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Pixelworks (PXLW)
:PXLW
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Pixelworks
(NASDAQ:PXLW)
Select Model
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Rating:55Neutral
Price Target:
$14.50
▲(12.93% Upside)
The overall stock score of 55 reflects significant financial challenges, including negative profit margins and cash flow issues, which are the most impactful factors. While technical analysis shows positive momentum, the valuation remains unattractive due to negative earnings. The earnings call provided a balanced view with some positive developments, but ongoing losses and cash flow concerns weigh heavily on the score.
Positive Factors
Strategic Partnerships
The partnership with realme for the P4 series demonstrates Pixelworks' ability to integrate its technology into new products, potentially expanding its market reach and enhancing revenue streams in the mobile segment.
Cash Subsidies
The cash subsidies from China's Little Giant program provide financial support, helping to offset operational costs and improve the subsidiary's path to profitability, enhancing the company's financial stability.
Revenue Growth in Home and Enterprise
The significant sequential growth in the home and enterprise segment indicates strong demand and successful market penetration, which can contribute to overall revenue stability and growth.
Negative Factors
Negative Profit Margins
The persistent negative profit margins and declining revenue highlight ongoing operational inefficiencies and financial challenges, threatening long-term profitability and sustainability.
Solvency Risks
Negative stockholders' equity and high leverage ratios suggest solvency risks, which could limit the company's ability to invest in growth opportunities and manage financial obligations.
Cash Flow Challenges
Negative cash flows indicate difficulties in generating sufficient cash from operations, which could constrain the company's ability to fund its operations and strategic initiatives.
Pixelworks (PXLW) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$80.81M
Dividend YieldN/A
Average Volume (3M)216.11K
Price to Earnings (P/E)―
Beta (1Y)1.34
Revenue Growth-44.05%
EPS Growth-2.33%
CountryUS
Employees196
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)-1.00
Shares Outstanding6,293,545
10 Day Avg. Volume323,301
30 Day Avg. Volume216,108
Financial Highlights & Ratios
PEG Ratio-4.18
Price to Book (P/B)-48.35
Price to Sales (P/S)11.83
P/FCF Ratio-21.68
Enterprise Value/Market Cap0.95
Enterprise Value/Revenue2.27
Enterprise Value/Gross Profit4.51
Enterprise Value/Ebitda-3.09
Forecast
1Y Price Target
$11.67Price Target Upside-9.11% Downside
Rating ConsensusStrong Buy
Number of Analyst Covering3
Pixelworks Business Overview & Revenue Model
Company DescriptionPixelworks, Inc., together with its subsidiaries, develops and markets semiconductor and software solutions for mobile, home entertainment, content, and business and education markets. The company provides video display processor products, including image processor integrated circuits, such as embedded microprocessors, digital signal processing technology, and software that control the operations and signal processing within high-end display systems; video co-processor integrated circuits that work with an image processor to post-process video signals to enhance the performance or feature set of the overall video solution; and transcoder integrated circuits, which comprise embedded microprocessors, digital signal processing technology, and software that control the operations and signal processing for converting bitrates, resolutions, and codecs. As of March 31, 2022, it had an intellectual property portfolio of 334 patents related to the visual display of digital image data. The company sells its through a direct sales force, distributors, and manufacturers' representatives in Japan, China, Taiwan, the United States, Europe, and Korea. Pixelworks, Inc. was incorporated in 1997 and is based in Portland, Oregon.
How the Company Makes MoneyPixelworks generates revenue primarily through the sale of its proprietary semiconductor products and software solutions. The company offers a range of products, including video processors and display controllers, which are integrated into various consumer electronics by original equipment manufacturers (OEMs). Key revenue streams include direct sales to OEMs, licensing agreements for its technology, and royalties from products that incorporate Pixelworks' innovations. The company has established significant partnerships with major brands in the consumer electronics industry, contributing to its earnings through collaborative development projects and integration of its technologies into high-demand devices. Additionally, as the demand for enhanced video experiences continues to grow, Pixelworks benefits from trends in the gaming and streaming markets, which require advanced video processing capabilities.
