revenue Dependency

Licensing revenue increased 51% Q/Q with the backlog heading into 3Q cited as strong following the closure of significant deals in the quarter.

Revenue Guidance

Management raised year-end revenue guidance to 8% year-over-year growth at the midpoint and management's tone overall was positive.

Ceva Business Overview & Revenue Model

Company Description

CEVA, 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 Money

CEVA primarily generates revenue through the licensing of its intellectual property (IP) to semiconductor companies and device manufacturers. This includes licensing fees, which are paid upfront for the right to use CEVA's technology, and royalty income, which is typically based on the sales volume of the end products that incorporate CEVA's IP. Additionally, the company may earn revenue from engineering support services provided to its licensees. Strategic partnerships with leading technology firms and ongoing innovation in DSP and AI technologies further enhance its revenue potential by expanding its addressable markets.

Ceva Financial Statement Overview

Summary

Ceva's financial performance is characterized by robust revenue growth and effective cost management, as indicated by a strong gross profit margin of 87.25%. However, the company faces challenges in profitability, with negative net and EBIT margins. The balance sheet is stable with low debt and strong liquidity, while cash flows are improving but still hampered by profitability issues.

Income Statement

Ceva's financial performance shows mixed results. The company has achieved revenue growth of 2.03% in the TTM, but struggles with profitability as evidenced by a negative net profit margin of -1.13% and a negative EBIT margin of -6.46%. The gross profit margin remains strong at 87.25%, indicating effective cost management. However, consistent negative profitability metrics suggest challenges in converting revenue growth into net income.

Balance Sheet

Ceva's balance sheet demonstrates stability with a low debt-to-equity ratio of 0.018 and an equity ratio of 28.92%, reflecting a solid equity base relative to total assets. The return on equity is negative due to net losses, but the company maintains a strong liquidity position with significant cash reserves.

Cash Flow

Ceva's cash flow profile shows improvement in free cash flow, which grew by 104.65% in the TTM. The operating cash flow to net income ratio is positive at 2.76, indicating good cash flow generation relative to net income. However, the free cash flow to net income ratio is lower at 0.85, suggesting limited cash flow conversion from income.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	106.94M	97.42M	134.65M	122.71M	100.33M
Gross Profit	94.17M	85.77M	107.60M	105.88M	89.58M
EBITDA	-3.41M	-8.58M	15.01M	14.03M	5.06M
Net Income	-8.79M	-11.88M	-23.18M	396.00K	-2.38M
Balance Sheet
Total Assets	310.09M	304.08M	308.44M	328.66M	306.95M
Cash, Cash Equivalents and Short-Term Investments	161.62M	166.54M	139.48M	154.86M	130.13M
Total Debt	5.56M	6.46M	9.69M	8.40M	8.74M
Total Liabilities	42.39M	39.74M	49.57M	51.93M	46.06M
Stockholders Equity	266.56M	264.34M	258.87M	276.73M	260.89M
Cash Flow
Free Cash Flow	516.00K	-9.21M	3.42M	23.61M	12.23M
Operating Cash Flow	3.47M	-6.33M	6.92M	25.80M	15.16M
Investing Cash Flow	-2.45M	10.84M	-15.12M	-16.71M	-15.22M
Financing Cash Flow	-5.57M	-2.77M	-3.31M	3.24M	-2.11M

Ceva Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 22.58
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: 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 22.58 is below the 20-day moving average (MA) of 22.93, above the 50-day MA of 21.53, and below the 200-day MA of 26.97, indicating a neutral trend. The MACD of 0.31 indicates Positive momentum. The RSI at 49.51 is Neutral, neither overbought nor oversold. The STOCH value of 38.30 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CEVA.

Ceva Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AOSL	66 Neutral	$815.72M	―	-2.55%	―	3.57%	-134.36%
IMOS	64 Neutral	$627.21M	17.38	4.72%	4.87%	-0.41%	-46.38%
COHU	60 Neutral	$896.11M	―	-9.87%	―	-30.75%	-3668.44%
ICHR	59 Neutral	$716.18M	―	-2.35%	―	13.41%	72.56%
CEVA	59 Neutral	$557.25M	―	-2.51%	―	13.09%	46.89%
Sector *	57 Neutral	HK$14.05B	5.48	-5.77%	5.19%	9.65%	-43.80%
AAOI	44 Neutral	$1.35B	―	-68.45%	―	50.30%	-111.11%

Ceva Corporate Events

Ceva Unveils 2025 Executive Bonus and Equity Plan

Ceva, Inc. has implemented a comprehensive 2025 Executive Bonus Plan for its top executives to enhance competitiveness and align with the company’s strategic goals. The plan, effective January 1, 2025, includes financial and operating profit targets, along with discretionary components, with potential bonuses to be paid in 2026. Additionally, equity awards in the form of restricted stock units and performance-based stock units have been granted contingent on stockholder approval, with vesting scheduled between 2026 and 2028. The company has also amended its director compensation policy to increase cash retainers and equity grants, aligning more closely with peer practices.