CEVA (CEVA) Stock Forecast & Price Target

CEVA Inc. demonstrated a robust performance in its recent quarter, with licensing revenue increasing by 33% year-over-year, bolstered by significant partnerships in both Wi-Fi and cellular connectivity sectors. The company reported total revenue of $29.2 million for the fourth quarter, exceeding expectations with a 21% year-over-year growth, and forecasts an increase in first-quarter revenue to $16 million, along with a notable rise in Non-GAAP Licensing revenue. Furthermore, management anticipates strong growth momentum continuing into 2025, supported by a healthy backlog, increased market penetration across various technologies, and a doubling of Non-GAAP EPS for the full year 2024 compared to the previous year.

CEVA Inc. has provided guidance for Q1 FY25, indicating expected revenue between $25.5 million and $27.5 million, which represents a seasonally lower performance compared to Q4, raising concerns about short-term revenue stability. Additionally, the anticipated non-GAAP gross margin of approximately 88% is below both the consensus estimate of 89% and prior expectations of 90%, signaling potential profitability challenges exacerbated by seasonal revenue declines and strategic design activities. Moreover, despite management's assertion of significant year-over-year revenue growth, the sequential decline and ongoing inventory headwinds indicate underlying weaknesses in demand and could negatively impact the company's longer-term financial outlook.