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On Wednesday, Northland analysts increased their price target for Arteris , Inc (NASDAQ:AIP) shares from $14.00 to $16.00, while maintaining an Outperform rating on the stock. Currently trading at $10.14, the company has received strong analyst support, with four analysts recently revising earnings estimates upward according to InvestingPro data. The analysts highlighted that Arteris reported revenue that met expectations for the quarter and provided guidance that was in line with forecasts. Despite these on-target figures, the analysts noted that the reported numbers do not fully account for the company’s bookings and the momentum of new product introductions.
Arteris, known for its network-on-chip solutions that facilitate complex system-on-chip designs, has seen bookings of approximately $33.6 million for the quarter, which translates to a book-to-bill ratio of 2.2:1. The company maintains impressive gross profit margins of 89.7%, as reported by InvestingPro. The company’s FlexNoC 5 product was particularly successful, accounting for three-quarters of all interconnect licenses during this period.
The company’s recent announcement of its new product, FlexGen, was a key factor in the revised price target. FlexGen is touted to offer a 30% average selling price (ASP) uplift compared to existing products. Currently, 13 customers are evaluating FlexGen, indicating a strong potential for future revenue growth.
The analysts reaffirmed their Outperform rating, expressing confidence in Arteris’ market position and its ability to capitalize on the new product’s launch. The increased price target reflects the anticipated positive impact of FlexGen on the company’s financial performance.
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