PDF Solutions (PDFS) AI Stock Analysis

Compare

164 Followers

Top Page

PDF Solutions

(NASDAQ:PDFS)

Rating:65Neutral

Price Target:

$20.50

▲(6.49%Upside)

PDF Solutions' strong revenue growth and positive earnings call insights were offset by challenges in profitability, overvaluation concerns, and technical analysis indicating a potential bearish trend. The company's financial stability is supported by a strong balance sheet despite negative free cash flow.

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

Market Cap

$753.44M

Dividend YieldN/A

Average Volume (3M)211.03K

Price to Earnings (P/E)531.8

Beta (1Y)1.53

Revenue Growth11.75%

EPS Growth-40.76%

CountryUS

Employees539

SectorTechnology

Sector Strength83

IndustrySoftware - Application

Share Statistics

EPS (TTM)0.21

Shares Outstanding39,139,565

10 Day Avg. Volume187,202

30 Day Avg. Volume211,035

Financial Highlights & Ratios

PEG Ratio-20.48

Price to Book (P/B)3.02

Price to Sales (P/S)0.00

P/FCF Ratio-97.72

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$27.50

Price Target Upside42.86% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering3

PDF Solutions Business Overview & Revenue Model

Company DescriptionPDF Solutions, Inc. is a leading provider of comprehensive data analytics solutions designed to enhance the optimization and efficiency of semiconductor and electronics manufacturing processes. Operating within the technology and semiconductor sectors, the company's core offerings include software platforms, such as the Exensio® big data analytics platform, and professional services that help clients improve their yield, quality, and profitability. PDF Solutions serves a global clientele, including foundries, integrated device manufacturers, and fabless companies.

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: -1.79%|

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 has shown impressive revenue growth and improvement in profitability, with a strong balance sheet characterized by low leverage and a robust equity base. However, cash flow management remains an area for improvement due to fluctuating free cash flow.

Income Statement

Very Positive

PDF Solutions has shown strong revenue growth over the past few years, increasing from $88.05M in 2020 to $179.47M in 2024, with a significant increase in gross profit margin from 58.25% in 2020 to 69.83% in 2024. The net profit margin has improved from negative in previous years to 5.07% in 2024, indicating a turnaround in profitability. EBIT and EBITDA margins are still low, suggesting room for improvement in operational efficiency.

Balance Sheet

Positive

The company maintains a strong equity position, with an equity ratio of 78.03% in 2024, indicating financial stability. The debt-to-equity ratio remains low at 0.02, reflecting prudent financial management. The return on equity has improved to 3.70% in 2024, showing better utilization of shareholder funds, although there is potential for further enhancement.

Cash Flow

Positive

Free cash flow has fluctuated, with a shift from $3.13M in 2023 to negative $7.45M in 2024, raising concerns about cash generation. Operating cash flow to net income ratio is slightly above 1, indicating adequate cash generation relative to net income, but the free cash flow to net income ratio is negative, suggesting pressure on liquidity.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
179.47M	165.84M	148.55M	111.06M	88.05M
	Gross Profit
125.32M	114.09M	100.64M	66.87M	51.28M
	EBIT
1.83M	-1.13M	-2.09M	-12.63M	-16.79M
	EBITDA
7.79M	8.39M	6.92M	-6.26M	-9.89M
	Net Income Common Stockholders
4.06M	3.10M	-3.43M	-21.49M	-40.36M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
114.89M	135.52M	139.18M	140.23M	145.30M
	Total Assets
315.29M	290.14M	278.67M	273.77M	287.58M
	Total Debt
5.18M	6.19M	7.34M	7.02M	8.44M
	Net Debt
-85.42M	-92.79M	-112.28M	-20.67M	-21.87M
	Total Liabilities
69.25M	61.19M	68.66M	54.18M	53.07M
	Stockholders Equity
246.04M	228.95M	210.01M	219.59M	234.51M
Cash Flow		Free Cash Flow
-7.45M	3.13M	23.72M	190.00K	14.81M
	Operating Cash Flow
9.70M	14.60M	32.30M	4.24M	21.78M
	Investing Cash Flow
-5.94M	-28.99M	84.60M	-4.67M	-150.50M
	Financing Cash Flow
-11.23M	-5.89M	-24.31M	-5.53M	64.80M

PDF Solutions Technical Analysis

Technical Analysis Sentiment

Positive

Last Price19.25

Price Trends

50DMA

18.54

Positive

100DMA

21.45

Negative

200DMA

25.74

Negative

Market Momentum

MACD

-0.07

Negative

RSI

54.05

Neutral

STOCH

79.01

Neutral

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 19.25 is above the 20-day moving average (MA) of 18.93, above the 50-day MA of 18.54, and below the 200-day MA of 25.74, indicating a neutral trend. The MACD of -0.07 indicates Negative momentum. The RSI at 54.05 is Neutral, neither overbought nor oversold. The STOCH value of 79.01 is Neutral, 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 3 New Risks

Our significant research and development investment may nonetheless fail to keep pace with technological changes or ensure that our offerings meet market needs, which would adversely impact our business, financial condition, or results of operations. Q4, 2024

We and our third-party service providers are exposed to risks related to information technology infrastructure, information management and protection, cybersecurity threats, and cyber incidents; if we or our third-party providers fail to protect confidential information and/or experience a cyber incident, there may be damage to our brand and reputation, material financial penalties, and legal liability. Q4, 2024

Use of open-source software ("OSS") together with our products exposes us to potential legal liability and could negatively affect our ability to protect our intellectual property, and if support and updates for the OSS that we currently use in providing our products and services is not available to us, our financial results could be negatively impacted. Q4, 2024

PDF Solutions Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RSKD	71 Outperform	$821.75M	―	-9.00%	―	9.30%	24.96%
DSP	70 Outperform	$910.34M	483.39	4.15%	―	30.64%	―
PDFS	65 Neutral	$753.44M	531.77	0.60%	―	11.75%	-40.76%
PRCH	64 Neutral	$1.12B	―	75.95%	―	-6.81%	85.11%
PRO	63 Neutral	$915.42M	―	29.80%	―	7.97%	74.22%
WEAV	62 Neutral	$745.05M	―	-42.20%	―	19.58%	6.58%
Sector *	62 Neutral	$11.80B	10.37	-7.29%	2.91%	7.39%	-7.96%

* Technology Sector Average

Performance Comparison

PDFS

PDF Solutions

19.25

-14.94

-43.70%

PRO

PROS Holdings

19.13

-8.48

-30.71%

PRCH

Porch Group

10.86

9.02

490.22%

DSP

Viant Technology

14.55

5.32

57.64%

RSKD

Riskified

5.13

-1.07

-17.26%

WEAV

Weave Communications

9.91

0.90

9.99%

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.