CEVA, Inc. Net Income dropped on 96.6% and EBITDA Margin dropped on 18.1 pp from 21.9% to 3.7%
02/13/2019 • About CEVA, Inc. (
$CEVA) • By InTwits
CEVA, Inc. reported 2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 3.7% in 2018, 21.9% in 2017, 23.4% in 2016, 14.6% in 2015, 5.6% in 2014
- CEVA, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.7%. At the same time it's in pair with industry average of 3.4%
- CAPEX is quite volatile: $3m in 2018, $4m in 2017, $2m in 2016, $2m in 2015, $1m in 2014
- The company has unprofitable business model: ROIC is -0.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue dropped on 11.0%. Annual revenue decline showed slowdown in 18Q4 - revenue decreased slightly on 0.93%. During the last 5 years Revenue growth topped in 2016 at 22.1% and was decelerating since that time. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 18.1 pp from 21.9% to 3.7% in 2018. During 2014-2018 EBITDA Margin topped in 2016 at 23.4% and was declining since that time.
Gross Margin decreased on 2.3 pp from 92.1% to 89.8% in 2018. During the last 5 years Gross Margin topped in 2017 at 92.1%. SG&A as a % of Revenue increased on 2.6 pp from 26.4% to 28.9% in 2018. During the last 5 years SG&A as a % of Revenue bottomed in 2017 at 26.4%.
Net Income margin dropped on 18.7 pp from 19.5% to 0.74% in 2018. During 2014-2018 Net Income margin topped in 2017 at 19.5%.
Investments (CAPEX, working capital and M&A)
In 2018 the company had CAPEX/Revenue of 4.3%. CAPEX/Revenue increased slightly on 0.59 pp from 3.7% in 2015 to 4.3% in 2018. For the last three years the average CAPEX/Revenue was 4.1%. Battling declining revenue CEVA, Inc. made large investments to CAPEX (114% of EBITDA) but that didn't help at least in this year.
Return on investment
The company operates at negative ROIC (-0.5%) and low but positive ROE (0.2%). ROIC decreased on 7.5 pp from 7.0% to -0.51% in 2018. ROE decreased on 7.2 pp from 7.5% to 0.23% in 2018. During 2014-2018 ROIC topped in 2016 at 7.3% and was declining since that time. During the last 5 years ROE topped in 2017 at 7.5%.
Leverage (Debt)
The company has no debt. Cash increased on 2.4%.
Valuation and dividends
CEVA, Inc.'s trades at EV/EBITDA 198.8x and P/E 1,047.4x.
Management team
The company's CEO Gideon Wertheizer is a founder and has spent 14 years with the company. The company's CFO Yaniv Arieli has spent 14 years with the company.
Financial and operational results
FY ended 12/31/2018
CEVA, Inc. ($CEVA) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 50.808 | 59.499 | 72.653 | 87.507 | 77.877 | -11.0% |
| Gross Profit | 45.808 | 54.075 | 66.567 | 80.554 | 69.926 | -13.2% |
| SG&A | 17.869 | 18.352 | 20.107 | 23.060 | 22.515 | -2.4% |
| EBITDA | 2.863 | 8.668 | 17.021 | 19.123 | 2.912 | -84.8% |
| Net Income | -0.819 | 6.267 | 13.100 | 17.028 | 0.574 | -96.6% |
Balance Sheet
|
|---|
| Cash | 16.166 | 18.909 | 18.401 | 21.739 | 22.260 | 2.4% |
| Short Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 1.416 | 2.184 | 2.387 | 4.135 | 3.319 | -19.7% |
Ratios
|
|---|
| Revenue growth | 3.9% | 17.1% | 22.1% | 20.4% | -11.0% | |
| EBITDA growth | -47.3% | 202.8% | 96.4% | 12.3% | -84.8% | |
|
|---|
| Gross Margin | 90.2% | 90.9% | 91.6% | 92.1% | 89.8% | -2.3% |
| EBITDA Margin | 5.6% | 14.6% | 23.4% | 21.9% | 3.7% | -18.1% |
| SG&A, % of revenue | 35.2% | 30.8% | 27.7% | 26.4% | 28.9% | 2.6% |
| Net Income Margin | -1.6% | 10.5% | 18.0% | 19.5% | 0.7% | -18.7% |
| CAPEX, % of revenue | 2.8% | 3.7% | 3.3% | 4.7% | 4.3% | -0.5% |
|
|---|
| ROIC | 0.8% | 3.5% | 7.3% | 7.0% | -0.5% | -7.5% |
| ROE | -0.4% | 3.4% | 6.6% | 7.5% | 0.2% | -7.2% |
| Net Debt/EBITDA | -5.6x | -2.2x | -1.1x | -1.1x | -7.6x | -6.5x |
CEVA, Inc. ($CEVA) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 18 | 17 | 21 | 21 | | -17.5% | -15.0% | -10.9% | -0.9% |
| EBITDA | -2 | -2 | 3 | 3 | | -138.7% | -159.9% | -54.9% | -13.6% |
