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1. Company Snapshot

1.a. Company Description

Valens Semiconductor Ltd.engages in the provision of semiconductor products that enables high-speed video and data transmission for the audio-video and automotive industries.It offers HDBaseT technology, which enables the simultaneous delivery of ultra-high-definition digital video and audio, Ethernet, USB, control signals, and power through a single long-reach cable.


The company offers audio-video solutions for the enterprise, education, digital signage, medical and residential, and industrial markets; and automotive solutions, which provide chipsets that support advanced driver-assistance systems, automated driving systems, infotainment, telecommunications, and basic connectivity.It serves customers through distributors and representatives in Israel, China, Hong Kong, the United States, Mexico, Japan, and internationally.The company was incorporated in 2006 and is headquartered in Hod Hasharon, Israel.

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1.b. Last Insights on VLN

Here is a 90-word analysis of the negative drivers behind Valens Semiconductor Ltd.'s recent stock performance: Valens Semiconductor's recent performance was negatively driven by concerns over its Q4 2024 results, which, although exceeding revenue guidance, showed a gross margin of 60.4% GAAP, lower than expected. The company's failure to provide a clear outlook for 2025 may have contributed to investor uncertainty. Additionally, the recent initiation of coverage by Stonegate Capital Partners may have brought attention to the company's valuation, potentially leading to a reevaluation by investors.

1.c. Company Highlights

2. Valens Semiconductor's Q3 2025 Earnings: A Strong Beat

Valens Semiconductor reported a robust Q3 2025, with revenue reaching $17.3 million, significantly above the guided range. The company's cross-industry business unit drove the growth, accounting for 75% of total revenues. Gross margin stood at 63%, while adjusted EBITDA loss was $4.3 million, better than expected. The actual EPS loss was $0.04, narrower than the estimated loss of $0.07. As Guy Nathanzon, CFO, mentioned, "We generated Q3 revenue of $17.3 million, exceeding our guidance range."

Publication Date: Nov -21

📋 Highlights
  • Leadership Transition:: Johann Stalinger assumes CEO role, succeeding Gideon Ben-Zvi, who will stay on the board.
  • Q3 Revenue Growth:: Revenue reached $17.3M, surpassing guidance, with Q4 projected at $18.2M–$18.9M, marking 7th consecutive growth quarter.
  • Cross-Industry Dominance:: Generated $13.2M (75% of total revenue), driven by VF3000 chipset and VX6320 USB 3 extension adoption.
  • Medical Innovations:: Three OEMs launched V7000-based endoscopies, including the first disposable 4K colonoscopy, with growth potential from single-use trends.
  • Adjusted EBITDA Improvement:: Loss narrowed to $4.3M in Q3, better than guidance, with Q4 guidance of $4.6M–$4.2M loss, reflecting margin stabilization efforts.

Revenue Growth and Guidance

The company expects to continue its growth momentum, with Q4 2025 revenue guidance in the range of $18.2 million to $18.9 million, representing a seventh consecutive quarter of growth. For full-year 2025, revenue is expected to be between $69.4 million and $70.1 million. Analysts estimate next year's revenue growth at 12.1%, indicating a positive outlook.

Segment Performance

The cross-industry business unit, covering Industrial Machine Vision, medical, and traditional professional audio-video, delivered $13.2 million in revenue. The automotive segment contributed $4.1 million. Valens Semiconductor is making strides in its target markets, with its VA7000 chipset powering the MiP A5 platform and its V7000-based endoscopies gaining traction.

Valuation Metrics

To understand what's priced in, we can look at the company's valuation metrics. The P/S Ratio stands at 2.22, while the EV/EBITDA is -3.36. The ROE is -24.81%, and the ROIC is -30.62%. These metrics indicate that the market is pricing in significant growth potential, but also acknowledges the company's current losses.

Outlook and Conclusion

3. NewsRoom

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Valens Semiconductor and Imavix Engineering Combine to Offer the First MIPI A-PHY-Based Platform for Machine Vision; CIS Corporation Announces the Industry's First A-PHY-Compliant Camera, Integrating the Valens VA7000 Chipset

Dec -02

Source: prnewswire.com

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Stonegate Capital Partners Updates Coverage on Valens Semiconductor Ltd. (VLN) Q3 25

Nov -12

Source: newsfilecorp.com

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Valens Semiconductor Ltd. (VLN) Q3 2025 Earnings Call Transcript

Nov -12

Source: seekingalpha.com

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Valens Semiconductor Reports Third Quarter 2025 Results

Nov -12

Source: prnewswire.com

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Global OEMs Will Launch First VA7000-Based Endoscopes, Signaling Strong Momentum for Valens Semiconductor's Medical Imaging Offering

Nov -10

Source: prnewswire.com

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Valens Semiconductor to Participate in the 14th Annual ROTH Technology Conference

Nov -04

Source: prnewswire.com

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Valens Semiconductor Appoints Yoram Salinger as Chief Executive Officer

Nov -03

Source: prnewswire.com

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22nd Century Launches VLN® with Major C-Store Chain, New Marketing Collateral, Continues to Expand State Authorizations

Oct -23

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (14.13%)

6. Segments

Audio-Video

Expected Growth: 16.8%

The 16.8% growth in Audio-Video from Valens Semiconductor Ltd. is driven by increasing demand for high-speed connectivity in automotive and consumer electronics, adoption of advanced audio-video technologies such as HDMI and DisplayPort, and growing need for high-bandwidth data transmission in emerging applications like augmented and virtual reality.

