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Sequans Communications S (SQNS)
:SQNS
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Sequans Communications S A
(NYSE:SQNS)
Rating:53Neutral
Price Target:
$2.00
▲(3.63%Upside)
Sequans Communications S A (SQNS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$48.49M
Dividend YieldN/A
Average Volume (3M)49.77K
Price to Earnings (P/E)―
Beta (1Y)0.52
Revenue Growth39.81%
EPS GrowthN/A
CountryUS
Employees155
SectorTechnology
Sector Strength82
IndustrySemiconductors
Share Statistics
EPS (TTM)-0.24
Shares Outstanding25,387,527
10 Day Avg. Volume63,998
30 Day Avg. Volume49,771
Financial Highlights & Ratios
PEG Ratio2.64
Price to Book (P/B)728.17
Price to Sales (P/S)0.00
P/FCF Ratio-62.53
Enterprise Value/Market Cap32.82
Enterprise Value/Revenue11.84
Enterprise Value/Gross Profit58.93
Enterprise Value/Ebitda7.91
Forecast
1Y Price Target
$7.50Price Target Upside288.60% 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 Earnings Call Summary
Earnings Call Date:May 06, 2025
(Q1-2025)
| % Change Since: 1.58%|
Next Earnings Date:Aug 05, 2025
Earnings Call Sentiment Neutral
Sequans Communications showed significant revenue growth year-over-year and advancements in their technology and design-win pipeline. However, the company faced challenges with sequential revenue decline, operating losses, and decreased gross margins. Despite these challenges, the company's strategic advancements and financial management indicate potential for future improvement.Q1-2025 Updates
Positive Updates
Revenue Growth
First quarter 2025 revenue increased 34% to $8.1 million compared to the first quarter of 2024, driven by a 42% increase in product revenue.
Monarch 2 and Calliope 2 Progress
Monarch 2 remains a key driver of revenue growth with new projects in pilot rollout. Calliope 2 shipments began and are expected to ramp through the second half of 2025.
Design-Win Pipeline
A strong design-win pipeline with approximately $480 million in potential revenue, with $250 million already in the design-win phase.
5G RedCap and eRedCap Roadmap
ACP acquisition accelerated the 5G eRedCap roadmap by 18 months, with next-generation chips expected to contribute to revenue in late 2027.
Cash Management and Financial Position
Cash and short-term deposits totaled $45.9 million at the end of Q1, with no need for an equity raise in 2025 or 2026.
Negative Updates
Sequential Revenue Decline
Sequential revenue declined by 27%, and product revenue declined 26% due to a large customer shipment in Q4 that did not repeat in Q1.
Operating Loss
IFRS operating loss was $6.8 million in the quarter, compared to a loss of $5.6 million in Q4 2024.
Gross Margin Decrease
Gross margin decreased to 64.5% from 67.4% in the prior quarter due to the mix of revenues and higher costs during the Calliope 2 product introduction phase.
Non-Recurring Cash Burn
Several non-operating items resulted in approximately $9 million cash burn in the first quarter.
Company Guidance
During the Sequans Communications First Quarter 2025 Financial Results Conference call, the company provided guidance on its strategic priorities and financial outlook. Sequans reported a first-quarter revenue of $8.1 million, exceeding their guidance benchmark, with product revenue at $3.5 million, marking a 42% increase compared to Q1 2024. The total pipeline is estimated at approximately $480 million, with $250 million in the design-win phase. The company anticipates revenue growth with several design-win projects moving into production, expecting around 50% of the design-win pipeline to generate revenue by the end of 2025. Sequans plans to launch Monarch 3 and Calliope 3 chips by the end of 2026 to enhance cost structure and power consumption, supporting the 5G eRedCap modem category. The company targets operating income break-even in 2026, aiming to reduce cash burn to below $5 million per quarter by the end of 2025, while managing cash operating expenses under $10 million per quarter. The guidance also highlighted the potential impact of new U.S. tariffs, though no direct effect on business is currently observed.Sequans Communications S A Financial Statement Overview
Summary
Sequans Communications exhibits positive revenue growth and a strong gross profit margin, indicating effective cost management. However, inconsistencies in EBIT and EBITDA margins and ongoing cash flow challenges indicate areas that need improvement. The balance sheet shows moderate strength with improved equity and a better debt-to-equity ratio. Although the cash flow statements highlight liquidity issues, there are signs of improvement, particularly in free cash flow growth.Income Statement