| Net Income | -2 | -2 | 3 | 2 | | -153.1% | -153.5% | -56.5% | -27.2% |
Balance Sheet
|
|---|
| Cash | 18 | 11 | 9 | 22 | | 45.6% | -37.4% | -59.8% | 2.4% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | | |
Ratios
|
|---|
| Gross Margin | 88.8% | 88.6% | 90.6% | 90.7% | | -3.3% | -3.5% | -2.2% | -0.4% |
| EBITDA Margin | -11.2% | -10.1% | 14.8% | 16.2% | | -35.2% | -24.5% | -14.4% | -2.4% |
| Net Income Margin | -12.4% | -11.9% | 11.9% | 10.8% | | -31.7% | -30.9% | -12.5% | -3.9% |
Peers in Semiconductors
Below we provide CEVA, Inc. benchmarking against other companies in Semiconductors industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| NanoFlex Power Corp ($OPVS) | | | | 72.5% | 354.8% |
| MoSys, Inc. ($MOSY) | | -18.4% | 37.2% | 46.8% | 87.7% |
| SMART Global Holdings, Inc. ($SGH) | | | -16.9% | 42.5% | 69.3% |
| Micron Technology, Inc. ($MU) | | -1.0% | -23.4% | 63.9% | 49.5% |
| Adesto Technologies Corporation ($IOTS) | | 4.3% | 1.6% | 27.6% | 48.8% |
| |
|---|
| Median (67 companies) | 54.6% | 8.5% | 4.4% | 10.9% | 5.0% |
|---|
| CEVA, Inc. ($CEVA) | | 17.1% | 22.1% | 20.4% | -11.0% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| NVE Corporation ($NVEC) | 77.9% | 80.3% | 76.1% | 78.5% | 79.0% |
| Rambus, Inc. ($RMBS) | 85.9% | 84.7% | 80.1% | 79.9% | 76.8% |
| Universal Display Corporation ($OLED) | 76.0% | 64.2% | 83.9% | 80.8% | 75.5% |
| Intermolecular, Inc. ($IMI) | 48.3% | 57.4% | 66.5% | 67.5% | 70.3% |
| Xilinx, Inc. ($XLNX) | 68.8% | 70.2% | 69.7% | 69.9% | 69.9% |
| |
|---|
| Median (65 companies) | 45.3% | 47.0% | 47.2% | 48.6% | 50.4% |
|---|
| CEVA, Inc. ($CEVA) | 90.2% | 90.9% | 91.6% | 92.1% | 89.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| NVE Corporation ($NVEC) | 58.8% | 66.0% | 61.8% | 65.6% | 65.1% |
| Micron Technology, Inc. ($MU) | 31.7% | 35.0% | 25.4% | 47.9% | 65.0% |
| NXP Semiconductors N.V. ($NXPI) | 25.7% | 41.5% | 21.6% | 46.2% | 49.9% |
| Texas Instruments Incorporated ($TXN) | 39.7% | 42.0% | 43.5% | 46.7% | 48.6% |
| Intel Corp ($INTC) | 42.8% | 41.0% | 35.2% | 41.7% | 45.7% |
| |
|---|
| Median (66 companies) | 9.9% | 11.3% | 9.2% | 10.7% | 10.0% |
|---|
| CEVA, Inc. ($CEVA) | 5.6% | 14.6% | 23.4% | 21.9% | 3.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Alpha and Omega Semiconductor Limited ($AOSL) | 3.0% | 6.6% | 6.5% | 12.2% | 42.2% |
| Renesola Ltd. ($SOL) | 3.5% | 0.0% | 0.0% | 78.0% | 41.7% |
| First Solar, Inc. ($FSLR) | 7.6% | 4.0% | 7.9% | 17.5% | 33.0% |
| Sigma Designs Inc ($SIGM) | 11.0% | 6.5% | 6.2% | 14.1% | 29.3% |
| Micron Technology, Inc. ($MU) | 19.0% | 24.8% | 46.9% | 23.3% | 29.2% |
| |
|---|
| Median (66 companies) | 3.6% | 4.0% | 3.7% | 4.7% | 4.6% |
|---|
| CEVA, Inc. ($CEVA) | 2.8% | 3.7% | 3.3% | 4.7% | 4.3% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| SMART Global Holdings, Inc. ($SGH) | | | 2.5% | 21.5% | 51.7% |
| Texas Instruments Incorporated ($TXN) | 25.1% | 29.8% | 34.9% | 43.1% | 47.5% |
| Micron Technology, Inc. ($MU) | 18.8% | 15.8% | 0.8% | 21.5% | 42.9% |
| Applied Materials Inc ($AMAT) | 15.8% | 15.2% | 19.0% | 31.2% | 36.4% |
| NVIDIA Corporation ($NVDA) | 9.2% | 13.3% | 13.1% | 27.3% | 35.3% |
| |
|---|
| Median (73 companies) | 5.7% | 3.8% | 1.4% | 3.2% | 5.2% |
|---|
| CEVA, Inc. ($CEVA) | 0.8% | 3.5% | 7.3% | 7.0% | -0.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| MACOM Technology Solutions Holdings, Inc. ($MTSI) | 25.4x | 3.3x | 3.0x | 7.2x | 98.6x |
| Inphi Corporation ($IPHI) | | -6.4x | 4.5x | 33.7x | 32.2x |
| JinkoSolar Holding Company Limited ($JKS) | 4.2x | 3.3x | 4.1x | 11.0x | 8.2x |
| Lattice Semiconductor Corporation ($LSCC) | -1.8x | | 6.5x | 19.0x | 3.9x |
| Renesola Ltd. ($SOL) | 7.0x | 35.0x | 123.6x | 2.3x | 3.3x |
| |
|---|
| Median (45 companies) | -0.5x | -0.2x | 0.4x | 0.4x | 0.3x |
|---|
| CEVA, Inc. ($CEVA) | -5.6x | -2.2x | -1.1x | -1.1x | -7.6x |
