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Pixelworks (PXLW)
:PXLW

Pixelworks (PXLW) AI Stock Analysis

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Pixelworks

(NASDAQ:PXLW)

Rating:43Neutral
Price Target:
$6.50
▼(-4.69%Downside)
Pixelworks is under significant financial pressure, with a poor financial performance being the most impactful factor. Technical indicators and valuation offer little support, and earnings call insights highlight ongoing challenges despite some strategic efforts.
Positive Factors
New Partnerships
TrueCut is in active discussions with three major device brands, signaling potential new partnerships.
Strategic Decisions
The Shanghai subsidiary's strategic process has multiple interested parties, indicating the potential for a beneficial strategic decision.
Negative Factors
Gross Margin Challenges
The new projector SoC is experiencing growing pains with packaging yields challenged, leading to lower gross margin estimates.
Guidance and Market Recovery
Pixelworks delivered results at the low end of the range and guided the topline lower as the mobile market recovers more slowly.

Pixelworks (PXLW) vs. SPDR S&P 500 ETF (SPY)

Pixelworks Business Overview & Revenue Model

Company DescriptionPixelworks, Inc. (PXLW) is a technology company that specializes in the design and development of innovative visual display processing solutions. The company operates within the semiconductor sector and focuses on delivering advanced video and pixel processing technology. Pixelworks provides its technology to a range of industries, including consumer electronics, professional displays, and video streaming services. Its core products include video display processors, transcoders, and software solutions that enhance the visual experience across various devices.
How the Company Makes MoneyPixelworks generates revenue primarily through the sale of its semiconductor products and technology licensing. The company sells its display processing chips to original equipment manufacturers (OEMs) and original design manufacturers (ODMs) who integrate these chips into consumer electronics such as televisions, smartphones, and projectors. Additionally, Pixelworks licenses its video processing technology to other companies, enabling them to incorporate advanced visual processing capabilities into their own products. Significant partnerships with major consumer electronics brands and video streaming services also contribute to Pixelworks' revenue, as these collaborations often lead to increased sales and licensing opportunities.

Pixelworks Earnings Call Summary

Earnings Call Date:May 13, 2025
(Q1-2025)
|
% Change Since: -3.54%|
Next Earnings Date:Aug 12, 2025
Earnings Call Sentiment Negative
The earnings call presented a mixed picture with notable achievements in cost reduction and strategic partnerships, particularly with the TrueCut Motion platform. However, these were overshadowed by significant declines in revenue, gross profit margin, and cash reserves, along with an increased net loss.
Q1-2025 Updates
Positive Updates
Cost Reduction Success
First quarter operating expenses decreased by over $2 million year-over-year, with further reductions expected to lead to a total decrease of approximately $10 million for the full year of 2025.
TrueCut Motion Platform Expansion
Pixelworks is targeting to double the number of TrueCut Motion titles year-over-year from 5 in 2024 to 10 in 2025 and has secured strategic partnerships to enhance the platform's adoption.
Mobile Revenue Growth
Sequential growth in mobile revenue was reported, driven by shipments of visual processors for previously launched smartphone models.
Strategic Partnerships and Ecosystem Growth
Pixelworks entered a strategic partnership with a market-leading post-production company to expand the TrueCut Motion ecosystem and started deeper engagements with leading device companies for certification.
Negative Updates
Significant Revenue Decline
Total revenue for the first quarter of 2025 was $7.1 million, down from $9.1 million in the previous quarter and $16.1 million in the first quarter of 2024.
Negative Gross Profit Margin Trend
Non-GAAP gross profit margin decreased to 49.9% in the first quarter from 54.8% in the previous quarter, primarily due to a shift in product mix and lower overhead absorption.
Increased Net Loss
First quarter net loss was $6.5 million, compared to a net loss of $4.3 million in the prior quarter and $4 million in the first quarter of 2024.
Cash and Cash Equivalents Decrease
Cash and cash equivalents decreased to $18.5 million at the end of the first quarter, down from $23.6 million at the end of the fourth quarter.
Company Guidance
During the Pixelworks, Inc. First Quarter 2025 Earnings Conference Call held on May 13, 2025, the company provided guidance for the second quarter of 2025. Revenue is expected to be between $8 million and $9 million, with a non-GAAP gross profit margin anticipated to range from 41% to 43%. The company also projects second-quarter operating expenses to be between $9 million and $10 million on a non-GAAP basis. Additionally, the non-GAAP EPS is expected to range between a loss of $0.11 per share and a loss of $0.08 per share. Pixelworks aims to continue reducing its cost structure, with a total year-over-year decrease in operating expenses anticipated to be approximately $10 million for the full year of 2025. The company is also targeting profitability for its Pixelworks Shanghai subsidiary in the second half of 2025.

