Ispire Technology, Inc. (ISPR) AI Stock Analysis

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Ispire Technology, Inc.

(NASDAQ:ISPR)

49Neutral

Ispire Technology, Inc. is currently facing substantial challenges in achieving profitability and maintaining cash flow, as reflected in their financial statements. Despite some positive strategic developments like international expansion and a stock repurchase program, the company struggles with declining revenues in key markets and increased operating expenses. Technical analysis indicates a bearish trend, and valuation metrics are unattractive due to ongoing losses. These factors result in a below-average overall stock score.

Ispire Technology, Inc. (ISPR) vs. S&P 500 (SPY)

Market Cap

$172.41M

Dividend YieldN/A

Average Volume (3M)66.25K

Price to Earnings (P/E)―

Beta (1Y)1.17

Revenue Growth5.10%

EPS Growth-137.46%

CountryUS

Employees98

SectorTechnology

Sector Strength46

IndustryTobacco

Share Statistics

EPS (TTM)-0.41

Shares Outstanding57,090,973

10 Day Avg. Volume82,864

30 Day Avg. Volume66,255

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)1.19

Price to Cash Flow (P/CF)-13.90

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 Target

$9.00

Price Target Upside198.01% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering1

Ispire Technology, Inc. Business Overview & Revenue Model

Company DescriptionIspire Technology Inc. manufactures e-cigarettes and cannabis vaping products. The company was founded in 2019 and is based in Los Angeles, California. Ispire Technology Inc. operates as a subsidiary of Pride Worldwide Investment Limited

How the Company Makes MoneyIspire Technology, Inc. generates revenue through the sale of its proprietary hardware and software products. The company develops cutting-edge consumer electronics that are sold directly to consumers and through retail partnerships. Additionally, ISPR offers software solutions that are licensed to businesses, providing subscription-based services that create a recurring revenue stream. Key revenue streams include direct product sales, software licensing fees, and strategic partnerships that expand distribution channels and enhance market reach.

Ispire Technology, Inc. Financial Statement Overview

Summary

Ispire Technology, Inc. faces challenges with profitability and cash flow generation. The income statement shows ongoing losses and operational inefficiencies, while the balance sheet indicates a high level of liabilities. However, a strong cash position provides resilience.

Income Statement

Neutral

Ispire Technology, Inc.'s income statement shows challenges with profitability. The gross profit margin remains positive, but the company faces a negative net profit margin, indicating significant losses. Revenue growth has been positive from 2021 to 2023, but recent figures suggest instability in achieving sustainable profitability. The EBIT and EBITDA margins are also negative, highlighting operational inefficiencies.

Balance Sheet

Neutral

The balance sheet reflects a relatively stable equity ratio, but the company has a high level of total liabilities compared to its stockholders' equity, resulting in a moderate debt-to-equity ratio. The return on equity is negative due to net losses, indicating inefficiency in generating returns for shareholders. Nevertheless, the company maintains a strong cash position, which provides some resilience.

Cash Flow

Neutral

The cash flow statement indicates volatility in cash flow generation. Operating cash flow has been negative, but the company has managed to keep free cash flow slightly positive in the TTM period. The operating and free cash flow to net income ratios are concerning, suggesting challenges in converting earnings to cash effectively.

TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021
Breakdown
Income Statement		Total Revenue
81.23B	151.91M	115.61M	88.10M	63.41M
	Gross Profit
15.41B	29.78M	21.08M	13.31M	10.42M
	EBIT
-21.66M	-13.89M	-4.57M	-988.67K	3.64M
	EBITDA
-18.89M	-11.76M	-3.68M	-843.13K	3.65M
	Net Income Common Stockholders
-5.61B	-14.77M	-6.10M	-1.87M	2.94M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
34.37B	35.07M	49.43M	74.48M	85.25M
	Total Assets
132.04B	122.64M	90.69M	100.74M	93.86M
	Total Debt
2.82B	3.40M	4.30M	347.54K	478.11K
	Net Debt
-31.56M	-31.67M	-36.00M	-74.13M	-84.77M
	Total Liabilities
107.81B	88.18M	59.32M	88.97M	80.11M
	Stockholders Equity
24.23B	34.46M	31.37M	11.77M	13.76M
Cash Flow		Free Cash Flow
105.99M	-21.45M	-8.60M	-7.68M	5.02M
	Operating Cash Flow
430.04M	-18.30M	-7.58M	-7.56M	5.02M
	Investing Cash Flow
-1.10B	2.99M	-10.15M	-121.52K	-798.00
	Financing Cash Flow
10.79M	10.08M	-16.44M	-3.09M	-227.85K

Ispire Technology, Inc. Technical Analysis

Technical Analysis Sentiment

Negative

Last Price3.02

Price Trends

50DMA

3.64

Negative

100DMA

4.43

Negative

200DMA

5.63

Negative

Market Momentum

MACD

-0.16

Negative

RSI

43.74

Neutral

STOCH

8.94

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ISPR, the sentiment is Negative. The current price of 3.02 is below the 20-day moving average (MA) of 3.05, below the 50-day MA of 3.64, and below the 200-day MA of 5.63, indicating a bearish trend. The MACD of -0.16 indicates Negative momentum. The RSI at 43.74 is Neutral, neither overbought nor oversold. The STOCH value of 8.94 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ISPR.

