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PDF Solutions
(NASDAQ:PDFS)
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Rating:58Neutral
Price Target:
$41.00
▼(-11.16% Downside)
Action:Reiterated
Date:09/07/26
The score is primarily supported by solid underlying financial health (notably the low-leverage balance sheet and improved TTM profitability with strong gross margins). It is held back by negative TTM free cash flow and revenue/backlog volatility tied to deal-driven dynamics and a shifting revenue model. Technically, the stock shows weak momentum (below key moving averages with a negative MACD), and valuation is a major headwind given the very high P/E and no dividend support.
Positive Factors
Low leverage and financial flexibility
Very low leverage and growing equity reduce financial risk and give PDF Solutions flexibility to fund product investment, support customer deployments, or withstand uneven demand. This strengthens resilience because the company is less dependent on refinancing or external capital to execute its strategy.
Negative Factors
Negative free cash flow and mixed conversion
Negative free cash flow despite positive operating cash flow indicates that recent investment or working-capital demands are absorbing internally generated funds. Continued weak conversion could constrain self-funded growth and make reported profitability less representative of cash available for strategic use.
Read all positive and negative factors
Positive Factors
Negative Factors
Low leverage and financial flexibility
Very low leverage and growing equity reduce financial risk and give PDF Solutions flexibility to fund product investment, support customer deployments, or withstand uneven demand. This strengthens resilience because the company is less dependent on refinancing or external capital to execute its strategy.
Read all positive factors
PDF Solutions Key Performance Indicators (KPIs)
Any
Revenue by Segment
Breaks down revenue by different business segments, highlighting which areas are driving growth and where the company might be facing challenges.
Breaks down revenue by different business segments, highlighting which areas are driving growth and where the company might be facing challenges.
Data provided by:
The Fly
The FlyPDF Solutions (PDFS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.66B
Dividend YieldN/A
Average Volume (3M)604.14K
Price to Earnings (P/E)156.3
Beta (1Y)1.70
Revenue Growth23.05%
EPS Growth1033.19%
CountryUS
Employees600
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.25
Shares Outstanding42,227,215
10 Day Avg. Volume647,031
30 Day Avg. Volume604,137
Financial Highlights & Ratios
PEG Ratio15.24
Price to Book (P/B)4.14
Price to Sales (P/S)5.12
P/FCF Ratio-130.77
Enterprise Value/Market Cap1.76
Enterprise Value/Revenue12.08
Enterprise Value/Gross Profit16.91
Enterprise Value/Ebitda81.61
Forecast
1Y Price Target
$61.50Price Target Upside33.26% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
EPS Forecast (FY)1.29
Revenue Forecast (FY)$263.78M
PDF Solutions Business Overview & Revenue Model
Company Description
PDF Solutions, Inc. offers a comprehensive array of solutions to the semiconductor sector, encompassing proprietary software, physical intellectual property for integrated circuit designs, electrical measurement hardware, proven methodologies, and...
How the Company Makes Money
PDF Solutions primarily makes money by selling and supporting its software and data-analytics offerings for semiconductor manufacturing and test operations, complemented by related services. Key revenue streams include: (1) Software revenue: Fees ...
PDF Solutions Earnings Call Summary
Earnings Call Date:May 07, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Nov 05, 2026
Earnings Call Sentiment Positive
The call presented a clearly positive operational trajectory: strong top-line growth (total revenue +26%, platform +36%), improving profitability (operating margin 25%, net income +56% YoY), expanded backlog (+9%) and promising product momentum (eProbe shipments, secureWISE expansion, AI-enabled Exensio beta). Headwinds are manageable and largely execution/timing and volume-variability related: a 12% decline in volume-based revenue, increased CapEx reducing cash near-term, modest QoQ gross margin dip, and some customer concentration risk. Management provided constructive guidance and liquidity actions (expanded revolver), and reiterated targets for 20% revenue growth and margin progression, suggesting the positives materially outweigh the negatives.Positive Updates
Strong Revenue Growth
Total revenue of $60.1M in Q1 2026, up 26% year-over-year, with management reconfirming full-year revenue growth consistent with their 20% long-term target.
Negative Updates
Volume-Based Revenue Decline
Volume-based revenue (including gain-share/Advantest-related) was $9.2M, down 12% year-over-year, reflecting volatility in wafer volumes/gain-share that can pressure gross margin and short-term revenue.
Read all updates
Q1-2026 Updates
Positive
Negative
Strong Revenue Growth
Total revenue of $60.1M in Q1 2026, up 26% year-over-year, with management reconfirming full-year revenue growth consistent with their 20% long-term target.
Read all positive updates
Company Guidance
PDF reaffirmed 2026 guidance, expecting full-year revenue growth consistent with its 20% long-term target and to make meaningful progress toward a 27% operating margin and 77% gross margin. In Q1 the company reported $60.1M revenue (+26% YoY), platform revenue $50.9M (+36% YoY), volume-based revenue $9.2M (-12% YoY), backlog $246M (+9% YoY), gross margin 76% (vs. 77% prior quarter), operating margin 25% (vs. 24% last quarter and 18% a year ago) and operating profit of ~$15M (up ~75% YoY from $8.6M); net income was $12.6M, $0.31/share (up 56% in net income and 48% in EPS YoY from $8.1M, $0.21). The quarter ended with $31M cash and short‑term investments (down from $42M), roughly $10M of CapEx spent on eProbe buildout, an expanded $30M unused revolver, and plans to ship six eProbe systems in 2026 (1 shipped in Q1, expected to begin contributing in Q2; company expects ~5 of 6 to be revenue‑generating, ~1 demo, and ~2 net‑new customers), with higher CapEx this year and an anticipated cash build in the second half; management also targets a beta Exensio AI release in Q3.PDF Solutions Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
86
Very Positive
Cash Flow
52
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 241.18M | 219.02M | 179.47M | 165.84M | 148.55M | 111.06M |
| Gross Profit | 172.35M | 158.40M | 125.32M | 114.09M | 100.64M | 66.87M |
| EBITDA | 35.71M | 18.50M | 7.79M | 8.39M | 6.92M | -6.26M |
| Net Income | 10.31M | -640.00K | 4.06M | 3.10M | -3.43M | -21.49M |
Balance Sheet | ||||||
| Total Assets | 519.18M | 418.70M | 315.29M | 290.14M | 278.67M | 273.77M |
| Cash, Cash Equivalents and Short-Term Investments | 114.88M | 42.22M | 114.89M | 135.52M | 139.18M | 140.23M |
| Total Debt | 71.56M | 76.66M | 5.18M | 6.19M | 7.34M | 7.02M |
| Total Liabilities | 146.68M | 147.68M | 69.25M | 61.19M | 68.66M | 54.18M |
| Stockholders Equity | 372.50M | 271.02M | 246.04M | 228.95M | 210.01M | 219.59M |
Cash Flow | ||||||
| Free Cash Flow | -2.04M | -8.58M | -7.45M | 3.13M | 23.72M | 190.00K |
| Operating Cash Flow | 38.70M | 24.05M | 9.70M | 14.60M | 32.30M | 4.24M |
| Investing Cash Flow | -37.70M | -137.36M | -5.94M | -28.99M | 84.60M | -4.67M |
| Financing Cash Flow | 77.11M | 64.56M | -11.23M | -5.89M | -24.31M | -5.53M |
PDF Solutions Technical Analysis
Negative
46.15
Price Trends
46.64
Negative
50.97
Negative
44.32
Negative
Market Momentum
-2.23
Positive
36.56
Neutral
13.79
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PDFS, the sentiment is Negative. The current price of 46.15 is below the 20-day moving average (MA) of 47.91, below the 50-day MA of 46.64, and above the 200-day MA of 44.32, indicating a bearish trend. The MACD of -2.23 indicates Positive momentum. The RSI at 36.56 is Neutral, neither overbought nor oversold. The STOCH value of 13.79 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PDFS.
PDF Solutions Risk Analysis
PDF Solutions disclosed 33 risk factors in its most recent earnings report. PDF Solutions reported the most risks in the "Tech & Innovation" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
PDF Solutions Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $2.34B | 18.76 | 26.70% | 0.94% | 24.35% | 45.56% | |
72 Outperform | $785.28M | -57.47 | -5.41% | ― | -1.04% | -710.67% | |
70 Outperform | $509.75M | 33.50 | 5.40% | ― | 10.14% | -10.93% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
58 Neutral | $1.66B | 156.28 | 3.47% | ― | 23.05% | 1033.19% | |
57 Neutral | $357.04M | -19.40 | -3.92% | ― | 15.14% | 52.80% | |
51 Neutral | $203.31M | -8.33 | -28.06% | ― | 31.86% | 33.91% |
* Technology Sector Average
PDFS
PDF Solutions
39.32
10.59
36.86%
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.