Valens (VLN) AI Stock Analysis

• Market Cap: $231.52M
• Dividend Yield: N/A
• Average Volume (3M): 263.66K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.05
• Revenue Growth: -12.13%
• EPS Growth: -39.21%
• Country: US
• Employees: 256
• Sector: Technology
• Sector Strength: 84
• Industry: Semiconductors
• EPS (TTM): -0.03
• Shares Outstanding: 105,718,660
• 10 Day Avg. Volume: 217,824
• 30 Day Avg. Volume: 263,659
• PEG Ratio: 0.17
• Price to Book (P/B): 1.79
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -297.96
• Enterprise Value/Market Cap: 0.97
• Enterprise Value/Revenue: 0.88
• Enterprise Value/Gross Profit: 6.56
• Enterprise Value/Ebitda: -1.72
• 1Y Price Target: $3.67
• Price Target Upside: 69.91% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

• Rating: 55 Neutral
• Price Target: $2.50 ▲(15.74%Upside)

Valens Semiconductor's overall stock score reflects a challenging financial situation with declining revenues and negative profitability. While the company has strong balance sheet fundamentals, its valuation is impacted by ongoing losses. Positive developments in industry partnerships and revenue performance provide some optimism, but financial challenges remain significant.

Positive Factors

Earnings

Valens' reported revenue and gross margin exceeded Street expectations.

Partnerships

Valens is partnered with ESWIN Computing to further advance the MIPI A-PHY ecosystem in China.

Product Development

Interest for MIPI A-PHY technology is picking up globally as Valens achieved product interoperability with seven MIPI A-PHY silicon vendors.

Negative Factors

Market Competition

Valens dominates the high-end of the Pro A V market but faces the challenge of expanding into the mainstream segment with USB 3.2 (VS6320).

Valens Business Overview & Revenue Model

Company Description

Valens 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 Money

Valens generates revenue primarily through the sale of its semiconductor products, which are integral to connectivity solutions in both the automotive and audio-video industries. The company partners with automotive manufacturers and technology providers to integrate its chipsets into vehicles, enhancing infotainment and communication systems. Additionally, Valens collaborates with professional audio-video equipment manufacturers to offer high-performance transmission solutions. Key revenue streams include the sale of these chipsets, licensing fees, and potentially royalties from patented technologies. Strategic partnerships and collaborations with industry leaders are significant contributors to Valens' earnings, positioning the company to capitalize on the increasing demand for high-speed connectivity solutions.

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

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

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

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.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
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
-33.96M	-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 Price: 2.16
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 2.16 is below the 20-day moving average (MA) of 2.30, below the 50-day MA of 2.31, and below the 200-day MA of 2.24, indicating a bearish trend. The MACD of -0.06 indicates Positive momentum. The RSI at 37.36 is Neutral, neither overbought nor oversold. The STOCH value of 9.91 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for VLN.

Valens Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AEHR	75 Outperform	$337.61M	15.18	21.69%	―	-14.48%	46.79%
NVEC	70 Outperform	$350.40M	23.27	23.57%	5.52%	-13.18%	-12.06%
Sector *	62 Neutral	$11.80B	10.31	-7.45%	2.91%	7.43%	-7.78%
NVTS	60 Neutral	$1.19B	―	-26.43%	―	-16.95%	-2.47%
AIP	57 Neutral	$332.88M	―	-1369.57%	―	14.68%	20.20%
VLN	55 Neutral	$231.52M	―	-24.31%	―	-12.13%	-39.21%
WOLF	42 Neutral	$216.32M	―	-180.49%	―	-9.62%	-30.36%