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Valens (VLN)
NYSE:VLN
US Market

Valens (VLN) AI Stock Analysis

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Valens

(NYSE:VLN)

Rating:55Neutral
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 (VLN) vs. SPDR S&P 500 ETF (SPY)

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 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 Earnings Call Summary

Earnings Call Date:May 07, 2025
(Q1-2025)
|
% Change Since: -22.02%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Neutral
The earnings call for Valens Semiconductor showed a mix of positive developments in revenue and industry partnerships, particularly in the automotive sector, alongside ongoing financial challenges such as adjusted EBITDA losses and increased net loss. While the company achieved significant milestones and exceeded revenue guidance, it continues to face financial difficulties.
Q1-2025 Updates
Positive Updates
Revenue Exceeds Guidance
Valens Semiconductor reported revenues of $16.8 million, surpassing the guidance range of $16.3 million to $16.6 million.
Strong Gross Margin Performance
GAAP gross margin for Q1 2025 was 62.9%, exceeding the guidance range of 60.8% to 61.3%.
Significant Automotive Milestones
Valens announced two major achievements in the automotive industry: a partnership with Mobileye for sensor connectivity and successful interoperability testing with seven vendors of A-PHY silicon.
Growth in Cross-Industry Business
The Cross-Industry Business unit accounted for $11.7 million in revenue, up from $7.2 million in Q1 2024, driven by increased interest in Pro AV and machine vision solutions.
Recognitions and Awards
Valens received the Best of Show Editor’s Choice Award at InfoComm China for its VS6320 chip, highlighting its technological superiority.
Negative Updates
Adjusted EBITDA Loss
Adjusted EBITDA loss was $4.3 million, within the guidance range but indicating ongoing financial challenges.
Net Loss Increase
GAAP net loss for Q1 2025 was $8.3 million, an increase from a net loss of $7.3 million in Q4 2024.
Cash and Working Capital Decrease
Cash, cash equivalents, and short-term deposits decreased to $112.5 million at the end of Q1 2025 from $131 million at the end of Q4 2024, with working capital also declining.
Impact of Inventory Adjustments
The increase in gross margin for the Cross-Industry Business compared to Q4 2024 was partially due to an inventory adjustment in the previous quarter.
Company Guidance
During Valens Semiconductor's Q1 2025 earnings call, the company reported a revenue of $16.8 million, surpassing the top end of their guidance, with a GAAP gross margin of 62.9%, also exceeding expectations. The adjusted EBITDA loss was $4.3 million, aligning within the projected range. The Cross-Industry Business unit (CIB) contributed $11.7 million, or 70% of the total revenue, while the automotive sector accounted for $5.1 million, or 30%. The company highlighted its achievements across various sectors, including a strong presence in the Pro AV market and partnerships in machine vision. Valens also discussed its strategic collaborations in the automotive industry, particularly with Mobileye, which selected Valens' chips for its high-speed sensor connectivity. For Q2 2025, Valens expects revenue between $16.5 million and $16.8 million, a gross margin range of 63% to 64%, and an adjusted EBITDA loss between $4.9 million and $4.4 million.

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
45
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
60
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
50
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.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
57.86M84.16M90.72M70.68M56.91M
Gross Profit
34.28M52.59M63.39M50.58M43.48M
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 SheetCash, Cash Equivalents and Short-Term Investments
130.96M142.02M148.39M174.36M61.57M
Total Assets
172.15M180.56M195.66M202.60M79.17M
Total Debt
7.62M1.96M3.44M0.000.00
Net Debt
-27.80M-15.30M-16.59M-56.79M-26.32M
Total Liabilities
29.46M16.25M28.22M20.40M161.39M
Stockholders Equity
142.69M164.30M167.44M182.20M-82.22M
Cash FlowFree 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
17.78M1.35M-11.73M-84.16M28.31M
Financing Cash Flow
-155.00K1.50M822.00K135.43M406.00K

Valens Technical Analysis

Technical Analysis Sentiment
Negative
Last Price2.16
Price Trends
50DMA
2.31
Negative
100DMA
2.35
Negative
200DMA
2.24
Negative
Market Momentum
MACD
-0.06
Positive
RSI
37.36
Neutral
STOCH
9.91
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 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 (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
75
Outperform
$337.61M15.1821.69%-14.48%46.79%
70
Outperform
$350.40M23.2723.57%5.52%-13.18%-12.06%
62
Neutral
$11.80B10.31-7.45%2.91%7.43%-7.78%
60
Neutral
$1.19B-26.43%-16.95%-2.47%
AIAIP
57
Neutral
$332.88M-1369.57%14.68%20.20%
VLVLN
55
Neutral
$231.52M-24.31%-12.13%-39.21%
42
Neutral
$216.32M-180.49%-9.62%-30.36%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
VLN
Valens
2.16
-1.17
-35.14%
AEHR
Aehr Test Systems
11.78
-1.61
-12.02%
WOLF
Wolfspeed
1.45
-27.05
-94.91%
NVEC
NVE
74.35
1.06
1.45%
NVTS
Navitas Semiconductor
8.09
3.55
78.19%
AIP
Arteris
8.01
-0.05
-0.62%
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.