Automotive

Expected Growth: 8.5%

Valens Semiconductor's 8.5% growth in Automotive is driven by increasing demand for advanced driver-assistance systems (ADAS), electrification, and autonomous vehicles. Growing need for high-speed connectivity, sensor fusion, and power management in vehicles fuels demand for Valens' semiconductor solutions, particularly in areas like camera and radar systems, battery management, and infotainment systems.

7. Detailed Products

HMI Solutions

Valens Semiconductor Ltd. offers a range of Human-Machine Interface (HMI) solutions that enable seamless communication between humans and machines. These solutions are designed to provide intuitive and efficient interaction between users and devices.

Audio Codecs

Valens Semiconductor Ltd. provides high-quality audio codecs that enable efficient compression and decompression of audio signals. These codecs are designed to provide crystal-clear audio quality with minimal latency.

MIPI Solutions

Valens Semiconductor Ltd. offers a range of MIPI (Mobile Industry Processor Interface) solutions that enable high-speed data transfer between devices. These solutions are designed to provide low-power, high-bandwidth connectivity.

DisplayPort Solutions

Valens Semiconductor Ltd. provides high-speed DisplayPort solutions that enable fast and reliable data transfer between devices. These solutions are designed to provide high-resolution video and audio transmission.

USB-C Solutions

Valens Semiconductor Ltd. offers a range of USB-C solutions that enable fast and versatile connectivity between devices. These solutions are designed to provide high-speed data transfer, power delivery, and display connectivity.

Automotive Solutions

Valens Semiconductor Ltd. provides a range of automotive solutions that enable high-speed data transfer, audio and video transmission, and power delivery in vehicles.

8. Valens Semiconductor Ltd.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Valens Semiconductor Ltd. operates in a niche market with limited substitutes, but the threat of substitutes is still present due to the evolving nature of the semiconductor industry.

Bargaining Power Of Customers

Valens Semiconductor Ltd. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's products are highly customized, making it difficult for customers to switch to alternative suppliers.

Bargaining Power Of Suppliers

Valens Semiconductor Ltd. relies on a few key suppliers for critical components, which gives these suppliers some bargaining power. However, the company's strong relationships with its suppliers and its ability to negotiate favorable terms mitigate this risk.

Threat Of New Entrants

The semiconductor industry has high barriers to entry, including significant capital expenditures and technological expertise. This makes it difficult for new entrants to compete with established players like Valens Semiconductor Ltd.

Intensity Of Rivalry

The semiconductor industry is highly competitive, with many established players competing for market share. Valens Semiconductor Ltd. must continually innovate and improve its products to maintain its competitive edge.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 1.18%
Debt Cost 3.95%
Equity Weight 98.82%
Equity Cost 5.43%
WACC 5.41%
Leverage 1.19%

11. Quality Control: Valens Semiconductor Ltd. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Navitas Semi

A-Score: 4.3/10

Value: 6.2

Growth: 6.4

Quality: 3.8

Yield: 0.0

Momentum: 9.5

Volatility: 0.0

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Oxford Instruments

A-Score: 4.0/10

Value: 2.3

Growth: 4.7

Quality: 6.2

Yield: 1.2

Momentum: 4.0

Volatility: 5.3

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Seco

A-Score: 3.9/10

Value: 4.3

Growth: 4.9

Quality: 2.8

Yield: 0.0

Momentum: 9.5

Volatility: 2.0

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Alphawave IP

A-Score: 3.6/10

Value: 4.6

Growth: 5.1

Quality: 1.6

Yield: 0.0

Momentum: 9.5

Volatility: 1.0

1-Year Total Return ->

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SEALSQ

A-Score: 3.5/10

Value: 6.2

Growth: 1.3

Quality: 3.4

Yield: 0.0

Momentum: 10.0

Volatility: 0.0

1-Year Total Return ->

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Valens Semi

A-Score: 2.9/10

Value: 7.8

Growth: 4.3

Quality: 4.3

Yield: 0.0

Momentum: 1.0

Volatility: 0.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

1.68$

Current Price

1.68$

Potential

-0.00%

Expected Cash-Flows