Valens Semiconductor Ltd. (NYSE: VLN)

Sector: Technology Industry: Semiconductors CIK: 0001863006
Market Cap 257.66 Mn
P/B 2.37
P/E -8.55
P/S 3.80
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,...

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Price action

Investment thesis

Bull case

  • 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.

Bear case

  • 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.

Geographical Breakdown of Revenue (2024)

Segments 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 4,516.69 Bn 45.53 24.14 10.48 Bn
2 TSM Taiwan Semiconductor Manufacturing Co Ltd 1,678.13 Bn 32.54 14.09 31.18 Bn
3 AVGO Broadcom Inc. 1,624.80 Bn 70.26 25.43 65.14 Bn
4 MU Micron Technology Inc 386.61 Bn 32.46 9.14 12.43 Bn
5 AMD Advanced Micro Devices Inc 330.88 Bn 100.08 10.33 3.87 Bn
6 INTC Intel Corp 300.63 Bn 1,518.33 5.63 46.55 Bn
7 QCOM Qualcomm Inc/De 195.07 Bn 35.20 4.40 14.81 Bn
8 TXN Texas Instruments Inc 173.86 Bn 34.48 10.07 14.05 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.59 4.22
EV to Cash from Ops. EV/CFO -17.01 -369.72
EV to Debt EV to Debt 26.60 90.98
EV to EBIT EV/EBIT -7.28 -66.75
EV to EBITDA EV/EBITDA -13.16 23.41
EV to Free Cash Flow [EV/FCF] EV/FCF -15.08 -8.88
EV to Market Cap EV to Market Cap 0.85 0.80
EV to Revenue EV/Rev 3.21 20.68
Price to Book Value [P/B] P/B 2.37 5.21
Price to Earnings [P/E] P/E -8.55 11.55
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 2.39
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 8.25
Dividend per Basic Share Div per Share (Qtr) 0.00 0.63
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 9.91
Interest Coverage Int. cover (Qtr) 0.00 8.38
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -52.56 -155.98
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -10.88 45.60
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 5.64
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -13.80 26.23
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -0.67 47.12
EBIT Growth (1y) % EBIT 1y % (Qtr) -13.59 25.83
EBT Growth (1y) % EBT 1y % (Qtr) -13.59 39.93
EPS Growth (1y) % EPS 1y % (Qtr) -16.00 24.64
FCF Growth (1y) % FCF 1y % (Qtr) -274.38 244.42
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 6.81 43.10
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.50 0.49
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.09
Cash Ratio Cash Ratio (Qtr) 1.49 2.23
Current Ratio Curr Ratio (Qtr) 5.68 5.43
Debt to Equity Ratio Debt/Equity (Qtr) 0.08 0.34
Interest Cover Ratio Int Coverage (Qtr) 0.00 8.38
Times Interest Earned Times Interest Earned (Qtr) 0.00 8.38
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -38.40 -112.38
EBIT Margin % EBIT Margin % (Qtr) -44.13 -91.98
EBT Margin % EBT Margin % (Qtr) -44.13 -132.25
Gross Margin % Gross Margin % (Qtr) 81.40 47.73
Net Profit Margin % Net Margin % (Qtr) -44.40 -133.26