(CEVA - Snapshot Report
produces earnings surprises and shows well at CES. The stock is Zacks #1 Rank (Strong Buy).
CEVA, Inc., engages in designing and licensing silicon
intellectual property for the handsets, portable
multimedia, and consumer electronics markets primarily in
Europe, the Middle East, and the Asia Pacific.
Earnings Surprises Help
CEVA has had a positive earnings surprise in each of the
last six reporting quarters. The impressive has been the
percent of the surprises. While the smallest beat was only
$0.01, the percentage surprise was 8.3% and the stock moved
10%. On average the surprise percentage has been 22%,
suggesting the company will likely continue to post these
The top line is a slightly different story, as the Zacks
Consensus Estimate has been met in three of the last six
quarters and minimal the beats have been nominal. This
suggests that the analysts have a good handle of the revenue
prospects of the company
What we would like to see is more revenue growth. CEVA has
reported revenue of between $13 million and $15 million in
each of the last four quarters. Revenue for the December
2011 quarter is estimated at $15 million.
Company shows well at CES
A recent report by a covering research analyst noted that
they saw several demos of cell phones that had rich features
including high definition audio and HD video, rich digital
imaging and 3D graphics-rich gaming. These features are the
mainstay's of CEVA's core.
CEVA trades at a premium to the industry on most standard
metrics. The largest premium, as alluded to above, is the
price to sales metric of 11.3x versus a 1.7x industry average.
Trading at 31x forward earnings compared to 13.5x for the
industry also shows how CEVA trades at a rich multiple.
Despite the lofty valuation, when looking at the Price and
Consensus chart, we see that CEVA has seen consistent
earnings growth. There is correlation to expected
outperformance when we see the earnings lines (multi
colored) ahead of the stock price. This is the case CEVA and
the stock is a Zacks #1 Rank (Strong Buy).
Brian Bolan is the Aggressive Growth Stock Strategist for
is also the Editor in charge of the Zacks
Run Investor service