The stock rose about 9 percent today, its second straight day of gains, and has now recovered much of its slide from late July. We think this is mostly about anticipation for Monday's earnings report and a recent deal to bring new Bluetooth audio chips to market.
Our view
The business is making the right moves into the AI chip market, but the stock price already reflects a lot of that future growth. If you've been thinking about buying, we'd wait to see if the company can turn its designs into more consistent royalty checks first.
New Bluetooth audio chips launched with Actions Technology
The company is working with Actions Technology to launch a new series of wireless audio chips. These chips use the company's Bluetooth platform to handle high-speed data, which is necessary for high-definition sound in wireless headphones and speakers.
This is an expansion of a long-term partnership that has already put more than 100 million chips into devices. For a company that makes money by licensing its blueprints and then collecting a small fee for every chip sold, this launch is a clear path toward the royalty growth it needs to see.
A recent filing shows a change in the company's executive team or its board of directors. These filings are standard when a leader joins, leaves, or changes roles within the firm.
Leadership changes at this level can signal a shift in strategy or simply be part of a planned transition. We will look for more details in the upcoming quarterly report to see how this move affects the company's focus on its chip-design business.
Stifel Nicolaus analysts set a price target of $50 for the stock. This target is well above the current price of about $34, showing they expect the business to grow as it shifts toward AI and wireless connectivity designs. While price targets are just estimates of what a stock might be worth in a year, this call reflects confidence that the company can successfully turn its chip blueprints into higher royalty payments.
Analysts have steadily raised their price targets following the company's first-quarter earnings report. Most analysts rate the stock a buy, and the average target of $47 suggests the price could rise another 22%.
Average target$47+22%vs $38.67 today
TodayAvg price
Low $40High $55
Strong Buy26 analysts
0Bearish
4Neutral
22Bullish
FirmRatingPrice TargetDate
Stifel Nicolaus
Buy
$50
7/10/2026
Needham
Buy
$55
6/15/2026
UBS
Buy
$42→$48
5/12/2026
Oppenheimer
Outperform
$30→$42
5/12/2026
Stifel Nicolaus
Buy
$30→$42
5/12/2026
Roth Capital
Buy
$35→$40
5/11/2026
UBS
Buy
$27→$42
5/4/2026
Oppenheimer
Outperform
$33→$30
2/18/2026
Stifel Nicolaus
Buy
$30
2/10/2026
Loop Capital Markets
Buy
$28
12/1/2025
CEVA earnings
Management has a very reliable habit of clearing the bar, beating analyst profit targets in seven of the last eight quarters. This suggests they are disciplined about setting expectations they can meet.
Earnings history
EstimateBeatMiss
CEVA past earnings results
Expected
Actual
Surprise
EPS
$0.02
$0.04
+100.0%
Revenue
$26M
$27M
+3.5%
Key highlights
Licensing hits multiyear high: Licensing and related revenue grew 18% to $17.8 million, the highest level in three years, as customers paid more for complex system designs. This growth suggests strong demand for the company's blueprints even before products reach the manufacturing stage.
AI adoption milestones reached: Artificial intelligence technology now makes up 20% of licensing revenue and reached a key production milestone as it was included in the 2026 Toyota RAV4. Getting into mass production vehicles is a critical step because it creates a predictable stream of royalty payments for years to come.
Smart edge royalties growing: Royalties from smart edge devices, which are gadgets like smart watches and home sensors, rose 8% while total royalty revenue stayed flat at $9.2 million. The growth in newer categories like Wi-Fi and automotive AI is helping to balance out weakness in the older smartphone market.
Focus on profitability improvement: Management stated they are implementing measures to manage higher expenses caused by a weaker U.S. dollar to protect their profit margins. While the company reported a non-GAAP operating income of $0.5 million, which is the profit from its core business, they are still working to offset rising research and development costs.
Outlook for future growth: The company expects its expansion into integrated solutions and its role in 21 billion total devices shipped to drive revenue and profitability for the rest of 2026. This strategy aims to increase the dollar value Ceva earns from every chip that uses its designs.
Our take: A solid quarter that shows the plan to move beyond simple chips is working. While total royalties were flat, the record licensing revenue and the win with Toyota demonstrate that Ceva is winning the right kind of high-value business. It remains a slow climb to the 20% margin goal, but the direction is encouraging.
CEVA’s next earnings date
Q2 2026
AUG
10
Expectation
EPS
$0.07
Revenue
$28M
Metrics we are tracking
Metric
Expectations
Status
Royalty Revenue Growth
Sustaining above 15% year-over-year for four consecutive quarters
0% YoY in Q1 2026
AI Licensing Mix
Climbing above 35% of total licensing and related revenue
20% in Q1 2026
Non-GAAP Operating Margin
Expanding toward the 20% target as revenue grows
1.9% in Q1 2026
Total Devices Shipped
Exceeding 2.5 billion units shipped annually
21 billion lifetime as of Q1 2026
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