Pixelworks Earnings Call Summary
Earnings Call Date:Aug 12, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 11, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mix of positive developments and ongoing challenges. The company experienced sequential revenue growth, improved gross margins, and reduced operating expenses. However, it faced decreased gross profit margins, a continued net loss, and a delayed recovery in mobile revenue. Overall, the highlights and lowlights were relatively balanced.Q2-2025 Updates
Positive Updates
Sequential Revenue Growth
The company reported top and bottom line results that were within guidance and reflected expectations for a return to sequential revenue growth in the second quarter.
Improved Gross Margin
Gross margin came in better than anticipated due to yield improvements on a ramping new co-development projector SoC.
Reduced Operating Expenses
Second quarter operating expenses decreased to below $10 million, a reduction of more than $3 million year-over-year.
TrueCut Motion Achievements
TrueCut Motion platform was accredited with 3 new theatrical releases and titles using TrueCut Motion have achieved over $4 billion at the box office.
New Mobile Launch
OPPO's affiliate brand, realme, previewed their upcoming launch of the realme P4 series, the first phones in the segment to feature dual chips based on Pixelworks' X7 Gen 2 visual processor.
Home and Enterprise Revenue Increase
Revenue increased by over 20% sequentially in the home and enterprise business.
Cash Subsidies for Shanghai Subsidiary
Pixelworks Shanghai subsidiary received approximately $1.6 million in cash subsidies as part of its certified status in China's Little Giant program.
Negative Updates
Decreased Gross Profit Margin
Second quarter non-GAAP gross profit margin was 46%, down from 49.9% in the first quarter of 2025 and 51% in the second quarter of 2024.
Continued Net Loss
Non-GAAP net loss for the second quarter of 2025 was $5.3 million or a loss of $1 per share.
Decreased Cash and Cash Equivalents
The company ended the second quarter with cash and cash equivalents of $14.3 million, down from $18.5 million at the end of the first quarter.
Delayed Mobile Revenue Recovery
Although design-ins for newly launched smartphones have taken longer to materialize, the company remains committed to achieving renewed mobile growth over the coming quarters.
Lower Revenue from Mobile
Revenue from the mobile segment was approximately $1.2 million, indicating lower performance compared to other segments.
Company Guidance
In the second quarter of 2025, Pixelworks reported financial results that aligned with its guidance, showcasing a return to sequential revenue growth. The company achieved revenue of $8.3 million, with home and enterprise revenue reaching approximately $7.1 million and mobile revenue at $1.2 million. Gross margin exceeded expectations due to yield improvements, coming in at 46%, despite a unique product mix. Operating expenses decreased significantly by over $3 million year-over-year to $9.7 million, aided by $1.6 million in subsidies from China's Little Giant program. The net loss was $5.3 million, or $1 per share, improved from the previous quarter's $6.5 million loss. For the third quarter, Pixelworks anticipates revenue between $8.5 million and $9.5 million, with a gross margin of 47% to 49% and operating expenses in the range of $8.5 million to $9.5 million. The company continues to focus on strategic realignments and anticipates its Shanghai subsidiary to reach profitability by the fourth quarter.Pixelworks Financial Statement Overview
Summary
Pixelworks is facing significant financial difficulties with declining revenues, negative profitability margins, and a deteriorating balance sheet with negative equity. Cash flow management is a critical concern as the company continues to operate with insufficient cash generation.Income Statement
