Why Valens Semiconductor Stock Soared Today

Valens Semiconductor (NYSE: VLN) stock surged on Wednesday following the release of the company's first-quarter results. The company's share price ended the day up 9.3% and had been up as much as 13.7% earlier in trading.

Valens published its Q1 results before the market opened today, reporting sales and earnings for the period that topped Wall Street's expectations. The company also issued promising guidance for the current quarter.

Valens pops on Q1 beats

In the first quarter, Valens recorded a non-GAAP (adjusted) loss of $0.05 per share on sales of $16.86 million. The company's loss per share was $0.01 lower than the average analyst estimate's target, and sales for the period beat the average target by roughly $0.39 million. Revenue was essentially flat on a year-over-year basis, and the company's adjusted loss per share expanded from $0.03 in the prior-year period.

On a segment basis, cross-industry business declined to $11 million from $11.7 million in last year's quarter and accounted for roughly 65% of overall sales. Automotive segment revenues increased to $5.9 million from $5.1 million in last year's quarter and accounted for the remainder of revenue.

What's next for Valens?

For the current quarter, Valens is guiding for sales to come in between $17.2 million and $17.6 million. Meanwhile, management is targeting a gross margin between 60% and 62% and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) between -$4.4million and -$4.9 million. With its automotive segment delivering now seemingly meaningful growth, the company's performance outlook could be strengthened.

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.