Valens Semiconductor Ltd. (VLN) Stock Analysis and Metrics

Sector: Technology Industry: Semiconductors CIK: 0001863006

P/B 1.52

P/E -5.48

P/S 2.43

Market Cap 165.20 Mn

ROIC (Qtr) -17.06

Div Yield % 0.00

Rev 1y % (Qtr) 8.09

Total Debt (Qtr) 8.19 Mn

Debt/Equity (Qtr) 0.08

About

Valens Semiconductor Ltd., often referred to as Valens, operates in the dynamic semiconductor industry, a critical enabler of various electronic devices and systems. Valens specializes in providing semiconductor products that cater to the audio, video, and data transmission markets. The company's revenue generation primarily revolves around the sale of its semiconductor products. These products find extensive use in the development of consumer electronics, automotive systems, and industrial equipment. Valens boasts a diverse product portfolio,...

Valens Semiconductor Ltd., often referred to as Valens, operates in the dynamic semiconductor industry, a critical enabler of various electronic devices and systems. Valens specializes in providing semiconductor products that cater to the audio, video, and data transmission markets.

The company's revenue generation primarily revolves around the sale of its semiconductor products. These products find extensive use in the development of consumer electronics, automotive systems, and industrial equipment. Valens boasts a diverse product portfolio, including its HDBaseT technology and WHD (Wireless Home Digital) technology.

HDBaseT technology, a flagship offering from Valens, is a high-speed, multi-protocol solution that facilitates the transmission of high-definition video, audio, and data signals over a single cable. This versatile technology is extensively used in the consumer electronics sector, particularly in the development of TVs, projectors, soundbars, and professional audio-visual equipment such as conference room systems and digital signage. Moreover, it finds application in the automotive industry, enhancing infotainment and rear-seat entertainment systems.

On the other hand, Valens' WHD technology offers a reliable and secure wireless connectivity solution for consumer electronics devices. This technology, which combines Wi-Fi and Bluetooth, provides a seamless and high-quality wireless connection for devices such as TVs, soundbars, and gaming consoles. It is particularly useful in the development of smart home systems.

Valens also caters to the automotive industry with its semiconductor products, leveraging its HDBaseT technology for infotainment and rear-seat entertainment systems. The company's automotive solutions aim to deliver a dependable and high-quality audio-visual experience for drivers and passengers.

In the industrial sector, Valens offers technology designed to provide a reliable and high-quality audio-visual experience for industrial equipment. This includes medical devices, security cameras, and industrial control systems. The company's industrial technology ensures secure and reliable transmission of high-definition video and audio signals over long distances.

Valens holds a strong position in the semiconductor industry, competing with industry giants like Texas Instruments, Analog Devices, and STMicroelectronics. The company's competitive edge lies in its expertise in high-definition video and audio transmission technologies and its ability to provide secure and reliable long-distance signal transmission.

Valens' customer base includes major consumer electronics companies such as Samsung, LG, and Sony, and prominent automotive companies like General Motors, Ford, and Toyota. The company's products also find application in a wide range of industrial applications, including medical devices, security cameras, and industrial control systems.

Valens' product range includes its HDBaseT technology and WHD technology, both of which contribute significantly to the company's revenue generation. These technologies are integral to the company's operations and represent its commitment to innovation and quality in the semiconductor industry.

Stock Price Chart

Analysis

Pros

Healthy cash reserves of 31.59M provide 20.65x coverage of short-term debt 1.53M, demonstrating strong liquidity position and minimal refinancing risk.
Strong tangible asset base of 130.85M provides 15.97x coverage of total debt 8.19M, indicating robust asset backing and low credit risk.
Short-term investments of 63.08M provide solid 4.22x coverage of other current liabilities 14.94M, indicating strong liquidity.
Tangible assets of 130.85M provide robust 8.76x coverage of other current liabilities 14.94M, indicating strong asset backing.
Cash reserves of 31.59M provide robust 1.49x coverage of current liabilities 21.14M, indicating strong short-term solvency.

