CEVA reported second-quarter revenues/Adj. EPS of $17.1 million/$0.21 versus the Street's $17.1 million/$0.18. Gross margin rose 400bps to 92 percent and total unit shipments grew 9 percent.
"We believe two primary factors are playing out in the space: 1) in a slowing/decking market, higher-end smartphones are looking for more and more levers to pull to lower cost of the device; 2) where we see growth (emerging market low/mid-end smartphones, these devices demand function and low price. Both trends greatly favor CEVA," analyst Andrew Uerkwitz wrote in a note.
CEVA grew LTE market share to 19 percent this year from 5 percent last year, and the analyst expects the trend to continue as each of its customers expand its LTE presence.
"Beyond mobile, CEVA's non-baseband segment continues to gain traction on both royalty and licensing. 2017/2018 are set up nicely as this segment becomes more material," Uerkwitz continued.
The company expects third-quarter revenues/non-GAAP EPS of $17.2 million–$18.2 million/$0.21–$0.23, while full-year 2016 royalty revenue guidance was raised to 35–45 percent year-over-year growth.
Based on continued LTE share gains, the analyst also increased his 2016 estimate for revenue/non-GAAP EPS to $69.2 million/$0.83 from $68.3 million/$0.78.
"We continue to like CEVA's story: LTE growth offsetting 2G shipment decline/pulling up ASPs paired with diversified/rapid growth outside of handset-baseband," Uerkwitz added.
The analyst also raised his price target to $37 from $32.
Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email feedback@benzinga.com with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!© 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
