On Friday, Rosenblatt Securities increased its stock price target for CEVA Inc. (NASDAQ:CEVA) to $35 from the previous $28, while maintaining a Buy rating on the stock. The firm's analyst highlighted CEVA's performance, noting the company signed 10 new intellectual property (IP) licensing deals and experienced a year-over-year increase in Internet of Things (IoT) related royalties.
The analyst praised the quality of the licensing agreements, particularly emphasizing a customized 5G Advanced modem and the introduction of the NeuPro-Nano embedded AI Neural Processing Unit (NPU). These developments align with CEVA's strategic direction of expanding beyond its wireless IP base to offer a comprehensive IP set for connectivity, sensing, and AI inference at the network edge.
The decision to raise the 12-month price target to $35 reflects Rosenblatt's positive outlook on CEVA's future earnings potential. The new target is based on a 35 times multiple of the firm's next twelve months (NTM) Non-GAAP Earnings Per Share (EPS) estimate, which spans December 2025 through September 2026.
CEVA's recent quarter performance, underscored by the new IP licensing deals and growth in IoT royalties, demonstrates the company's effective execution of its strategy. The analyst's maintained Buy rating suggests a continued optimistic view of CEVA's market position and its ability to capitalize on trends in AI and connectivity.
The raised price target and positive remarks from Rosenblatt Securities come as CEVA continues to make strides in its business operations, with a focus on innovation and expanding its IP portfolio in the fast-evolving tech landscape. The firm's analysis indicates confidence in CEVA's trajectory and potential for shareholder value growth over the next year.
In other recent news, Ceva (NASDAQ:CEVA), Inc. has reported a 24% year-over-year increase in Q2 2024 revenue to $28.4 million, driven by successful execution and royalty growth in IoT and smartphone markets. The company's licensing revenue saw a significant 28% rise, while royalty revenues also grew by 19% year-over-year.
Roth/MKM analysts have upgraded Ceva's stock rating from Neutral to Buy, indicating confidence in the company's strategic shift and recent financial performance.
In addition, Ceva has announced a partnership with Edge Impulse, a leader in edge machine learning (ML) solutions. The collaboration aims to advance artificial intelligence (AI) development for edge devices through the integration of the Edge Impulse Platform with Ceva's NeuPro-Nano Neural Network Processor Unit (NPU) intellectual property (IP).
This partnership is expected to enhance the development of AI applications across a variety of products, offering a 'no code' approach to deploying ML applications and facilitating a more rapid time-to-market.
Ceva has also maintained its leading position in the wireless interface IP market, capturing a 67% revenue share in 2023 and powering over 1.3 billion devices globally with its wireless IPs. The company's Bluetooth technology alone held significant market shares in the global Bluetooth IoT sector and the TWS earbuds market. These recent developments underscore Ceva's commitment to maintaining its competitive edge in the wireless connectivity IP sector.
InvestingPro Insights
CEVA Inc.'s recent performance aligns with several key metrics and insights from InvestingPro. The company's stock has shown impressive momentum, with a 43.4% price return over the last three months and a significant 23.9% return just in the past week. This strong performance has brought CEVA's stock price to 98.26% of its 52-week high, reflecting the market's positive sentiment echoed in Rosenblatt's upgraded price target.
InvestingPro Tips highlight CEVA's impressive gross profit margins, which is substantiated by the data showing a gross profit margin of 88.56% for the last twelve months as of Q3 2024. This high margin aligns with the company's focus on high-value IP licensing deals mentioned in the article.
While CEVA has not been profitable over the last twelve months, with an operating income margin of -9.65%, InvestingPro Tips indicate that analysts predict the company will be profitable this year. This projection supports Rosenblatt's optimistic outlook and raised price target based on future earnings potential.
For investors seeking a more comprehensive analysis, InvestingPro offers 12 additional tips for CEVA, providing a deeper understanding of the company's financial health and market position.
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