Ceva (CEVA) AI Stock Analysis

• Market Cap: $566.25M
• Dividend Yield: N/A
• Average Volume (3M): 254.29K
• Price to Earnings (P/E): ―
• Beta (1Y): 2.20
• Revenue Growth: 7.71%
• EPS Growth: -44.25%
• Country: US
• Employees: 406
• Sector: Technology
• Sector Strength: 92
• Industry: Semiconductors
• EPS (TTM): 0.07
• Shares Outstanding: 23,882,242
• 10 Day Avg. Volume: 324,414
• 30 Day Avg. Volume: 254,295
• 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: 0.66
• Enterprise Value/Revenue: 3.50
• Enterprise Value/Gross Profit: 4.05
• Enterprise Value/Ebitda: -41.10
• 1Y Price Target: $32.40
• Price Target Upside: 42.98% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

• Rating: 54 Neutral
• Price Target: $25.00 ▲(10.33% Upside)

Ceva's overall stock score reflects significant challenges in financial performance, particularly in profitability and cash flow management. While technical indicators show positive momentum, valuation concerns due to ongoing losses and lack of dividends weigh heavily. The earnings call provides some optimism for future growth, but current financial weaknesses are a major concern.

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. (CEVA) is a leading licensor of signal processing platforms and artificial intelligence processors for a wide range of smart and connected devices. The company operates primarily in the semiconductor sector, providing technology solutions for various applications, including mobile, automotive, consumer electronics, and the Internet of Things (IoT). Ceva's core products include digital signal processors (DSPs) and AI processors, along with software and development tools that enable customers to integrate advanced processing capabilities into their devices.

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: Neutral
• Last Price: 22.66
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CEVA, the sentiment is Neutral. The current price of 22.66 is above the 20-day moving average (MA) of 22.54, above the 50-day MA of 22.25, and below the 200-day MA of 26.82, indicating a neutral trend. The MACD of 0.26 indicates Negative momentum. The RSI at 50.31 is Neutral, neither overbought nor oversold. The STOCH value of 65.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CEVA.

Ceva Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	61 Neutral	$35.97B	6.65	-10.17%	1.99%	8.60%	-7.54%
IMOS	58 Neutral	$578.23M	120.07	0.66%	5.45%	0.15%	-92.08%
AOSL	56 Neutral	$786.56M	―	-11.32%	―	5.92%	-746.07%
CEVA	54 Neutral	$566.25M	―	-3.81%	―	7.71%	-44.25%
COHU	54 Neutral	$935.03M	―	-10.09%	―	-21.27%	-207.30%
AAOI	48 Neutral	$1.39B	―	-50.93%	―	77.94%	-75.13%
ICHR	46 Neutral	$616.18M	―	-2.98%	―	15.45%	49.82%

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.