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Sequans Communications S A (SQNS)
NYSE:SQNS
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Sequans Communications S A
(NYSE:SQNS)
56Neutral
Sequans Communications S A (SQNS) vs. S&P 500 (SPY)
Market Cap
$48.27M
Dividend YieldN/A
Average Volume (3M)60.57K
Price to Earnings (P/E)―
Beta (1Y)0.32
Revenue Growth9.36%
EPS GrowthN/A
CountryUS
Employees264
SectorTechnology
Sector Strength45
IndustrySemiconductors
Share Statistics
EPS (TTM)-0.08
Shares Outstanding25,140,892
10 Day Avg. Volume38,478
30 Day Avg. Volume60,566
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.72
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$7.50Price Target Upside278.79% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Sequans Communications S A Business Overview & Revenue Model
Company DescriptionSequans Communications S.A. (SQNS) is a leading developer and provider of 4G and 5G semiconductor solutions for broadband, critical communications, and massive IoT markets. Founded in 2003 and headquartered in Paris, France, Sequans specializes in designing and delivering chipsets that enable wireless connectivity for devices in sectors such as telecommunications, automotive, and consumer electronics. The company is recognized for its expertise in LTE and 5G technologies, providing innovative solutions that help drive the expansion of connected devices globally.
How the Company Makes MoneySequans Communications generates revenue primarily through the sale of its semiconductor solutions, which are integrated into a variety of devices requiring wireless connectivity. The company's key revenue streams include direct sales of chipsets to original equipment manufacturers (OEMs) and module makers, as well as licensing its technology and intellectual property to partners. Additionally, Sequans engages in strategic partnerships with major tech companies and network operators to expand its market reach and enhance its product offerings. These collaborations can lead to increased sales volume and the adoption of Sequans' technology in emerging markets and applications, contributing significantly to its earnings.
Sequans Communications S A Financial Statement Overview
Summary
Sequans Communications S A has shown improvements in profitability, transitioning to a positive net income and improved gross profit margin. Balance sheet strength is evident with positive stockholders' equity and improved debt-to-equity ratio, although revenue and cash flow challenges persist.Income Statement
Sequans Communications S A showed a significant turnaround in profitability with net income rising from a negative $40.99 million in 2023 to a positive $57.04 million in 2024. Gross profit margin has improved to 75.56% in 2024 from 71.84% in 2023, and the net profit margin increased substantially. However, revenue growth remains a concern, showing a decrease from $60.55 million in 2022 to $36.76 million in 2024, indicating a declining trend over the years.65
Positive
Balance Sheet
The balance sheet of Sequans Communications S A indicates a healthier position in 2024 with positive stockholders' equity of $55.18 million, compared to negative equity in previous years. The debt-to-equity ratio improved significantly, reflecting better leverage management. However, the equity ratio at 52.43% indicates moderate reliance on external financing, and total assets have slightly declined over the years.55
Neutral
Cash Flow
The cash flow statement reveals challenges in cash management, with a negative free cash flow of $22.69 million in 2024, though improved from $36.83 million in 2023. Operating cash flow remains negative, indicating ongoing operational cash constraints, while significant investing cash flow in 2024 suggests asset divestment or investment changes.50
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 36.76M | 33.62M | 60.55M | 50.88M | 50.92M | Gross Profit |
| 27.77M | 24.14M | 42.88M | 27.19M | 23.45M | EBIT |
| 69.53M | -29.84M | -3.84M | -18.32M | -24.69M | EBITDA |
| 37.46M | -15.91M | 11.83M | -4.41M | -34.38M | Net Income Common Stockholders |
| 57.04M | -40.99M | -9.01M | -20.28M | -54.48M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 62.09M | 5.71M | 5.67M | 4.83M | 7.57M | Total Assets |
| 105.26M | 109.17M | 98.75M | 89.56M | 87.32M | Total Debt |
| 5.38M | 80.69M | 65.14M | 66.07M | 69.42M | Net Debt |
| -3.71M | 74.98M | 59.47M | 61.24M | 61.85M | Total Liabilities |
| 50.08M | 115.24M | 96.65M | 113.87M | 124.45M | Stockholders Equity |
| 55.18M | -6.07M | 2.10M | -24.31M | -37.13M |
| Cash Flow | Free Cash Flow | |||
| -22.69M | -36.83M | -24.50M | -37.38M | -33.16M | Operating Cash Flow |
| -19.37M | -7.26M | -1.84M | -8.76M | -19.39M | Investing Cash Flow |
| 93.70M | -24.44M | -26.05M | -19.37M | -24.76M | Financing Cash Flow |
| -70.94M | 31.74M | 28.71M | 25.38M | 37.62M |
Sequans Communications S A Technical Analysis
Neutral
1.98
Price Trends
2.20
Negative
2.69
Negative
2.42
Negative
Market Momentum
-0.10
Negative
44.07
Neutral
62.81
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SQNS, the sentiment is Neutral. The current price of 1.98 is above the 20-day moving average (MA) of 1.97, below the 50-day MA of 2.20, and below the 200-day MA of 2.42, indicating a neutral trend. The MACD of -0.10 indicates Negative momentum. The RSI at 44.07 is Neutral, neither overbought nor oversold. The STOCH value of 62.81 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SQNS.
