PDF Solutions (PDFS) AI Stock Analysis

• Market Cap: $1.15B
• Dividend Yield: N/A
• Average Volume (3M): 299.85K
• Price to Earnings (P/E): 1340.4
• Beta (1Y): 1.54
• Revenue Growth: 17.76%
• EPS Growth: N/A
• Country: US
• Employees: 539
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.19
• Shares Outstanding: 39,492,878
• 10 Day Avg. Volume: 212,142
• 30 Day Avg. Volume: 299,850
• 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: 0.76
• Enterprise Value/Revenue: 4.45
• Enterprise Value/Gross Profit: 6.25
• Enterprise Value/Ebitda: 97.94
• 1Y Price Target: $28.67
• Price Target Upside: -1.88% Downside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 67 Neutral
• Price Target: $22.00 ▼(-24.71% Downside)

PDF Solutions' stock score is driven by strong technical momentum and solid financial performance, despite valuation concerns. The company's robust revenue growth and strategic expansions in AI and analytics are positive indicators. However, the extremely high P/E ratio and lack of dividend yield suggest potential overvaluation, which tempers the overall score.

PDF Solutions Business Overview & Revenue Model

Company Description

PDF 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 Money

PDF Solutions generates revenue primarily through the sale of software licenses, subscription services, and consulting engagements. The company's core products include its Yield Management and Design for Manufacturability (DFM) solutions, which help semiconductor manufacturers enhance production efficiency and product reliability. Additionally, PDF Solutions earns revenue from long-term service agreements and maintenance contracts related to its software tools. Strategic partnerships with major semiconductor companies bolster its revenue streams, as these collaborations often lead to joint projects and expanded market reach. The company also benefits from a recurring revenue model through subscriptions for its software solutions, providing a steady income flow from existing customers.

PDF Solutions Financial Statement Overview

Summary

PDF Solutions shows strong revenue growth and improving gross margins but struggles with profitability and negative free cash flow. The balance sheet is stable with a solid equity base and manageable debt, yet returns on equity are modest. Operating cash flows are healthy, but capital expenditures impact free cash flow negatively.

Income Statement

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

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

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.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	196.00M	179.47M	165.84M	148.55M	111.06M	88.05M
Gross Profit	139.77M	125.32M	114.09M	100.64M	66.87M	51.28M
EBITDA	8.91M	7.79M	8.39M	6.92M	-6.26M	-8.62M
Net Income	3.71M	4.06M	3.10M	-3.43M	-21.49M	-40.36M
Balance Sheet
Total Assets	391.13M	315.29M	290.14M	278.67M	273.77M	287.58M
Cash, Cash Equivalents and Short-Term Investments	40.40M	114.89M	135.52M	139.18M	140.23M	145.30M
Total Debt	8.17M	5.18M	6.19M	7.34M	7.02M	8.44M
Total Liabilities	133.61M	69.25M	61.19M	68.66M	54.18M	53.07M
Stockholders Equity	257.52M	246.04M	228.95M	210.01M	219.59M	234.51M
Cash Flow
Free Cash Flow	-12.42M	-7.45M	3.13M	23.72M	190.00K	14.81M
Operating Cash Flow	14.31M	9.70M	14.60M	32.30M	4.24M	21.78M
Investing Cash Flow	-134.38M	-5.94M	-28.99M	84.60M	-4.67M	-150.50M
Financing Cash Flow	64.56M	-11.23M	-5.89M	-24.31M	-5.53M	64.80M

PDF Solutions Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 29.22
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: 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 29.22 is above the 20-day moving average (MA) of 27.22, above the 50-day MA of 23.75, and above the 200-day MA of 22.09, indicating a bullish trend. The MACD of 1.32 indicates Positive momentum. The RSI at 68.15 is Neutral, neither overbought nor oversold. The STOCH value of 88.97 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PDFS.

PDF Solutions Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VTEX	―	$804.28M	81.84	5.33%	―	4.51%	208.14%
PDFS	―	$1.15B	1,340.37	0.35%	―	17.76%	―
PRO	―	$1.11B	―	―	―	8.92%	60.34%
Sector *	―	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
SPT	―	$613.27M	―	-32.50%	―	14.79%	27.52%
RSKD	―	$744.98M	―	-10.16%	―	7.96%	5.67%
BMBL	―	$576.22M	―	-75.71%	―	-5.06%	-2318.18%

PDF Solutions Corporate Events

PDF Solutions Reports Strong Q2 Earnings and Positive Outlook

PDF Solutions’ recent earnings call conveyed a generally positive sentiment, underscored by robust revenue growth, particularly in analytics and the China market, alongside high gross margins and a favorable full-year outlook. Despite some concerns about declining revenue streams, increased operating expenses, and operating cash flow consumption, the overall sentiment was optimistic, highlighting the company’s strong performance and future potential.

PDF Solutions Reports Record Q2 2025 Revenues

PDF Solutions, Inc., headquartered in Santa Clara, California, is a prominent provider of data solutions for the semiconductor and electronics industries, offering products and services that enhance manufacturing efficiency and product quality through advanced analytics and machine learning.