Ceva (CEVA) AI Stock Analysis

• Market Cap: $655.33M
• Dividend Yield: N/A
• Average Volume (3M): 328.65K
• Price to Earnings (P/E): ―
• Beta (1Y): 2.18
• Revenue Growth: 7.71%
• EPS Growth: -44.25%
• Country: US
• Employees: 406
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 0.07
• Shares Outstanding: 23,882,242
• 10 Day Avg. Volume: 311,879
• 30 Day Avg. Volume: 328,646
• 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: 0.57
• Enterprise Value/Revenue: 3.50
• Enterprise Value/Gross Profit: 4.05
• Enterprise Value/Ebitda: -41.10
• 1Y Price Target: $34.25
• Price Target Upside: 31.03% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 54 Neutral
• Price Target: $28.00 ▲(7.12% Upside)

Ceva's overall stock score reflects its financial challenges, particularly in profitability and cash flow management. While technical indicators show some positive momentum, the negative valuation metrics and mixed earnings call results highlight the need for strategic improvements to enhance financial health and investor confidence.

Positive Factors

AI Business Expansion

The expansion into AI with new customer agreements positions Ceva for future growth, leveraging the increasing demand for AI solutions across industries.

Strong Licensing Execution

Securing new licensing agreements, especially with first-time and OEM customers, strengthens Ceva's market position and enhances revenue stability.

Growth in Consumer IoT

Significant growth in consumer IoT shipments reflects strong demand and Ceva's ability to capture market share in a rapidly expanding sector.

Negative Factors

Revenue Decline

A decline in revenue indicates potential challenges in maintaining market competitiveness and could impact long-term financial stability.

Operating Loss

The significant increase in operating loss suggests operational inefficiencies that could hinder profitability and require strategic adjustments.

Royalties Year-over-Year Decrease

A decrease in royalty revenue highlights challenges in the smartphone market, potentially affecting Ceva's revenue streams and growth prospects.

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 generates revenue primarily through licensing its technologies to semiconductor manufacturers and system-on-chip (SoC) developers. The company's revenue model is based on upfront licensing fees, ongoing royalties based on the number of chips sold that incorporate Ceva's technology, and service fees for technical support and additional services. Key revenue streams include licensing agreements for DSP cores and AI processing units, which are critical for applications in smartphones, smart home devices, and automotive systems. Additionally, Ceva has established significant partnerships with major semiconductor companies, enhancing its market presence and contributing positively to its earnings through collaborative development projects and joint marketing initiatives.

Ceva Financial Statement Overview

Summary

Ceva's financials show robust revenue growth and effective cost management, but profitability remains a challenge with negative net and EBIT margins. The balance sheet is stable with low debt and strong liquidity, while cash flows are improving but constrained 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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	106.35M	106.94M	97.42M	134.65M	122.71M	100.33M
Gross Profit	91.98M	94.17M	85.77M	107.60M	105.88M	89.58M
EBITDA	-9.05M	-3.41M	-8.58M	15.01M	14.03M	5.06M
Net Income	-4.25M	-8.79M	-11.88M	-23.18M	396.00K	-2.38M
Balance Sheet
Total Assets	302.84M	310.09M	304.08M	308.44M	328.66M	306.95M
Cash, Cash Equivalents and Short-Term Investments	154.65M	161.62M	166.54M	139.48M	154.86M	130.13M
Total Debt	4.37M	5.56M	6.46M	9.69M	8.40M	8.74M
Total Liabilities	36.95M	42.39M	39.74M	49.57M	51.93M	46.06M
Stockholders Equity	265.89M	266.56M	264.34M	258.87M	276.73M	260.89M
Cash Flow
Free Cash Flow	-225.00K	516.00K	-9.21M	3.42M	23.61M	12.23M
Operating Cash Flow	2.22M	3.47M	-6.33M	6.92M	25.80M	15.16M
Investing Cash Flow	10.16M	-2.45M	10.84M	-15.12M	-16.71M	-15.22M
Financing Cash Flow	-8.38M	-5.57M	-2.77M	-3.31M	3.24M	-2.11M

Ceva Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 26.14
• 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 CEVA, the sentiment is Positive. The current price of 26.14 is below the 20-day moving average (MA) of 27.81, above the 50-day MA of 25.28, and above the 200-day MA of 25.94, indicating a neutral trend. The MACD of 0.78 indicates Positive momentum. The RSI at 51.60 is Neutral, neither overbought nor oversold. The STOCH value of 14.35 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CEVA.

Ceva Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
INDI	59 Neutral	$1.30B	―	-36.20%	―	-7.49%	-64.33%
ICHR	58 Neutral	$775.11M	―	-2.98%	―	15.45%	49.82%
SKYT	58 Neutral	$766.00M	―	-34.11%	―	-10.53%	36.86%
AEHR	55 Neutral	$777.77M	-106.09	-5.43%	―	-3.23%	-122.16%
CEVA	54 Neutral	$655.33M	-61.68	-3.81%	―	7.71%	-44.25%
AIP	45 Neutral	$584.73M	―	―	―	18.64%	16.54%

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.