VLN - Valens Semiconductor: 4 Reasons To Sell

2024-03-07 10:37:53 ET

Summary

• While Valens Semiconductor Ltd. management has been guiding for an automotive win for most of 2023, that has been pushed back to 2024.
• Even for 2024, management is no longer guiding for an automotive design win and does not seem confident about it, citing the weak automotive market and lengthening decision process.
• The company has a lack of visibility into its own business for even the first half, highlighting a very uncertain environment for Valens Semiconductor.
• Apart from the automotive market experiencing a cyclical downturn, the audio-video market is also challenged due to weak inventory consumption.
• Valens Semiconductor revenues are expected to decline and only recover to 2023 levels in 2026, with margins deteriorating in the near-term.

After watching the company closely for some time now, I have decided to downgrade Valens Semiconductor Ltd. ( VLN ) to a Sell rating, which I will elaborate in greater detail below....

For further details see: