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SurgePays (SURG)
NASDAQ:SURG
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SurgePays
(NASDAQ:SURG)
45Neutral
Positive Factors
Market Opportunity
There are ~100 million adults in the U.S. that are underbanked, representing a significant market opportunity for SurgePays’s products.
Strategic Partnerships
The company recently signed a major agreement with AT&T to offer a full range of mobile wireless, voice, data, and messaging services on the nation's largest wireless network.
Valuation
SurgePays stock is trading below cash value, which is very low compared to any fintech, retail, or consumer company.
Negative Factors
Financial Performance
SURG reported a 3Q24 results with a net loss of ($0.73)/share as the Affordable Connectivity Program (ACP) expired in mid-May 2024.
Program Termination
ACP was the source of 97% of SURG's gross profit in 2023, so no re-funding creates a huge revenue 'hole.'
Revenue Loss
SURG voluntarily continued to provide wireless services to its 280K ex-ACP customers even though it was receiving no ACP revenue.
SurgePays (SURG) vs. S&P 500 (SPY)
Market Cap
$27.82M
Dividend YieldN/A
Average Volume (3M)87.26K
Price to Earnings (P/E)―
Beta (1Y)1.64
Revenue Growth-40.73%
EPS Growth-176.24%
CountryUS
Employees22
SectorTechnology
Sector Strength54
IndustrySoftware - Application
Share Statistics
EPS (TTM)-1.11
Shares Outstanding20,161,547
10 Day Avg. Volume50,082
30 Day Avg. Volume87,259
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.32
Price to Cash Flow (P/CF)-0.50
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
$8.50Price Target Upside515.94% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering0
SurgePays Business Overview & Revenue Model
Company DescriptionSurgePays, Inc., a financial technology and telecommunications company, provides services to the underbanked community in the United States. Its blockchain platform utilizes a suite of financial and prepaid products to convert corner stores and bodegas into tech-hubs for underbanked neighborhoods. The company offers voice and SMS text messaging services to subsidized and direct retail prepaid customers, as well as to low-income consumers. It also offers subsidized mobile broadband services to consumers in California, Colorado, Florida, Illinois, Maryland, Mississippi, Missouri, Nevada, New Jersey, Ohio, Oklahoma, Rhode Island, Tennessee, and Texas, as well as prepaid wireless plans. In addition, the company provides marketing business intelligence, plaintiff generation, and case load management solutions primarily to law firms in the mass tort industry. Further, it operates a bilingual operations center offering the Company with sales support, customer service, IT infrastructure design, graphic media, database programming, software development, revenue assurance, lead generation, and other various operational support services. The company is headquartered in Bartlett, Tennessee.
How the Company Makes MoneySurgePays generates revenue through a diversified business model that includes selling prepaid wireless services and mobile data top-ups via a network of independent retailers. A significant portion of its earnings comes from the distribution of wireless and financial services through its proprietary SurgePays Network. This platform connects retail locations with telecom and financial services, providing a digital corridor for transactions. Additionally, SurgePays earns money by offering financial products such as prepaid debit cards and payment processing services. The company's key revenue streams are supported by partnerships with wireless carriers, financial service providers, and a broad retailer network, facilitating access to a large customer base in underserved markets.
SurgePays Financial Statement Overview
Summary
SurgePays is grappling with profitability and cash flow issues, as evidenced by negative margins and cash flow challenges. Despite some improvement in equity, the company faces significant financial hurdles with a volatile revenue trend and high production costs relative to revenue.Income Statement
SurgePays shows volatile revenue trends with a notable decline in the TTM period. The gross profit margin is significantly low, indicating high production costs relative to revenue. Both EBIT and EBITDA margins are negative, reflecting operational inefficiencies. The net profit margin is also negative, highlighting profitability challenges.45
Neutral
Balance Sheet
The company's balance sheet reveals a strengthening equity position with positive stockholders' equity in recent periods. However, the debt-to-equity ratio remains a concern, although it has improved. The equity ratio suggests moderate financial stability, but the company must address its liabilities to maintain this trajectory.55
Neutral
Cash Flow
Negative operating and free cash flows in the TTM indicate cash management issues. The free cash flow to net income ratio is concerning, and cash flow from operations does not cover net income, highlighting liquidity risks. The significant financing cash inflow suggests reliance on external funding.40
Negative
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 83.60M | 137.14M | 121.54M | 51.06M | 54.41M | 25.74M | Gross Profit |
| 3.85M | 35.64M | 13.47M | 6.17M | 2.47M | 5.44M | EBIT |
| -22.54M | 18.87M | 873.66K | -5.99M | -8.40M | -6.78M | EBITDA |
| -20.64M | 20.08M | 1.86M | -5.23M | -5.40M | -7.94M | Net Income Common Stockholders |
| -22.90M | 20.62M | -148.85K | -18.80M | -16.90M | -8.22M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 1.60M | 14.62M | 7.04M | 6.28M | 674.00K | 346.04K | Total Assets |
| 8.79M | 41.93M | 34.00M | 19.50M | 7.33M | 9.99M | Total Debt |
| 8.42M | 5.44M | 8.11M | 7.68M | 7.67M | 8.50M | Net Debt |
| 6.82M | -9.18M | 1.08M | 1.40M | 6.99M | 8.16M | Total Liabilities |
| 19.18M | 13.52M | 28.89M | 15.95M | 18.05M | 14.69M | Stockholders Equity |
| -10.39M | 28.25M | 4.99M | 3.55M | -10.73M | -4.70M |
| Cash Flow | Free Cash Flow | ||||
| -11.17M | 10.01M | 94.69K | -15.34M | -4.33M | -6.76M | Operating Cash Flow |
| -11.46M | 10.29M | 793.27K | -15.29M | -4.33M | -6.53M | Investing Cash Flow |
| -10.31M | -281.30K | -1.50M | -376.72K | 8.35K | -32.24K | Financing Cash Flow |
| 22.96M | -2.42M | 1.46M | 21.27M | 4.65M | 6.47M |
SurgePays Technical Analysis
Positive
1.38
Price Trends
1.41
Positive
1.58
Positive
1.97
Positive
Market Momentum
0.07
Negative
81.33
Negative
73.67
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SURG, the sentiment is Positive. The current price of 1.38 is above the 20-day moving average (MA) of 1.31, below the 50-day MA of 1.41, and below the 200-day MA of 1.97, indicating a bullish trend. The MACD of 0.07 indicates Negative momentum. The RSI at 81.33 is Negative, neither overbought nor oversold. The STOCH value of 73.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SURG.
SurgePays Risk Analysis
SurgePays disclosed 20 risk factors in its most recent earnings report. SurgePays reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
SurgePays Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
61 Neutral | $2.33B | 42.27 | 3.66% | ― | 9.41% | ― | |
59 Neutral | $450.37M | ― | -3.20% | ― | -22.61% | -173.59% | |
58 Neutral | $21.97B | 10.63 | -18.43% | 2.40% | 4.67% | -24.47% | |
51 Neutral | $4.68M | ― | -60.76% | ― | -6.20% | 64.07% | |
45 Neutral | $27.82M | ― | -80.54% | ― | -40.73% | -176.24% | |
40 Underperform | $21.93M | ― | -71.86% | ― | 6.44% | -307.54% |
* Technology Sector Average
Performance Comparison
SURG
SurgePays
2.35
-1.38
-37.00%
CLFD
Clearfield
31.27
1.39
4.65%
SMIT
Schmitt Industries
0.02
>-0.01
-33.33%
TTMI
TTM Technologies
22.32
6.79
43.72%
RKDA
Arcadia Biosciences
3.30
1.00
43.48%
TPCS
TechPrecision
2.44
-1.23
-33.51%
SurgePays Earnings Call Summary
Earnings Call Date: Mar 25, 2025 | % Change Since: 0.00% | Next Earnings Date: May 19, 2025
Earnings Call Sentiment Negative
The earnings call highlighted strategic advancements such as the nationwide launch of Linco Mobile, a new MVNE revenue model, and successful integration with AT&T, which are expected to drive future growth. However, these positives were overshadowed by significant financial challenges, including a major revenue decline, a significant net loss, and increased operational costs due to the shutdown of the ACP program and other factors.Highlights
Launch of Linco Mobile Nationwide
Linco Mobile, SurgePays' prepaid brand, is launching nationwide with growth expected to accelerate soon.
New Revenue Engine as a Mobile Virtual Network Enabler (MVNE)
SurgePays has unlocked a new revenue engine as an MVNE, providing wireless infrastructure to other companies, which is expected to drive significant cash flow.
Successful Integration with AT&T
A multiyear agreement with AT&T has been completed, providing SurgePays customers with nationwide 4G LTE and 5G coverage. The initial soft launch exceeded expectations with 30,000 SIMs deployed.
300% Revenue Growth in Top-Up Platform
The point of sale software platform saw over 300% revenue growth from Q1 to Q4 in 2024.
Lowlights
Significant Revenue Decline
Revenues decreased by 56% in 2024 to $60.9 million from $137.1 million in 2023, primarily due to the shutdown of the ACP federal funding.
Gross Loss and Increased SG&A Expenses
A gross loss of $14.3 million was reported in 2024 compared to a $35.6 million gross profit in 2023. SG&A expenses increased by 57% year over year, due to non-cash stock compensation and contractor fees.
Net Loss and Operating Loss
The company experienced a net loss of $45.7 million and a loss per share of $2.39. Loss from operations was $41.8 million in 2024 compared to an $18.9 million profit in 2023.
Impact of ACP Shutdown
The ending of the ACP program had a significant adverse impact on revenue and profitability, contributing to the financial losses in 2024.
Company Guidance
During the SurgePays, Inc. fourth quarter 2024 earnings call, the company outlined its strategic vision and financial guidance for the upcoming year. They anticipate over $200 million in revenue for the next twelve months, starting from April 1, 2025, marking a substantial increase compared to previous periods. SurgePays plans to leverage its position as a mobile virtual network enabler (MVNE) and its partnerships, particularly with AT&T, to scale its operations and drive growth. The company expects to ship 250,000 to 300,000 SIMs monthly, supported by its expanded retail network of nearly 9,000 stores. The point of sale (POS) platform, a core component of their strategy, experienced over 300% revenue growth in 2024 from Q1 to Q4, reflecting its role in boosting activations and transactions. Despite a 56% decrease in overall 2024 revenues to $60.9 million due to the shutdown of the Affordable Connectivity Program (ACP), SurgePays remains confident in achieving positive cash flow by exiting 2025, driven by diversified revenue streams from their wireless and POS segments.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.