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

CEVA shares dropped 18.7% over the past month despite beating second-quarter earnings estimates and posting 13% revenue growth. The stock hit a 52-week high of $51.60 in June but has since pulled back as investors took profits following the AI-driven rally.

The company reported Q2 earnings of 8 cents per share, topping the 7-cent consensus estimate, while revenue climbed to $29 million. The beat failed to sustain momentum, however, as valuation concerns took center stage.

CEVA currently trades at 5.66 times forward sales, a significant premium to its sub-industry average of 4.04 times. Zacks Investment Research maintains a Hold rating on the stock, citing the disconnect between growth prospects and current valuation levels.

The selloff reflects a broader pattern of profit-taking in AI-related names that surged earlier this year. CEVA's premium valuation leaves little room for error, even as the company continues to post solid operational results.