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Pdf Solutions (PDFS)
NASDAQ:PDFS

PDF Solutions (PDFS) AI Stock Analysis

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PDF Solutions

(NASDAQ:PDFS)

Rating:67Neutral
Price Target:
$21.50
▼(-1.69%Downside)
PDF Solutions shows strong revenue growth and improved gross margins, supported by positive earnings call sentiment and strategic corporate actions. However, the high P/E ratio suggests potential overvaluation, and challenges with profitability, cash flow, and debt levels are significant concerns. Technical indicators reflect a mixed market outlook.

PDF Solutions (PDFS) vs. SPDR S&P 500 ETF (SPY)

PDF Solutions Business Overview & Revenue Model

Company DescriptionPDF Solutions, Inc. provides proprietary software and physical intellectual property products for integrated circuit designs, electrical measurement hardware tools, proven methodologies, and professional services in the United States, China, Japan, Taiwan, and internationally. The company offers Exensio software products, such as Manufacturing Analytics that stores collected data in a common environment with a consistent view for enabling product engineers to identify and analyze production yield, performance, reliability, and other issues; Process Control that provides failure detection and classification capabilities for monitoring, alarming, and controlling manufacturing tool sets; Test Operations that offers data collection and analysis capabilities; and Assembly Operations that provides device manufacturers with the capability to link assembly and packaging data, including fabrication and characterization data over the product life cycle. It also provides design-for-inspection (DFI) Systems, such as DFI on-chip instruments; eProbe non-contactless E-beam tool; and Characterization Vehicle (CV) system, which includes CV test chips and pdFasTest electrical testers, as well as Exensio characterization software, designed to analyze the measurements collected from DFI on-chip instruments using the eProbe tool. In addition, the company offers Cimetrix software products that enables equipment manufacturers to provide industry standard interfaces on their products; and software-as-a-service, software related services, and characterization services. It sells its technologies and services through direct sales force, service teams, and strategic alliances to integrated device manufacturers, fabless semiconductor companies, foundries, equipment manufacturers, electronics manufacturing suppliers, original device manufacturers, out-sourced semiconductor assembly and test, and system houses. The company was founded in 1991 and is headquartered in Santa Clara, California.
How the Company Makes MoneyPDF Solutions generates revenue primarily through licensing its software platforms and providing professional services. Key revenue streams include software licensing fees, which are often structured as subscriptions, and fees for consulting services that aid clients in deploying and leveraging PDF's analytics solutions to improve manufacturing processes. The company also engages in long-term contracts and has strategic partnerships with major players in the semiconductor industry, which contribute to its revenue by providing consistent business opportunities and expanding its market reach.

PDF Solutions Earnings Call Summary

Earnings Call Date:May 08, 2025
(Q1-2025)
|
% Change Since: 11.58%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Positive
The earnings call reflects a positive outlook for PDF Solutions, with strong revenue growth, successful acquisition integration, and increased enterprise adoption. However, there are concerns about cash reserves and debt levels, as well as a slowdown in analytics revenue growth.
Q1-2025 Updates
Positive Updates
Strong Start to Fiscal Year 2025
The first quarter of 2025 was the second largest revenue quarter in PDF Solutions' history, driven by significant bookings primarily for enterprise-wide solutions.
Revenue Growth and Financial Performance
Total revenues for Q1 2025 were $47.8 million, up 16% year-over-year. The company's gross margin increased to 77% from 72% in the same quarter last year.
Acquisition of SecureWise
PDF Solutions completed a $130 million acquisition of SecureWise, expected to be accretive to earnings and operating margins.
Sapiens Manufacturing Hub Success
The Sapiens Manufacturing Hub Enterprise platform secured a large contract, reflecting strong enterprise adoption.
Net Income and Earnings Per Share Growth
Net income for the quarter increased to $8.1 million, or 21¢ per share, representing a 40% year-over-year increase.
Negative Updates
Cash and Debt Position
Cash, cash equivalents, and short-term investments decreased to $54 million from $115 million in the prior quarter, primarily due to the SecureWise acquisition and investment in Eprobe machines. The company also took on $70 million in bank debt.
Analytics Revenue Growth Slows
Analytics revenue grew by only 10% year-over-year, which is a deceleration compared to previous growth rates.
Potential Tariff Impacts
Tariffs could impact the cost of components shipped into the US for the EProbe, although the financial impact is expected to be modest.
Company Guidance
During the PDF Solutions, Inc. conference call, the company provided guidance for 2025 with an anticipated revenue growth of 21% to 23% compared to 2024. The first quarter of 2025 marked a strong start, being the second-largest revenue quarter in the company's history, driven by significant bookings for enterprise-wide solutions and the Sapiens Manufacturing Hub Enterprise. Analytics revenue increased by 10% year-over-year, while IYR revenue surged by 86%. The gross margin improved to 77%, up from 72% in the previous quarter, and the operating margin remained at 18%. The company completed the $130 million SecureWise acquisition, contributing to its growth strategy. Despite macroeconomic uncertainties, PDF Solutions expects continued revenue growth, underpinned by strong demand for advanced node capabilities and AI-driven innovations.