Pixelworks Financial Statement Overview

Summary
Pixelworks is experiencing severe financial distress, with declining revenues, negative profitability margins, and a deteriorating balance sheet with negative equity. Cash flow management is also problematic, reflecting the company's struggle to generate sufficient cash from operations.
Income Statement
40
Negative
Pixelworks has been experiencing declining revenue over the years, with a notable drop in Total Revenue for the TTM (Trailing-Twelve-Months) period compared to previous years. The company has a negative Gross Profit Margin and Net Profit Margin, indicating operational inefficiencies and consistent losses. There is a significant negative EBIT and EBITDA margin, further reflecting the challenges in achieving profitability.
Balance Sheet
30
Negative
The balance sheet reveals high financial risk with a negative Stockholders' Equity, suggesting that liabilities exceed assets and shareholder value is eroded. The Debt-to-Equity ratio is not calculable due to negative equity, but the overall financial position is weak with declining asset base and increasing liabilities.
Cash Flow
35
Negative
Operating Cash Flow is negative, indicating that the company is not generating enough cash to sustain operations from its core activities. The Free Cash Flow is also negative and has worsened over time, highlighting cash management issues. The ratios of Operating and Free Cash Flow to Net Income are not meaningful due to negative figures, showcasing cash flow challenges.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue34.25M43.21M59.68M70.15M55.10M40.85M
Gross Profit17.64M22.29M25.71M35.88M27.69M20.18M
EBITDA-29.38M-25.21M-22.27M-11.32M-15.24M-20.46M
Net Income-31.41M-28.72M-26.18M-15.23M-19.41M-26.53M
Balance Sheet
Total Assets58.46M64.07M95.97M102.32M106.60M72.04M
Cash, Cash Equivalents and Short-Term Investments18.50M23.65M47.54M56.82M61.59M31.51M
Total Debt1.12M3.49M4.95M3.54M2.85M5.09M
Total Liabilities24.00M24.19M30.96M30.07M35.47M19.17M
Stockholders Equity-15.97M-10.57M12.54M32.42M40.22M52.87M
Cash Flow
Free Cash Flow-29.10M-23.57M-22.80M-15.84M-12.63M-6.50M
Operating Cash Flow-25.71M-19.81M-18.81M-12.83M-9.16M-3.71M
Investing Cash Flow-2.75M-3.12M-3.99M-3.01M-3.23M3.94M
Financing Cash Flow769.00K-971.00K13.53M11.07M42.71M23.77M

Pixelworks Technical Analysis

Technical Analysis Sentiment
Positive
Last Price6.82
Price Trends
50DMA
6.38
Positive
100DMA
7.32
Negative
200DMA
8.23
Negative
Market Momentum
MACD
0.29
Negative
RSI
54.25
Neutral
STOCH
26.89
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PXLW, the sentiment is Positive. The current price of 6.82 is above the 20-day moving average (MA) of 6.50, above the 50-day MA of 6.38, and below the 200-day MA of 8.23, indicating a neutral trend. The MACD of 0.29 indicates Negative momentum. The RSI at 54.25 is Neutral, neither overbought nor oversold. The STOCH value of 26.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PXLW.

Pixelworks Risk Analysis

Pixelworks disclosed 59 risk factors in its most recent earnings report. Pixelworks reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Pixelworks Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
63
Neutral
$33.22B5.73-11.55%1.90%5.54%-20.14%
54
Neutral
$91.66M-9.50%21.44%-8.49%
54
Neutral
$36.81M378.21%39.81%
51
Neutral
$63.70M40.38-47.90%-16.52%-46.13%
51
Neutral
$70.70M-51.84%-61.52%35.64%
47
Neutral
$20.42M-31.27%160.76%74.71%
43
Neutral
$35.78M-2911.20%-47.93%-37.78%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
PXLW
Pixelworks
7.17
-4.04
-36.04%
ASYS
Amtech Systems
4.53
-1.96
-30.20%
AXTI
AXT
2.08
-1.21
-36.78%
LEDS
SemiLEDs
2.55
1.21
90.30%
SQNS
Sequans Communications S A
1.44
0.07
5.11%
WKEY
WISeKey International Holding
6.68
4.45
199.55%

Pixelworks Corporate Events

Shareholder MeetingsStock SplitBusiness Operations and Strategy
Pixelworks Approves Reverse Stock Split at Shareholder Meeting
Neutral
May 30, 2025

On May 23, 2025, Pixelworks, Inc. held its Annual Meeting of Shareholders, where several key proposals were voted on. The shareholders approved a reverse stock split at a ratio of 1-for-12, effective June 6, 2025, impacting the company’s stock trading on Nasdaq. Additionally, amendments to increase shares for the stock incentive plan and executive compensation were approved, along with the appointment of Grant Thornton LLP as the independent auditor. These decisions reflect strategic adjustments to enhance shareholder value and streamline corporate governance.

The most recent analyst rating on (PXLW) stock is a Buy with a $1.50 price target. To see the full list of analyst forecasts on Pixelworks stock, see the PXLW 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: Jul 02, 2025