CEVA Stock Slides 19% in a Month: Should You Buy the Dip or Wait?

Shares of Ceva, Inc. CEVA have declined 18.7% over the past month against the Zacks Internet-Software industry's growth of 7.9%. The stock has lagged the Zacks Computer and Technology sector's 2.4% uptick over the same period.

CEVA has underperformed fellow sectoral players, Synopsys SNPS and Cadence Design Systems CDNS. Shares of Synopsys have performed well, gaining in excess of 12%, while Cadence Design Systems’ shares have inched up marginally over the past month.

1-Month Price Comparison

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The decline in CEVA stock, after a stupendous showing earlier in the year mainly due to the hype surrounding artificial intelligence, can be attributed to profit-booking. CEVA, currently trading at a tad above $27 per share, had hit a 52-week high of $51.6 in June owing to the AI hype.

Given the pullback in CEVA’s shares currently, investors might be tempted to snap up the stock. But is this the right time to buy CEVA? Let's find out.

Investors Unimpressed by CEVA’s Q2 Outperformance

Last month, Ceva reported earnings (excluding 18 cents from non-recurring items) of 8 cents per share in the second quarter of 2026, edging past the Zacks Consensus Estimate of 7 cents. The company reported earnings of 7 cents per share a year ago. 

The positive earnings surprise was the fourth successive one by the semiconductor intellectual property company. The average earnings beat is 31.1%.

Ceva, Inc. Price and EPS Surprise

Ceva, Inc. price-eps-surprise | Ceva, Inc. Quote

Revenues of $29 million surpassed the Zacks Consensus Estimate of $28.2 million and also increased 13% year over year. Licensing and related revenues increased 21% year over year to $18.2 million, reaching the highest level in three years.

Adjusted operating income increased to $3.1 million in the quarter, representing an operating margin of 11%. This improved significantly from the year-ago figures of $0.8 million and 3%, respectively.

During the June quarter of 2026, royalty revenues came in at $10.8 million, up 1% year over year and 17% sequentially. This uptick was supported by strong wireless connectivity shipments, continued ramp of automotive AI programs and improving smartphone royalties.

The June quarter saw Ceva secure 10 intellectual property licensing agreements, including two with new customers. Two of the agreements were also signed directly with original equipment manufacturers, expanding Ceva's relationships further into the end markets using its technology. Additional connectivity agreements were signed with customers across the United States, Europe, China and the broader Asia-Pacific.

However, the above developments failed to please investors who were probably looking for more than a marginal earnings and revenue beat.

What Do Estimates Say for CEVA?

The Zacks Consensus Estimate for 2026 and 2027 revenues implies year-over-year growth of 13.8% and 11.8%, respectively. The consensus mark for 2026 and 2027 bottom line implies a year-over-year improvement of 31% and 41.1%, respectively. See below how the earnings estimates for the current quarter, next quarter, full-year 2026 and 2027 have been revised over the past 60 days.

Image Source: Zacks Investment Research

Ceva’s Shares Are Expensive

Ceva trades at 5.66X forward 12-month sales, above the 4.04X multiple for the Zacks sub-industry and its own five-year median of 5.04X. Its Value Score of F reinforces the valuation challenge. Synopsys and Cadence Design Systems both have a Value Score of F.

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Don’t Buy Ceva Now

Ceva benefits from the convergence of Edge AI and wireless connectivity, driven by rising system complexity and growing demand for integrated solutions. This positioning aligns with expanding Edge AI adoption, stronger Wi-Fi and Bluetooth deployments, and increasing AI content across Smart Edge, IoT, industrial and automotive markets.

The impressive earnings-surprise history is another tailwind for Ceva, which powers the Smart Edge, bridging the digital and physical worlds to bring AI-driven products to life.

Ceva currently carries a Zacks Rank #3 (Hold). Its Growth Score of A and Momentum Score of B point to favorable growth and price-trend characteristics, but the Value Score of F is a clear offset. The VGM Score of C also suggests a mixed overall Style Score profile.

The combination supports patience rather than an aggressive entry. Despite its impressive growth profile and the recent price dip, investors may want to see continued execution and better alignment between growth and valuation before taking a more constructive view.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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