Arteris, Inc. (NASDAQ: AIP)

Sector: Technology Industry: Semiconductors CIK: 0001667011
Market Cap 619.61 Mn
P/B -54.12
P/E -17.99
P/S 9.40
ROIC (Qtr) 1,392.11
Div Yield % 0.00
Rev 1y % (Qtr) 18.32
Total Debt (Qtr) 6.86 Mn
Debt/Equity (Qtr) -0.60

About

Arteris, Inc., a leading provider of semiconductor system IP, operates in the technology industry with a focus on interconnect and other intellectual property. The company's System IP solutions manage on-chip communications and IP block deployments in System-on-Chip (SoC) semiconductors and systems of chiplets, achieving this through connecting client IP blocks such as processors, memories, AI/ML accelerators, graphics subsystems, safety and security, and other I/Os via multiple NoCs. This enables customers to experience faster SoC targeting, as...

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Price action

Investment thesis

Bull case

  • Healthy cash reserves of 17.42M provide 6.22x coverage of short-term debt 2.80M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 101.20M provides 14.76x coverage of total debt 6.86M, indicating robust asset backing and low credit risk.
  • Long-term investments of 20.96M provide solid 5.17x coverage of long-term debt 4.05M, indicating strategic financial planning.
  • Retained earnings of (163.13M) represent substantial 14.25x of equity (11.45M), indicating strong internal capital generation.
  • R&D investment of 48.21M represents healthy 0.52x of deferred revenue 92.62M, indicating strong future innovation pipeline.

Bear case

  • Operating cash flow of 932000 barely covers its investment activities of (2.98M), with a coverage ratio of -0.31, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (2.98M) provide weak support for R&D spending of 48.21M, which is -0.06x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of 932000 provides insufficient coverage of deferred revenue obligations of 92.62M, which is 0.01x, raising concerns about future service delivery capabilities.
  • The company's operating cash flow of 932000 shows concerning coverage of stock compensation expenses of 17.90M, with a 0.05 ratio indicating potential earnings quality issues.
  • Free cash flow of (372000) provides weak coverage of capital expenditures of 1.30M, with a -0.29 ratio suggesting additional external financing needs for growth initiatives.

Product and Service Breakdown of Revenue (2024)

Geographical Breakdown of Revenue (2024)

Peer comparison

Companies in the Semiconductors
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 NVDA Nvidia Corp 4,120.22 Bn 6,867.04 847.78 10.48 Bn
2 TSM Taiwan Semiconductor Manufacturing Co Ltd 1,782.57 Bn 362.79 138.75 31.18 Bn
3 AVGO Broadcom Inc. 1,393.11 Bn 119.76 35.84 65.14 Bn
4 MU Micron Technology Inc 453.24 Bn 657.82 30.76 12.43 Bn
5 AMD Advanced Micro Devices Inc 338.42 Bn 78.07 9.77 3.85 Bn
6 TXN Texas Instruments Inc 225.71 Bn 66.70 17.17 14.05 Bn
7 INTC Intel Corp 225.13 Bn -843.17 4.26 46.59 Bn
8 QCOM Qualcomm Inc/De 147.37 Bn 27.47 3.28 14.82 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 5.67 4.15
EV to Cash from Ops. EV/CFO 655.44 -405.91
EV to Debt EV to Debt 89.11 81.67
EV to EBIT EV/EBIT -19.38 -94.01
EV to EBITDA EV/EBITDA -21.55 112.02
EV to Free Cash Flow [EV/FCF] EV/FCF -1,642.12 103.01
EV to Market Cap EV to Market Cap 0.99 0.77
EV to Revenue EV/Rev 9.27 36.18
Price to Book Value [P/B] P/B -54.12 24.05
Price to Earnings [P/E] P/E -17.99 97.65
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 2.38
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 3.97
Dividend per Basic Share Div per Share (Qtr) 0.00 0.63
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 21.06
Interest Coverage Int. cover (Qtr) -171.31 8.98
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -85.75 -149.31
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -2.31 70.06
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 5.42
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 4.02 51.85
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 6.86 91.14
EBIT Growth (1y) % EBIT 1y % (Qtr) 5.13 36.72
EBT Growth (1y) % EBT 1y % (Qtr) 5.35 30.25
EPS Growth (1y) % EPS 1y % (Qtr) 12.63 49.61
FCF Growth (1y) % FCF 1y % (Qtr) 78.98 281.55
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 21.30 37.25
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.61 0.50
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.09
Cash Ratio Cash Ratio (Qtr) 0.26 2.35
Current Ratio Curr Ratio (Qtr) 0.91 5.61
Debt to Equity Ratio Debt/Equity (Qtr) -0.60 -0.02
Interest Cover Ratio Int Coverage (Qtr) -171.31 8.98
Times Interest Earned Times Interest Earned (Qtr) -171.31 8.98
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -42.60 -113.04
EBIT Margin % EBIT Margin % (Qtr) -47.81 -92.05
EBT Margin % EBT Margin % (Qtr) -48.09 -132.99
Gross Margin % Gross Margin % (Qtr) 90.00 47.72
Net Profit Margin % Net Margin % (Qtr) -52.20 -133.93