Sequans Communications shows a positive trend in revenue growth, with TTM revenues up compared to previous periods. The gross profit margin is strong, indicating effective cost management. However, there are concerns about volatility in EBIT and EBITDA margins, suggesting inconsistency in operational efficiency. Overall, net profit margins have improved, moving from losses to profitability, a significant positive turnaround.62
Positive
Balance Sheet
The company's balance sheet reflects a moderate financial position with an improving equity base. The debt-to-equity ratio improved significantly due to increased equity, although past high leverage might still pose a risk. The equity ratio has turned positive, showcasing a healthier capital structure. Return on equity is positive for TTM, indicating profitability, but fluctuations in past equity figures highlight a need for cautious financial management.55
Neutral
Cash Flow
Sequans Communications faces challenges with negative free cash flow and operating cash flow, suggesting liquidity issues. The operating cash flow to net income ratio is unfavorable, indicating the company struggles to convert net income into actual cash. Despite these challenges, significant improvements in free cash flow growth are noted, but consistency remains a concern.48
Neutral
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 38.79M | 36.76M | 33.62M | 60.55M | 50.88M | 50.92M | Gross Profit |
| 27.01M | 27.77M | 24.14M | 42.88M | 27.19M | 23.45M | EBIT |
| 71.11M | 69.53M | -29.84M | -3.84M | -18.32M | -24.69M | EBITDA |
| 77.33M | 37.46M | -15.91M | 11.83M | -4.41M | -34.38M | Net Income Common Stockholders |
| 61.45M | 57.04M | -40.99M | -9.01M | -20.28M | -54.48M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 45.95M | 62.09M | 5.71M | 5.67M | 4.83M | 7.57M | Total Assets |
| 97.58M | 105.26M | 109.17M | 98.75M | 89.56M | 87.32M | Total Debt |
| 11.00M | 5.38M | 80.69M | 65.14M | 66.07M | 69.42M | Net Debt |
| -951.00K | -3.71M | 74.98M | 59.47M | 61.24M | 61.85M | Total Liabilities |
| 48.30M | 50.08M | 115.24M | 96.65M | 113.87M | 124.45M | Stockholders Equity |
| 49.28M | 55.18M | -6.07M | 2.10M | -24.31M | -37.13M |
| Cash Flow | Free Cash Flow | ||||
| -35.30M | -39.26M | -36.83M | -24.50M | -37.38M | -33.16M | Operating Cash Flow |
| -25.65M | -19.37M | -7.26M | -1.84M | -8.76M | -19.39M | Investing Cash Flow |
| 122.27M | 93.69M | -24.44M | -26.05M | -19.37M | -24.76M | Financing Cash Flow |
| -85.01M | -70.79M | 31.74M | 28.71M | 25.38M | 37.62M |
Sequans Communications S A Technical Analysis
Neutral
1.93
Price Trends
1.85
Positive
2.17
Negative
2.49
Negative
Market Momentum
0.02
Negative
53.26
Neutral
74.77
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 1.93 is above the 20-day moving average (MA) of 1.85, above the 50-day MA of 1.85, and below the 200-day MA of 2.49, indicating a neutral trend. The MACD of 0.02 indicates Negative momentum. The RSI at 53.26 is Neutral, neither overbought nor oversold. The STOCH value of 74.77 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 2 New Risks
1.
We are not in compliance with the Continued Listing Criteria of the New York Stock Exchange (NYSE), and our failure to regain compliance may result in the delisting of our ADSs. Q4, 2023
2.
We need to enter into a strategic transaction or raise significant equity or debt financing in the near term. If we fail to do so, we may be unable to continue to operate our business and may need to seek a court ordered restructuring. Q4, 2023
Sequans Communications S A Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
62 Neutral | $11.95B | 9.93 | -7.21% | 4.85% | 7.32% | -8.25% | |
53 Neutral | $48.49M | ― | 378.21% | ― | 39.81% | ― | |
52 Neutral | $81.16M | ― | -33.15% | ― | -5.73% | 47.83% | |
51 Neutral | $70.96M | ― | -51.84% | ― | -61.52% | 35.64% | |
45 Neutral | $74.06M | ― | 17.45% | ― | 94.76% | -146.39% | |
42 Neutral | $42.22M | ― | -1839.64% | ― | ― | ― | |
41 Neutral | $35.31M | ― | -2911.20% | ― | -47.93% | -37.78% |
* Technology Sector Average
Performance Comparison
SQNS
Sequans Communications S A
1.93
0.68
54.40%
GSIT
GSI Technology
3.08
0.43
16.23%
PXLW
Pixelworks
9.58
-1.74
-15.37%
WKEY
WISeKey International Holding
6.29
4.15
193.93%
MOBX
Mobix Labs
0.71
-1.07
-60.11%
GCTS
GCT Semiconductor Holding
1.46
-4.12
-73.84%
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.