Valens (VLN) AI Stock Analysis

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Valens

(NYSE:VLN)

47Neutral

Valens' overall stock score reflects significant financial and operational challenges, characterized by declining revenue, profitability issues, and negative cash flow. Bearish technical indicators and a negative P/E ratio signal investor caution. The company's strategic initiatives and strong balance sheet provide a potential path to recovery, but substantial risks remain.

Valens (VLN) vs. S&P 500 (SPY)

Market Cap

$212.49M

Dividend YieldN/A

Average Volume (3M)263.16K

Price to Earnings (P/E)―

Beta (1Y)0.94

Revenue Growth-31.25%

EPS Growth-79.47%

CountryUS

Employees256

SectorTechnology

Sector Strength40

IndustrySemiconductors

Share Statistics

EPS (TTM)-0.35

Shares Outstanding105,718,660

10 Day Avg. Volume327,591

30 Day Avg. Volume263,157

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)3.93

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

$3.67

Price Target Upside83.50% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering3

Valens Business Overview & Revenue Model

Company DescriptionValens Semiconductor Ltd. engages in the provision of semiconductor products that enables high-speed video and data transmission for the audio-video and automotive industries. It offers HDBaseT technology, which enables the simultaneous delivery of ultra-high-definition digital video and audio, Ethernet, USB, control signals, and power through a single long-reach cable. The company offers audio-video solutions for the enterprise, education, digital signage, medical and residential, and industrial markets; and automotive solutions, which provide chipsets that support advanced driver-assistance systems, automated driving systems, infotainment, telecommunications, and basic connectivity. It serves customers through distributors and representatives in Israel, China, Hong Kong, the United States, Mexico, Japan, and internationally. The company was incorporated in 2006 and is headquartered in Hod Hasharon, Israel.

How the Company Makes MoneyValens makes money primarily through the sale of its proprietary chipsets and related technologies to original equipment manufacturers (OEMs) and other companies in the automotive, audio-video, and industrial sectors. These products are integrated into end-user devices, facilitating high-speed data transfer and connectivity. Additionally, Valens may earn revenue through licensing agreements and partnerships with other technology companies, which can involve joint development projects or technology sharing that further leverages its core competencies.

Valens Financial Statement Overview

Summary

Valens faces significant challenges with declining revenue and profitability, as evidenced by negative revenue growth and net losses. While the balance sheet shows a strong equity position and low leverage, consistent losses and negative free cash flow highlight operational inefficiencies and financial instability. The company must focus on cost control and revenue recovery to enhance its financial standing.

Income Statement

Neutral

Valens experienced a decline in revenue and gross profit over the past year, with a significant decrease in total revenue from $84.16M in 2023 to $57.86M in 2024, leading to a negative revenue growth rate. The company also faced considerable net losses, with a net income of -$36.58M in 2024, causing a negative net profit margin. While the gross profit margin remains positive, the negative EBIT and EBITDA margins indicate operational challenges and a need for cost control.

Balance Sheet

Neutral

Valens maintains a strong equity position with stockholders' equity of $142.69M against total assets of $172.15M, resulting in an equity ratio of 82.89%. The debt-to-equity ratio is low at 0.05, indicating limited leverage and reduced financial risk. However, the company has been experiencing declining equity year-over-year, reflecting ongoing financial challenges. The ROE is negative due to net losses, highlighting profitability issues.

Cash Flow

Neutral

The cash flow situation at Valens shows some improvement in operating cash flow, from a negative $6.36M in 2023 to a positive $1.02M in 2024. However, free cash flow remains negative at -$0.85M. The operating cash flow to net income ratio is positive, suggesting better cash generation relative to its net losses. Despite these improvements, consistent negative free cash flow poses a concern for long-term sustainability.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
57.86M	84.16M	90.72M	70.68M	56.91M
	Gross Profit
34.28M	52.59M	63.39M	50.58M	43.48M
	EBIT
-41.34M	-26.92M	-28.37M	-27.07M	-22.79M
	EBITDA
-33.91M	-25.29M	-26.99M	-25.04M	-18.39M
	Net Income Common Stockholders
-36.58M	-19.66M	-27.68M	-26.54M	-19.65M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
130.96M	142.02M	148.39M	174.36M	61.57M
	Total Assets
172.15M	180.56M	195.66M	202.60M	79.17M
	Total Debt
7.62M	1.96M	3.44M	0.00	0.00
	Net Debt
-27.80M	-15.30M	-16.59M	-56.79M	-26.32M
	Total Liabilities
29.46M	16.25M	28.22M	20.40M	161.39M
	Stockholders Equity
142.69M	164.30M	167.44M	182.20M	-82.22M
Cash Flow		Free Cash Flow
-848.00K	-7.54M	-23.20M	-23.05M	-20.47M
	Operating Cash Flow
1.02M	-6.36M	-22.09M	-21.61M	-19.61M
	Investing Cash Flow
17.78M	1.35M	-11.73M	-84.16M	28.31M
	Financing Cash Flow
-155.00K	1.50M	822.00K	135.43M	406.00K