Pixelworks has been experiencing declining revenue over the years, with a notable drop in Total Revenue for the TTM (Trailing-Twelve-Months) period compared to previous years. The company has a negative Gross Profit Margin and Net Profit Margin, indicating operational inefficiencies and consistent losses. There is a significant negative EBIT and EBITDA margin, further reflecting the challenges in achieving profitability.35
Negative
Balance Sheet
The balance sheet reveals high financial risk with a negative Stockholders' Equity, suggesting that liabilities exceed assets and shareholder value is eroded. The Debt-to-Equity ratio is not calculable due to negative equity, but the overall financial position is weak with declining asset base and increasing liabilities.25
Negative
Cash Flow
Operating Cash Flow is negative, indicating that the company is not generating enough cash to sustain operations from its core activities. The Free Cash Flow is also negative and has worsened over time, highlighting cash management issues. The ratios of Operating and Free Cash Flow to Net Income are not meaningful due to negative figures, showcasing cash flow challenges.30
Negative
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 33.96M | 43.21M | 59.68M | 70.15M | 55.10M | 40.85M |
| Gross Profit | 17.08M | 22.29M | 25.71M | 35.88M | 27.69M | 20.05M |
| EBITDA | -24.96M | -25.21M | -22.27M | -11.32M | -15.24M | -20.46M |
| Net Income | -27.97M | -28.72M | -26.18M | -16.03M | -19.82M | -26.53M |
Balance Sheet | ||||||
| Total Assets | 51.80M | 64.07M | 95.97M | 102.32M | 106.60M | 72.04M |
| Cash, Cash Equivalents and Short-Term Investments | 14.26M | 23.65M | 47.54M | 56.82M | 61.59M | 31.51M |
| Total Debt | 910.00K | 3.49M | 4.95M | 3.54M | 5.29M | 7.13M |
| Total Liabilities | 23.45M | 24.19M | 30.96M | 30.07M | 35.47M | 19.17M |
| Stockholders Equity | -22.44M | -10.57M | 12.54M | 32.42M | 40.22M | 52.87M |
Cash Flow | ||||||
| Free Cash Flow | -25.82M | -23.57M | -22.65M | -15.84M | -12.63M | -6.50M |
| Operating Cash Flow | -24.68M | -19.81M | -18.81M | -12.83M | -9.16M | -3.71M |
| Investing Cash Flow | 261.00K | -3.12M | -3.99M | -3.01M | -3.23M | 3.94M |
| Financing Cash Flow | 853.00K | -971.00K | 13.53M | 11.07M | 42.71M | 23.77M |
Pixelworks Technical Analysis
Positive
12.84
Price Trends
10.17
Positive
8.88
Positive
8.58
Positive
Market Momentum
0.95
Negative
55.99
Neutral
74.94
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PXLW, the sentiment is Positive. The current price of 12.84 is above the 20-day moving average (MA) of 11.38, above the 50-day MA of 10.17, and above the 200-day MA of 8.58, indicating a bullish trend. The MACD of 0.95 indicates Negative momentum. The RSI at 55.99 is Neutral, neither overbought nor oversold. The STOCH value of 74.94 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PXLW.
Pixelworks Risk Analysis
Pixelworks disclosed 56 risk factors in its most recent earnings report. Pixelworks reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Pixelworks Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
56 Neutral | $132.65M | ― | -36.97% | ― | 6.14% | 1.71% | |
55 Neutral | $80.81M | ― | -2911.20% | ― | -44.05% | -2.33% | |
55 Neutral | $100.53M | ― | -28.91% | ― | -25.90% | -459.91% | |
49 Neutral | $107.77M | ― | -7.81% | ― | 4.09% | 9.30% | |
47 Neutral | $122.81M | ― | -21.44% | ― | ― | ― | |
46 Neutral | $79.32M | ― | 17.45% | ― | 28.31% | -239.16% |
* Technology Sector Average
PXLW
Pixelworks
12.84
1.82
16.52%
GSIT
GSI Technology
4.83
1.22
33.80%
MX
MagnaChip
3.05
-1.71
-35.92%
QUIK
QuickLogic
6.65
-2.41
-26.60%
GCTS
GCT Semiconductor Holding
1.47
-0.88
-37.45%
NA
Nano Labs Ltd. Sponsored ADR Class A
5.38
-2.52
-31.90%
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.