Ispire Technology, Inc. Risk Analysis

Ispire Technology, Inc. disclosed 47 risk factors in its most recent earnings report. Ispire Technology, Inc. reported the most risks in the “Legal & Regulatory” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Ispire Technology, Inc. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (59)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RLX	64 Neutral	$2.12B	27.97	3.49%	0.46%	106.83%	10.27%
TPB	59 Neutral	$1.03B	27.11	27.80%	0.49%	-0.13%	2.92%
Sector *	59 Neutral	$9.97B	10.09	-6.54%	3.08%	7.41%	-11.60%
ISPR	49 Neutral	$172.41M	―	-86.30%	―	5.10%	-137.46%
GNLN	42 Neutral	$2.23M	―	-200.95%	―	-79.69%	89.11%
XXII	36 Underperform	$1.79M	―	-385.90%	―	-65.44%	96.80%
KAVL	31 Underperform	$5.76M	―	-70.92%	―	-71.85%	59.22%

* Technology Sector Average

Performance Comparison

ISPR

Ispire Technology, Inc.

2.99

-2.22

-42.61%

XXII

22nd Century

0.83

-247.57

-99.67%

TPB

Turning Point Brands

59.05

31.10

111.27%

GNLN

Greenlane Holdings

0.24

-5.83

-96.05%

KAVL

Kaival Brands Innovations Group

0.49

-3.01

-86.00%

RLX

RLX Technology

1.80

-0.06

-3.23%

Ispire Technology, Inc. Earnings Call Summary

Earnings Call Date: Feb 10, 2025 | % Change Since: -35.33% | Next Earnings Date: May 20, 2025

Earnings Call Sentiment Neutral

The earnings call presented a balanced view of Ispire Technology's performance. While there were significant achievements in gross margin improvement, international expansion, and strategic initiatives like the stock repurchase program and PMTA strategy, the company also faced challenges with declining revenues in key regions and increased operating expenses leading to a higher net loss.

Highlights

Gross Margin and Profit Increase

Gross margin for Q2 increased to 18.5% from 15%, with gross profit rising to $7.7 million from $6.3 million in the same quarter of fiscal 2024.

Nicotine Business Performance

Nicotine business accounted for $31 million of overall revenue, marking strong performance and expansion into new international markets, particularly in Africa.

Successful Product Launch in Africa

Launch of BrkFst nicotine product in South Africa and Nigeria, with a presence in over 500 retail locations, expected to expand to over 2,000 stores in six months.

Regulatory Approvals in Malaysia

Obtained nicotine import and export licenses from the Malaysian government, nearing completion of manufacturers license, enhancing operational capabilities.

Stock Repurchase Program

Board authorized a $10 million stock repurchase program through January 2027, reflecting confidence in Ispire's long-term vision.

Positive Cash Flow from Operations

Net cash provided by operating activities was $0.4 million, a significant improvement from $20.2 million used in the same period last year.

Component PMTA Strategy

Successful pre-PMTA meeting with FDA for age-gating technology, with potential to enter a $7 billion market opportunity in the U.S.

Lowlights

Revenue Decline in North America

Revenue from North America decreased by $9 million or 45.3%, primarily due to lower sales of cannabis vaping products.

Revenue Decline in Asia Pacific

Asia Pacific revenues declined by $2.4 million or 39.6% compared to the prior comparable period.

Increased Operating Expenses

Total operating expenses rose to $15.11 million from $10.2 million, driven by investments in Malaysian production facilities and product development.

Net Loss Increase

Net loss increased to $8 million or $0.14 per share compared to a net loss of $4 million or $0.07 per share in the prior period.

Company Guidance

During the Ispire Technology earnings call for the fiscal second quarter of 2025, several key metrics and strategic initiatives were highlighted. The company reported a slight revenue increase to $41.8 million, a 0.3% rise from the previous year's $41.7 million, and an improvement in gross margin to 18.5% from 15%, resulting in a gross profit of $7.7 million. The nicotine business generated $31 million of total revenue, with significant contributions from new international markets, notably Africa. The launch of the BrkFst nicotine product in South Africa and Nigeria marked a milestone, expanding to over 500 retail locations. The company's stock repurchase program of up to $10 million was authorized, reflecting confidence in long-term growth. Despite a net loss of $8 million, the cash position was strong at $34.4 million. Additionally, Ispire is advancing with regulatory approvals in Malaysia and preparing for the UK market launch, positioning itself strategically in the global nicotine market.

Ispire Technology, Inc. Corporate Events

Business Operations and StrategyFinancial Disclosures

Ispire Technology Sees Profit Growth Amid Revenue Drop

Positive

Nov 12, 2024

Ispire Technology Inc. reported a 13.2% increase in gross profit for the first fiscal quarter of 2025, reaching $7.7 million, despite an 8.2% drop in revenue compared to last year. The company attributes this growth to strategic shifts focusing on high-quality customers and improving payment terms. Ispire is expanding its global reach with a new distribution agreement in the MENA region and advancing its innovative vaping technologies, positioning itself for continued success amid a challenging economic landscape.

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.