Valens Technical Analysis

Technical Analysis Sentiment

Negative

Last Price2.00

Price Trends

50DMA

2.22

Negative

100DMA

2.31

Negative

200DMA

2.29

Negative

Market Momentum

MACD

-0.07

Negative

RSI

41.81

Neutral

STOCH

29.26

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VLN, the sentiment is Negative. The current price of 2 is below the 20-day moving average (MA) of 2.05, below the 50-day MA of 2.22, and below the 200-day MA of 2.29, indicating a bearish trend. The MACD of -0.07 indicates Negative momentum. The RSI at 41.81 is Neutral, neither overbought nor oversold. The STOCH value of 29.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for VLN.

Valens Risk Analysis

Valens disclosed 62 risk factors in its most recent earnings report. Valens 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

Valens Peers Comparison

Overall Rating

UnderperformOutperform

Sector (57)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MTSI	75 Outperform	$7.92B	138.48	-9.49%	―	26.40%	-234.22%
CRNT	64 Neutral	$199.00M	7.57	16.02%	―	13.54%	278.70%
LSCC	62 Neutral	$6.39B	105.12	8.71%	―	-30.90%	-76.39%
MRVL	59 Neutral	$52.80B	―	-6.26%	0.39%	4.71%	5.57%
Sector *	57 Neutral	$20.24B	9.51	-13.28%	2.72%	5.43%	-24.54%
VLN	47 Neutral	$212.49M	―	-23.83%	―	-31.25%	-79.47%
AMBA	46 Neutral	$2.04B	―	-20.89%	―	25.78%	32.95%

* Technology Sector Average

Performance Comparison

VLN

Valens

2.00

-0.48

-19.35%

CRNT

Ceragon Networks

2.06

-1.03

-33.33%

LSCC

Lattice Semiconductor

42.18

-35.47

-45.68%

MTSI

MACOM Technology Solutions Holdings

99.27

-3.21

-3.13%

MRVL

Marvell

52.87

-18.51

-25.93%

AMBA

Ambarella

43.62

-4.13

-8.65%

Valens Earnings Call Summary

Earnings Call Date: Feb 26, 2025 | % Change Since: -10.71% | Next Earnings Date: May 7, 2025

Earnings Call Sentiment Neutral

Valens Semiconductor Ltd.'s earnings call highlighted some strategic advancements and financial achievements, such as new design wins in the automotive sector and strong balance sheet management. However, the call also revealed significant challenges, including a notable decline in revenue and increased operating losses, pointing to ongoing market difficulties and internal cost pressures.

Highlights

Automotive Industry Design Wins

Valens Semiconductor Ltd. announced three design wins in the automotive industry for ADAS platforms, providing a strong foothold for A-PHY within the OEM community.

Acquisition of AkerLane

Successfully completed the acquisition of AkerLane, which is expected to expand Valens' position in the industrial market with a holistic USB-focused offering.

Release of VS6320 Chipset

Introduced the VS6320 chipset, the first 8-gigabyte USB 3.2 high-performance extension solution on the market, showing potential for growth in video conferencing and other markets.

Financial Performance Exceeding Guidance

Reported Q4 revenues of $16.7 million, exceeding the top end of the guidance, and a gross margin of 60.4%, above the midpoint of the guidance.

Strong Balance Sheet

Valens ended 2024 with $131 million in cash and cash equivalents, maintaining a robust financial position with no debt.

Lowlights

Revenue Decline

Total revenue for 2024 was $57.9 million, a decrease from $84.2 million in 2023, primarily due to inventory digestion and market weakness.

Automotive Revenue Decrease

Automotive business revenue was $21.6 million, down 19.4% from $26.8 million in 2023, affected by price erosion and reduced sales to Mercedes Benz.

Operating Losses

GAAP net loss for 2024 increased to $36.6 million from $19.7 million in 2023, with an adjusted EBITDA loss of $21.1 million for the full year.

SG&A and R&D Expense Increases

SG&A expenses increased by $3.4 million year-over-year, partly due to a $2.2 million expense relating to a production incident.

Company Guidance

During Valens Semiconductor Ltd.'s fourth-quarter and full-year 2024 earnings call, the company provided guidance and key metrics for the upcoming year. For the first quarter of 2025, Valens expects revenue to be between $16.3 million and $16.6 million, with a gross margin ranging from 60.8% to 61.3%, and an adjusted EBITDA loss between $4.5 million and $4.2 million. Looking at the full year 2025, the company anticipates annual revenue to reach $71 million to $76 million, reflecting a 23% to 31% year-over-year growth. The company highlighted its robust balance sheet with $131 million in cash and no debt, which will support its growth and acquisition strategy. Valens also outlined its five-year plan, targeting revenue between $220 million and $300 million by 2029, with a gross margin of 50% to 60% and an EBITDA margin of 15% to 20%.

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.