Cons

Operating cash flow of (12.81M) barely covers its investment activities of 33.34M, with a coverage ratio of -0.38, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
Investment activities of 33.34M provide weak support for R&D spending of 41.65M, which is 0.80x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
The company's operating cash flow of (12.81M) shows concerning coverage of stock compensation expenses of 15.53M, with a -0.83 ratio indicating potential earnings quality issues.
Operating cash flow of (12.81M) provides minimal -74.50x coverage of tax expenses of 172000, suggesting potential tax planning inefficiencies or unsustainable tax positions.
Free cash flow of (14.45M) provides weak coverage of capital expenditures of 1.64M, with a -8.83 ratio suggesting additional external financing needs for growth initiatives.

Peer Comparison

Companies in the Semiconductors

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	NVDA	Nvidia Corp	4,276.26 Bn	43.11	22.85	10.48 Bn
2	AVGO	Broadcom Inc.	1,690.87 Bn	89.31	28.22	64.23 Bn
3	TSM	Taiwan Semiconductor Manufacturing Co Ltd	1,514.32 Bn	29.36	12.71	31.18 Bn
4	AMD	Advanced Micro Devices Inc	343.27 Bn	103.83	10.72	3.87 Bn
5	MU	Micron Technology Inc	269.16 Bn	31.52	7.20	15.28 Bn
6	INTC	Intel Corp	249.55 Bn	1,260.33	4.67	46.55 Bn
7	QCOM	Qualcomm Inc/De	195.62 Bn	35.30	4.42	14.81 Bn
8	TXN	Texas Instruments Inc	163.92 Bn	32.50	9.49	14.05 Bn

Industry Comparisons

Current Valuation

Metric	Value	Industry
EV to Assets	0.92	3.95
EV to Cash from Ops.	-9.79	-331.60
EV to Debt	15.32	86.14
EV to EBIT	-4.19	-55.96
EV to EBITDA	-7.57	20.88
EV to Free Cash Flow [EV/FCF]	-8.68	-4.09
EV to Market Cap	0.76	0.80
EV to Revenue	1.85	18.79
Price to Book Value [P/B]	1.52	5.23
Price to Earnings [P/E]	-5.48	12.47

Dividend Metrics

Metric	Value	Industry	Percentile
Dividend Coverage Ratio	0.00	2.29
Dividend Payout Ratio %	0.00	8.00
Dividend per Basic Share	0.00	0.62
FCF Dividend Payout Ratio %	0.00	10.38
Interest Coverage	0.00	8.19

Growth Metrics

Metric	Value	Industry
Capex Growth (1y) %	-52.56	-155.77
Cash and Equivalents Growth (1y) %	-10.88	44.44
Dividend Growth (1y) %	0.00	5.30
EBIAT Growth (1y) %	-13.80	34.22
EBITDA Growth (1y) %	-0.67	47.50
EBIT Growth (1y) %	-13.59	30.14
EBT Growth (1y) %	-13.59	47.04
EPS Growth (1y) %	-16.00	36.18
FCF Growth (1y) %	-274.38	252.76
Gross Profit Growth (1y) %	6.81	43.92

Liquidity Ratios

Metric	Value	Industry
Asset Utilization Ratio	0.50	0.49
Cash Payout Ratio	0.00	0.09
Cash Ratio	1.49	2.23
Current Ratio	5.68	5.43
Debt to Equity Ratio	0.08	0.34
Interest Cover Ratio	0.00	8.19
Times Interest Earned	0.00	8.19

Profitability

Metric	Value	Industry
EBITDA Margin %	-38.40	-112.44
EBIT Margin %	-44.13	-92.10
EBT Margin %	-44.13	-132.39
Gross Margin %	81.40	47.63
Net Profit Margin %	-44.40	-133.41

Valens Semiconductor Ltd. (NYSE: VLN)