Sequans Communications S A Risk Analysis
Sequans Communications S A disclosed 57 risk factors in its most recent earnings report. Sequans Communications S A 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
Sequans Communications S A Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
59 Neutral | $10.59B | 10.09 | -6.37% | 3.05% | 7.44% | -10.67% | |
56 Neutral | $48.27M | ― | 231.78% | ― | 9.36% | ― | |
53 Neutral | $67.08M | ― | -36.62% | ― | -10.03% | 36.54% | |
46 Neutral | $44.66M | ― | -51.84% | ― | -61.52% | 35.64% | |
44 Neutral | $33.74M | ― | -2911.20% | ― | -27.60% | -5.44% | |
38 Underperform | $32.65M | ― | -6250.04% | ― | ― | ― | |
31 Underperform | $69.47M | ― | 17.45% | ― | ― | -58.40% |
* Technology Sector Average
Performance Comparison
SQNS
Sequans Communications S A
1.98
0.70
54.69%
GSIT
GSI Technology
3.00
-0.54
-15.25%
PXLW
Pixelworks
0.58
-1.12
-65.88%
WKEY
WISeKey International Holding
3.85
1.84
91.54%
MOBX
Mobix Labs
0.75
-1.87
-71.37%
GCTS
GCT Semiconductor Holding
1.44
-3.27
-69.43%
Sequans Communications S A Earnings Call Summary
Earnings Call Date: Feb 11, 2025 | % Change Since: -34.44% | Next Earnings Date: May 6, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant achievements, including the Qualcomm deal, increased revenue, and strong financial performance. However, challenges such as a decline in licensing revenue and a Q4 operating loss were noted. The overall sentiment is cautiously optimistic with a focus on future growth and profitability.Highlights
Successful Qualcomm Deal
The completion of a $200 million deal with Qualcomm significantly improved Sequans' financial position, doubled product revenue in Q4 compared to the previous quarter, and validated their technology leadership.
Revenue Growth
Total revenue for 2024 increased by 9% from $33.6 million in 2023 to $36.8 million, with Q4 revenues up 130% to $11 million compared to Q4 2023.
Strong Gross Margin
Gross margin for 2024 was 75.5%, up from 71.8% in 2023, and product gross margin increased to 35.1% from 6.2% in 2023.
Design Win Pipeline
Sequans' design win pipeline represents around $250 million of future revenue, with strong customer commitment in segments like smart metering.
Net Profit Achievement
Achieved a non-IFRS net profit of $77.5 million in 2024, compared to a non-IFRS net loss of $30.6 million in 2023, driven by the Qualcomm transaction.
Lowlights
Licensing Revenue Decline
Licensing and other revenue declined by 19% in Q4 2024 compared to Q3 2024.
Operating Loss in Q4
Reported an IFRS operating loss of $5.3 million in Q4 2024, compared to an operating profit of $87.1 million in Q3 2024.
Product Revenue Contribution
Product revenue accounted for 43% of total revenues in Q4 2024, down from 83% in Q4 2023.
Inventory Provisions
Inventory provisions were made for two products approaching end of life, impacting product gross margin.
Company Guidance
During the fourth quarter of 2024, Sequans Communications demonstrated significant resilience and growth, achieving a total revenue of $11 million, marking a 9% sequential increase. A pivotal highlight was the successful $200 million transaction with Qualcomm, which bolstered the company's financial position and doubled its product revenue to $4.7 million from $2.4 million in the prior quarter. The year concluded with an overall revenue increase of 9% to $36.8 million and a substantial improvement in product gross margin to 35.1%. Looking ahead, Sequans forecasts its design win pipeline, valued at approximately $250 million over three years, to drive sustained growth, with expectations of $60 million in average annual revenue from 2025 to 2028. The company projects continued revenue contributions from its expanding $200 million design-in pipeline and anticipates achieving non-IFRS operating income breakeven by 2026.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.