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Arteris Inc

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Arteris Inc AI Insights

Informational only. Not investment advice.
As of 2025-12-18

Snapshot

  • Gross margin 90% TTM vs industry median 42% - IP licensing model with minimal COGS (6.6M on 65.9M revenue)[Gross Margin]
  • Negative equity (-11.4M) with liabilities 119M exceeding assets 108M - balance sheet underwater despite 646M market cap[Total Equity]
  • R&D spend 73% of revenue (48.2M TTM) vs industry median 11% - heavy investment phase burning cash[Research and Development]

Watch Triggers

  • Operating Margin: Improves from -48% toward -20%Would signal operating leverage kicking in; current trajectory unsustainable
  • Cash and Equivalents: Falls below 10M or company announces financing17.4M cash with -372K FCF gives ~2 years runway; dilution risk
  • Total Revenue TTM: Accelerates above 25% YoY growthCurrent 11% 3Y CAGR insufficient to reach profitability at current cost structure

Bull Case

90% gross margin IP licensing model with 22% 5Y revenue CAGR (vs industry 5%) positions for operating leverage once scale achieved

Gross MarginTotal Revenue 5Y Growth

Minimal capex needs (-1.3M TTM) mean incremental revenue drops to bottom line; asset-light model requires little reinvestment

Capital ExpenditurePPE

Bear Case

Negative equity (-11.4M) and negative working capital (-5.7M) create financing risk; may need dilutive equity raise

Total EquityWorking CapitalCash and Equivalents

P/S ratio 9.8x vs industry median 3.0x prices in growth that hasn't materialized into profits after years of losses

PS RatioNet IncomeEPS

Bull vs Bear Balance

AI-generated sentiment analysis based on fundamental metrics and market conditions.

BearBull
35%

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Forward Thesis

Path to profitability requires 50%+ revenue growth without proportional opex increase

1-3ylow
  • Operating loss -31.8M on 65.9M revenue TTM
  • R&D at 48.2M unlikely to scale down given competitive IP market
  • Gross margin already optimized at 90%
5Y revenue CAGR 22% but losses persistFCF negative -372K TTM despite 932K operating cashNo dividend capacity, negative equity

Valuation Context

Caveats

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Fundamental company data provided by Morningstar, updated daily.

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