PDF Solutions Financial Statement Overview

Summary
PDF Solutions shows strong revenue growth and gross margin improvements, but faces challenges with profitability, fluctuating net income margins, and negative free cash flow. The balance sheet is strong with a solid equity base and manageable debt levels.
Income Statement
75
Positive
PDF Solutions has demonstrated consistent revenue growth, with a notable increase of 24.9% from 2020 to 2021 and continued growth through 2025. The gross profit margin has improved significantly, reaching 71% in TTM 2025 from 58% in 2020, indicating strong cost management. However, profitability remains a concern with fluctuating net income margins and negative EBIT margins in recent periods.
Balance Sheet
70
Positive
The company's balance sheet shows a robust equity ratio of 63.8% in TTM 2025, suggesting financial stability. The debt-to-equity ratio is moderate at 0.30, indicating manageable leverage. However, the return on equity has been modest, with a TTM ROE of 1.71%, indicating room for improvement in utilizing equity effectively.
Cash Flow
65
Positive
Operating cash flow has improved over the years, with a notable increase in TTM 2025. However, free cash flow remains negative due to significant capital expenditures. The operating cash flow to net income ratio is strong at 4.74 in TTM 2025, indicating healthy cash generation relative to net income.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue185.93M179.47M165.84M148.55M111.06M88.05M
Gross Profit132.10M125.32M114.09M100.64M66.87M51.28M
EBITDA7.87M7.79M8.39M6.92M-6.26M-9.89M
Net Income4.27M4.06M3.10M-3.43M-21.49M-40.36M
Balance Sheet
Total Assets232.69M315.29M290.14M278.67M273.77M287.58M
Cash, Cash Equivalents and Short-Term Investments90.42M114.89M135.52M139.18M140.23M145.30M
Total Debt10.38M5.18M6.19M7.34M7.02M8.44M
Total Liabilities35.34M69.25M61.19M68.66M54.18M53.07M
Stockholders Equity197.35M246.04M228.95M210.01M219.59M234.51M
Cash Flow
Free Cash Flow-3.40M-7.45M3.13M23.72M190.00K14.81M
Operating Cash Flow20.20M9.70M14.60M32.30M4.24M21.78M
Investing Cash Flow-127.16M-5.94M-28.99M84.60M-4.67M-150.50M
Financing Cash Flow65.48M-11.23M-5.89M-24.31M-5.53M64.80M

PDF Solutions Technical Analysis

Technical Analysis Sentiment
Positive
Last Price21.87
Price Trends
50DMA
19.28
Positive
100DMA
20.33
Positive
200DMA
24.95
Negative
Market Momentum
MACD
0.63
Negative
RSI
67.51
Neutral
STOCH
87.82
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PDFS, the sentiment is Positive. The current price of 21.87 is above the 20-day moving average (MA) of 20.13, above the 50-day MA of 19.28, and below the 200-day MA of 24.95, indicating a neutral trend. The MACD of 0.63 indicates Negative momentum. The RSI at 67.51 is Neutral, neither overbought nor oversold. The STOCH value of 87.82 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PDFS.

PDF Solutions Risk Analysis

PDF Solutions disclosed 33 risk factors in its most recent earnings report. PDF Solutions reported the most risks in the "Tech & Innovation" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

PDF Solutions Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
67
Neutral
$827.80M590.610.60%11.75%-40.76%
67
Neutral
$1.25B75.95%-6.81%85.11%
DSDSP
65
Neutral
$831.51M439.534.15%30.64%
65
Neutral
$812.14M-9.00%9.30%24.96%
PRPRO
64
Neutral
$772.82M29.80%7.97%74.22%
63
Neutral
$33.22B5.73-11.55%1.90%5.54%-20.14%
55
Neutral
$618.75M-42.20%19.58%6.58%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
PDFS
PDF Solutions
21.87
-14.20
-39.37%
PRO
PROS Holdings
16.15
-10.88
-40.25%
PRCH
Porch Group
12.09
10.37
602.91%
DSP
Viant Technology
13.31
2.97
28.72%
RSKD
Riskified
5.07
-1.48
-22.60%
WEAV
Weave Communications
8.36
-0.71
-7.83%

PDF Solutions Corporate Events

Shareholder MeetingsBusiness Operations and Strategy
PDF Solutions Approves Key Proposals at Annual Meeting
Positive
Jun 23, 2025

On June 17, 2025, PDF Solutions held its Annual Meeting of Stockholders where all director nominees were elected, and several key proposals were approved. These included the ratification of BPM LLP as the independent accounting firm for 2025, amendments to the stock incentive and employee stock purchase plans, and a non-binding advisory vote on executive compensation. These approvals reflect the company’s strategic focus on enhancing its governance and compensation structures, potentially impacting its operational efficiency and stakeholder confidence.

The most recent analyst rating on (PDFS) stock is a Buy with a $45.00 price target. To see the full list of analyst forecasts on PDF Solutions stock, see the PDFS Stock Forecast page.

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.Date of analysis: Jun 24, 2025