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Pdf Solutions (PDFS)
NASDAQ:PDFS
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PDF Solutions
(NASDAQ:PDFS)
Rating:68Neutral
Price Target:―
PDF Solutions (PDFS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$758.92M
Dividend YieldN/A
Average Volume (3M)245.00K
Price to Earnings (P/E)536.2
Beta (1Y)1.54
Revenue Growth11.75%
EPS Growth-40.76%
CountryUS
Employees539
SectorTechnology
Sector Strength76
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.21
Shares Outstanding39,139,565
10 Day Avg. Volume268,635
30 Day Avg. Volume244,998
Financial Highlights & Ratios
PEG Ratio-20.48
Price to Book (P/B)3.02
Price to Sales (P/S)0.00
P/FCF Ratio-97.72
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$31.00Price Target Upside64.54% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
PDF Solutions Business Overview & Revenue Model
Company DescriptionPDF Solutions, Inc. provides proprietary software and physical intellectual property products for integrated circuit designs, electrical measurement hardware tools, proven methodologies, and professional services in the United States, China, Japan, Taiwan, and internationally. The company offers Exensio software products, such as Manufacturing Analytics that stores collected data in a common environment with a consistent view for enabling product engineers to identify and analyze production yield, performance, reliability, and other issues; Process Control that provides failure detection and classification capabilities for monitoring, alarming, and controlling manufacturing tool sets; Test Operations that offers data collection and analysis capabilities; and Assembly Operations that provides device manufacturers with the capability to link assembly and packaging data, including fabrication and characterization data over the product life cycle. It also provides design-for-inspection (DFI) Systems, such as DFI on-chip instruments; eProbe non-contactless E-beam tool; and Characterization Vehicle (CV) system, which includes CV test chips and pdFasTest electrical testers, as well as Exensio characterization software, designed to analyze the measurements collected from DFI on-chip instruments using the eProbe tool. In addition, the company offers Cimetrix software products that enables equipment manufacturers to provide industry standard interfaces on their products; and software-as-a-service, software related services, and characterization services. It sells its technologies and services through direct sales force, service teams, and strategic alliances to integrated device manufacturers, fabless semiconductor companies, foundries, equipment manufacturers, electronics manufacturing suppliers, original device manufacturers, out-sourced semiconductor assembly and test, and system houses. The company was founded in 1991 and is headquartered in Santa Clara, California.
How the Company Makes MoneyPDF Solutions generates revenue primarily through the sale of its software products and services, which include licensing fees for its Exensio platform and DFI solutions. The company also earns income from professional services, maintenance contracts, and customer support. Additionally, PDF Solutions partners with semiconductor manufacturers and foundries, which can lead to joint development projects and collaborations that contribute to its revenue streams. These partnerships are crucial in integrating PDF Solutions' technologies into the manufacturing processes of its clients, thereby driving demand and ensuring long-term engagements.
PDF Solutions Financial Statement Overview
Summary
PDF Solutions has shown impressive revenue growth and improvement in profitability, with a strong balance sheet characterized by low leverage and a robust equity base. However, cash flow management remains an area for improvement due to fluctuating free cash flow.Income Statement
PDF Solutions has shown strong revenue growth over the past few years, increasing from $88.05M in 2020 to $179.47M in 2024, with a significant increase in gross profit margin from 58.25% in 2020 to 69.83% in 2024. The net profit margin has improved from negative in previous years to 5.07% in 2024, indicating a turnaround in profitability. EBIT and EBITDA margins are still low, suggesting room for improvement in operational efficiency.85
Very Positive
Balance Sheet
The company maintains a strong equity position, with an equity ratio of 78.03% in 2024, indicating financial stability. The debt-to-equity ratio remains low at 0.02, reflecting prudent financial management. The return on equity has improved to 3.70% in 2024, showing better utilization of shareholder funds, although there is potential for further enhancement.78
Positive
Cash Flow
Free cash flow has fluctuated, with a shift from $3.13M in 2023 to negative $7.45M in 2024, raising concerns about cash generation. Operating cash flow to net income ratio is slightly above 1, indicating adequate cash generation relative to net income, but the free cash flow to net income ratio is negative, suggesting pressure on liquidity.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 179.47M | 165.84M | 148.55M | 111.06M | 88.05M | Gross Profit |
| 125.32M | 114.09M | 100.64M | 66.87M | 51.28M | EBIT |
| 1.83M | -1.13M | -2.09M | -12.63M | -16.79M | EBITDA |
| 7.79M | 8.39M | 6.92M | -6.26M | -9.89M | Net Income Common Stockholders |
| 4.06M | 3.10M | -3.43M | -21.49M | -40.36M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 114.89M | 135.52M | 139.18M | 140.23M | 145.30M | Total Assets |
| 315.29M | 290.14M | 278.67M | 273.77M | 287.58M | Total Debt |
| 5.18M | 6.19M | 7.34M | 7.02M | 8.44M | Net Debt |
| -85.42M | -92.79M | -112.28M | -20.67M | -21.87M | Total Liabilities |
| 69.25M | 61.19M | 68.66M | 54.18M | 53.07M | Stockholders Equity |
| 246.04M | 228.95M | 210.01M | 219.59M | 234.51M |
| Cash Flow | Free Cash Flow | |||
| -7.45M | 3.13M | 23.72M | 190.00K | 14.81M | Operating Cash Flow |
| 9.70M | 14.60M | 32.30M | 4.24M | 21.78M | Investing Cash Flow |
| -5.94M | -28.99M | 84.60M | -4.67M | -150.50M | Financing Cash Flow |
| -11.23M | -5.89M | -24.31M | -5.53M | 64.80M |
PDF Solutions Technical Analysis
Negative
18.84
Price Trends
19.15
Negative
22.49
Negative
26.41
Negative
Market Momentum
0.14
Negative
47.37
Neutral
50.19
Neutral
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 18.84 is below the 20-day moving average (MA) of 19.09, below the 50-day MA of 19.15, and below the 200-day MA of 26.41, indicating a bearish trend. The MACD of 0.14 indicates Negative momentum. The RSI at 47.37 is Neutral, neither overbought nor oversold. The STOCH value of 50.19 is Neutral, 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 3 New Risks
1.
