Hub (HUBC) AI Stock Analysis

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Hub

(NASDAQ:HUBC)

54Neutral

The overall score reflects a company facing significant financial and operational challenges, with some positive signs of operational improvements and strategic shifts. The technical analysis offers some hope for momentum, but valuation concerns and ongoing financial instability weigh heavily.

Hub (HUBC) vs. S&P 500 (SPY)

Market Cap

$9.29M

Dividend YieldN/A

Average Volume (3M)296.32K

Price to Earnings (P/E)―

Beta (1Y)0.16

Revenue GrowthN/A

EPS GrowthN/A

CountryUS

Employees223

SectorTechnology

Sector Strength51

IndustrySoftware - Infrastructure

Share Statistics

EPS (TTM)-2.80

Shares Outstanding3,045,974

10 Day Avg. Volume630,694

30 Day Avg. Volume296,324

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.37

Price to Cash Flow (P/CF)N/A

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Hub Business Overview & Revenue Model

Company DescriptionHub (HUBC) is a company operating in the technology sector, focusing on providing comprehensive solutions in the areas of communication and collaboration. The company offers a range of products and services designed to enhance connectivity and productivity, catering to both individual and enterprise clients. Its core offerings include advanced communication platforms, collaboration tools, and related technology services that facilitate seamless interaction across various devices and networks.

How the Company Makes MoneyHub (HUBC) generates revenue through a combination of subscription-based services and one-time sales of its technology solutions. The company offers different pricing tiers for its communication and collaboration platforms, allowing users to subscribe based on their specific needs and usage levels. In addition to subscription fees, Hub earns income from the sale of software licenses, hardware products, and professional services such as installation, training, and technical support. Significant partnerships with other technology firms and service providers enhance its product offerings and extend its market reach, contributing to its overall revenue growth.

Hub Financial Statement Overview

Summary

Hub Cyber Security faces significant financial challenges, with declining revenues, negative profitability margins, and negative equity, indicating high leverage and financial instability. Despite some cash flow improvements, overall financial health remains a concern.

Income Statement

Neutral

The company has experienced a significant decline in revenue from 2022 to 2023, indicating a revenue growth challenge. The gross profit margin is extremely low, and both EBIT and EBITDA margins are negative, reflecting operating inefficiencies and high costs relative to revenues. Net profit margin is also negative, indicating profitability issues.

Balance Sheet

Negative

The balance sheet shows a negative stockholders' equity, suggesting high leverage and potential financial instability. The debt-to-equity ratio cannot be calculated due to negative equity, and return on equity is negative due to net losses. The equity ratio is negative, indicating the company is heavily reliant on debt financing.

Cash Flow

Neutral

The company has negative operating and free cash flow, indicating cash flow issues. The operating cash flow to net income ratio is slightly better compared to previous years, suggesting some improvement in cash generation relative to net losses. However, the free cash flow to net income ratio remains negative.

TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Breakdown
Income Statement		Total Revenue
15.71M	42.66M	79.74M	33.20M	34.90M	―
	Gross Profit
1.50M	750.00K	6.45M	―	―	―
	EBIT
-15.03M	-77.72M	-79.51M	-13.33M	―	―
	EBITDA
-13.89M	-68.35M	-65.74M	―	―	―
	Net Income Common Stockholders
-27.09M	-87.45M	-81.59M	-13.72M	―	―
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
3.23M	3.52M	3.99M	13.97M	―	―
	Total Assets
11.42M	32.59M	74.79M	120.21M	20.49M	19.19M
	Total Debt
753.51K	28.77M	19.90M	23.15M	―	―
	Net Debt
-2.48M	25.25M	15.90M	―	―	―
	Total Liabilities
6.98M	83.32M	65.98M	54.47M	11.96M	13.55M
	Stockholders Equity
2.98M	-53.51M	6.41M	64.70M	―	―
Cash Flow		Free Cash Flow
-10.80M	-16.50M	-24.06M	―	―	―
	Operating Cash Flow
-10.79M	-16.20M	-23.43M	―	―	―
	Investing Cash Flow
-432.00K	2.14M	-6.55M	-15.95M	―	―
	Financing Cash Flow
8.96M	12.93M	20.66M	34.56M	―	―

Hub Technical Analysis

Technical Analysis Sentiment

Negative

Last Price2.94

Price Trends

50DMA

6.01

Negative

100DMA

5.98

Negative

200DMA

5.94

Negative

Market Momentum

MACD

-0.77

Negative

RSI

39.68

Neutral

STOCH

43.93

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HUBC, the sentiment is Negative. The current price of 2.94 is below the 20-day moving average (MA) of 3.95, below the 50-day MA of 6.01, and below the 200-day MA of 5.94, indicating a bearish trend. The MACD of -0.77 indicates Negative momentum. The RSI at 39.68 is Neutral, neither overbought nor oversold. The STOCH value of 43.93 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HUBC.

