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what it is
PDF Solutions sells software, services, and tools that help chipmakers find problems faster and waste fewer wafers.
how it gets paid
Last year Pdf Solutions made $219M in revenue. Analytics software and data platform was the main engine at $87.6M, or 40% of sales.
why it's growing
Full-year revenue grew about 22% last year; the latest reported quarter can show a much larger vs. prior year jump (e.g., ~174%) when the comparison base is distorted—use the filing tables, not two unrelated percentages.
what just happened
In the latest reported quarter, revenue was ~$157M (not the ~$219M full-year total on the bridge), but EPS slipped to -$0.02—the part your stock chart cares about.
At a glance
B+ balance sheet — decent shape, but not bulletproof
30/100 earnings predictability — expect surprises
398.4x trailing p/e — you're paying up for this one
1.6% return on capital — nothing to write home about
$0.10 fy2024 eps est
xvary composite: 55/100 — below average
What they do
PDF Solutions sells software, services, and tools that help chipmakers find problems faster and waste fewer wafers.
PDF sits in the ugliest part of chipmaking: yield (how many chips per wafer actually work → so what: tiny process gains can save customers real money). Once your design, equipment, manufacturing, and test data are wired into one system, ripping it out mid-ramp is a great way to learn what delays cost. The proof is the economics: gross margin was 72.1% in the latest filing, which says customers are paying for hard-to-replace insight, not cheap software.
How they make money
$219M
annual revenue · their business grew +22.0% last year
Analytics software and data platform
$87.6M
+15.9%
Integrated Yield Ramp programs
$65.7M
+22.0%
Professional services
$32.9M
+9.0%
Electrical measurement hardware tools
$21.9M
+9.0%
IP and gainshare royalties
$10.9M
flat
The products that matter
improves chip manufacturing yield
Yield Management Software
core business · supports $219M revenue
it's the core of a $219M revenue business, helping semiconductor customers get more good chips out of expensive fabs. That matters because operating profit is still only mid‑single digits as a percent of sales (~5.8% operating margin in this snapshot).
core revenue engine
predictive and ai-led analytics
AI-Driven Analytics
management tied it to 20% growth
management pointed to this demand when it laid out a 20% 2026 growth target. That matters because a stock at 398.4x trailing earnings does not get much room for a slower story.
growth narrative
Key numbers
398.4x
trailing p/e
P/E (price-to-earnings) → how much investors pay for each dollar of profit → so what: you are paying luxury pricing for a business with $0.10 estimated 2024 EPS.
5.8%
operating margin
Operating margin → profit left after running the business → so what: every $100 of sales produced just $5.80 in operating profit.
$70M
long-term debt
Long-term debt → money owed over many years → so what: at 5% of capital, leverage is a small balance-sheet issue compared with the valuation risk.
1.6%
return on capital
Return on capital → profit generated from the money tied up in the business → so what: the current return is weak for a stock priced like a fast compounding machine.
Financial health
B+
strength
- balance sheet grade B+ — solid but not elite
- risk rank 3 — safer than 50% of stocks
- price stability 25 / 100
- long-term debt $70M (5% of capital)
B+ — functional but not a standout on the balance sheet.
Total return vs. market
Return history isn't available for PDFS right now.
source: institutional data · return history unavailable
What just happened
missed estimates
Revenue hit $157M, but EPS slipped to -$0.02, which is the part your stock chart cares about.
The reported quarter showed very large vs. prior year revenue growth versus an easy base, while gross margin was 72.1%. The tension is high gross profit versus still-thin operating and net conversion—tie each line item to the same period in the 10-Q.
~$157M
revenue (q)
-$0.02
eps (q)
72.1%
gross margin
the number that mattered
72.1% gross margin matters most because it shows the software mix is attractive even while EPS stays thin.
source: company earnings report, 2026
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What could go wrong
The #1 risk is missing the 20% 2026 revenue growth target while carrying a 398.4x trailing p/e.
med
valuation is doing most of the heavy lifting
A 398.4x trailing p/e on tiny trailing GAAP EPS and a ~5.8% operating margin do not leave much room for disappointment. You are paying today for earnings that have not arrived yet.
If growth cools before margins improve, the multiple has far more to lose than current profits have to defend it.
med
semiconductor spending can turn quickly
PDF Solutions sells into the chip manufacturing ecosystem. That means customer demand depends on fab activity and industry investment staying healthy enough to support the company's 20% 2026 target.
A slower capex environment would pressure the growth narrative tied to a $219M revenue base.
med
gross margin is strong, but operating leverage is still missing
72.1% gross margin says the product should scale well. A ~5.8% operating margin still says most of that gross profit is getting consumed before it hits the bottom line.
If revenue keeps growing without meaningful margin expansion, the stock stays expensive for longer than investors will tolerate.
The combined risk picture is simple: this is a $219M revenue company with software-like gross margin, low current profitability, and a valuation that assumes the 20% 2026 growth target lands more or less on time.
source: institutional data · regulatory filings · risk analysis
Pay attention to
metric
20% 2026 revenue growth target
This is the promise the market is paying for. If quarterly revenue starts drifting below that pace, the stock will feel it before the income statement does.
risk
~5.8% operating margin
High gross margin with thin operating profit is the contradiction here. You want to see more of that 72.1% gross margin survive the trip down the statement.
trend
street target range: $33.33 to $37.80
The consensus target is $35.44, above today's $31.87 price but not dramatically so. That spread says analysts see upside, just not the kind that cancels valuation risk.
calendar
next earnings check on guidance credibility
After a $0.30 EPS beat and $62.4M quarter, the next report matters less for the headline beat and more for whether 2026 still looks like a 20% growth year.
Analyst rankings
earnings predictability
30 / 100
Low predictability means quarterly results can move around more than you would like. In human-speak, analysts do not view this as a smooth earnings story.
price stability
25 / 100
The stock has been volatile. In human-speak, you should expect a bumpier ride here than you would get from a mature software name.
risk rank
3
Risk rank 3 translates to middle-of-the-pack balance-sheet risk. Safer than the speculative fringe, but not the kind of stock you forget about for six months.
source: institutional data
Institutional activity
institutional ownership data for PDFS is being compiled.
source: institutional data
Price targets
3-5 year target range
n/a
n/a
$32
current price
n/a
target midpoint · n/a from current
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