Our significant research and development investment may nonetheless fail to keep pace with technological changes or ensure that our offerings meet market needs, which would adversely impact our business, financial condition, or results of operations. Q4, 2024
2.
We and our third-party service providers are exposed to risks related to information technology infrastructure, information management and protection, cybersecurity threats, and cyber incidents; if we or our third-party providers fail to protect confidential information and/or experience a cyber incident, there may be damage to our brand and reputation, material financial penalties, and legal liability. Q4, 2024
3.
Use of open-source software ("OSS") together with our products exposes us to potential legal liability and could negatively affect our ability to protect our intellectual property, and if support and updates for the OSS that we currently use in providing our products and services is not available to us, our financial results could be negatively impacted. Q4, 2024
PDF Solutions Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $800.92M | ― | -9.00% | ― | 9.30% | 24.96% | |
69 Neutral | $916.60M | 461.79 | 4.15% | ― | 30.64% | ― | |
68 Neutral | $758.92M | 536.19 | 0.60% | ― | 11.75% | -40.76% | |
60 Neutral | $11.56B | 10.24 | -7.04% | 2.94% | 7.46% | -10.54% | |
59 Neutral | $866.13M | ― | 29.80% | ― | 7.97% | 74.22% | |
59 Neutral | $779.64M | ― | -42.20% | ― | 19.58% | 6.58% | |
58 Neutral | $1.04B | ― | 75.95% | ― | -6.81% | 85.11% |
* Technology Sector Average
Performance Comparison
PDFS
PDF Solutions
18.84
-16.80
-47.14%
PRO
PROS Holdings
17.24
-13.44
-43.81%
PRCH
Porch Group
9.51
7.10
294.61%
DSP
Viant Technology
13.90
4.34
45.40%
RSKD
Riskified
4.90
-1.22
-19.93%
WEAV
Weave Communications
9.69
0.88
9.99%
PDF Solutions Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q1-2025)
| % Change Since: -3.88%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Positive
The earnings call reflects a positive outlook for PDF Solutions, with strong revenue growth, successful acquisition integration, and increased enterprise adoption. However, there are concerns about cash reserves and debt levels, as well as a slowdown in analytics revenue growth.Q1-2025 Updates
Positive Updates
Strong Start to Fiscal Year 2025
The first quarter of 2025 was the second largest revenue quarter in PDF Solutions' history, driven by significant bookings primarily for enterprise-wide solutions.
Revenue Growth and Financial Performance
Total revenues for Q1 2025 were $47.8 million, up 16% year-over-year. The company's gross margin increased to 77% from 72% in the same quarter last year.
Acquisition of SecureWise
PDF Solutions completed a $130 million acquisition of SecureWise, expected to be accretive to earnings and operating margins.
Sapiens Manufacturing Hub Success
The Sapiens Manufacturing Hub Enterprise platform secured a large contract, reflecting strong enterprise adoption.
Net Income and Earnings Per Share Growth
Net income for the quarter increased to $8.1 million, or 21¢ per share, representing a 40% year-over-year increase.
Negative Updates
Cash and Debt Position
Cash, cash equivalents, and short-term investments decreased to $54 million from $115 million in the prior quarter, primarily due to the SecureWise acquisition and investment in Eprobe machines. The company also took on $70 million in bank debt.
Analytics Revenue Growth Slows
Analytics revenue grew by only 10% year-over-year, which is a deceleration compared to previous growth rates.
Potential Tariff Impacts
Tariffs could impact the cost of components shipped into the US for the EProbe, although the financial impact is expected to be modest.
Company Guidance
During the PDF Solutions, Inc. conference call, the company provided guidance for 2025 with an anticipated revenue growth of 21% to 23% compared to 2024. The first quarter of 2025 marked a strong start, being the second-largest revenue quarter in the company's history, driven by significant bookings for enterprise-wide solutions and the Sapiens Manufacturing Hub Enterprise. Analytics revenue increased by 10% year-over-year, while IYR revenue surged by 86%. The gross margin improved to 77%, up from 72% in the previous quarter, and the operating margin remained at 18%. The company completed the $130 million SecureWise acquisition, contributing to its growth strategy. Despite macroeconomic uncertainties, PDF Solutions expects continued revenue growth, underpinned by strong demand for advanced node capabilities and AI-driven innovations.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.