Hub Peers Comparison

Overall Rating

UnderperformOutperform

Sector (57)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FIVN	67 Neutral	$1.76B	―	-2.21%	―	14.44%	84.58%
TWLO	63 Neutral	$13.31B	―	-1.24%	―	7.32%	88.51%
RNG	60 Neutral	$2.08B	―	16.58%	―	8.99%	63.84%
BAND	60 Neutral	$347.78M	―	-2.14%	―	24.52%	61.08%
Sector *	57 Neutral	$20.06B	9.61	-11.19%	2.76%	5.41%	-24.85%
HUBC	54 Neutral	$9.29M	―	163.42%	―	―	―
EGHT	51 Neutral	$215.98M	―	-40.78%	―	-2.23%	19.48%

* Technology Sector Average

Performance Comparison

HUBC

Hub

3.05

-16.45

-84.36%

EGHT

8X8

1.71

-0.55

-24.34%

RNG

RingCentral

22.63

-8.08

-26.31%

FIVN

Five9

23.18

-33.63

-59.20%

TWLO

Twilio

86.42

27.39

46.40%

BAND

Bandwidth

12.06

-4.95

-29.10%

Hub Earnings Call Summary

Earnings Call Date: Dec 2, 2024 | % Change Since: -46.74% | Next Earnings Date: Aug 19, 2025

Earnings Call Sentiment Neutral

The earnings call reflects a company in transition, with significant improvements in operational efficiencies and strategic focus on high-margin software solutions. The demand for the Secure Data Fabric platform and reduction in expenses are notable positives, though challenged by revenue decline and cash flow issues.

Highlights

Improved Gross Profit Margin

Gross profit margin for the six months ended June 30, 2024, improved to 9.5% compared to negative 7.9% for the same period in 2023, reflecting effective management of operations and efficiencies.

Significant Reduction in Operating Expenses

Total operating expenses for the six months ended June 30, 2024, were $16.5 million, a 90% decline compared to $57.5 million reported for the same period in 2023.

Decrease in General and Administrative Expenses

G&A expenses decreased by 63% or $22 million for the six months ended June 30, 2024, compared to the same period in 2023.

Secure Data Fabric Platform Demand

The Secure Data Fabric platform has seen remarkable demand, with validation and endorsement by leading financial services firms, positioning it as a growth engine for HUB.

Strategic Evolution Towards Software

HUB has transitioned to focus on high-margin software-driven solutions, with the Secure Data Fabric poised to be the primary growth driver, targeting margins in the 80% to 90% range.

Lowlights

Revenue Decline

Revenue for the six months ended June 30, 2024, was $15.7 million, a decline of $9.3 million or 37% compared to $25 million for the same period in 2023, primarily due to terminated and less profitable contracts.

Cash Flow Challenges

A decrease in cash of $2 million was reported, with cash outlay for operating expenses being $10 million against $8 million generated from financing activities.

Company Guidance

During the first half of 2024, HUB Cyber Security experienced a revenue decline of 37%, from $25 million in 2023 to $15.7 million, largely due to the termination of less profitable contracts. However, the company improved its gross profit margin significantly from a negative 7.9% to 9.5%, attributed to effective operational management and the absence of prior one-off costs. Operating expenses were drastically reduced by 90%, from $57.5 million to $16.5 million, as the company streamlined operations and reduced headcount. General and administrative expenses saw a 63% decrease, while sales and marketing expenses fell by 43%, and R&D expenses reduced by 77%. The company generated $8 million from financing activities, despite a $10 million cash outlay for operating expenses. Looking forward, HUB's primary growth engine will be its Secure Data Fabric platform, expected to surpass its professional services in revenue contribution, with an anticipated shift in business mix starting in 2025.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.