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VerifyMe (VRME)
:VRME
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VerifyMe
(NASDAQ:VRME)
47Neutral
Positive Factors
Cash Flow and Debt Management
VRME generated $4.7M cash from a warrant inducement, retired its term debt and non-affiliate convertible debt, and announced an ~$15.8M ATM; which enables the company to actively pursue strategic alternatives and new growth initiatives to maximize shareholder return.
Financial Performance
Adjusted EPS and adjusted EBITDA exceeded expectations, contributing to the maintained OUTPERFORM rating.
Negative Factors
Industry Challenges
The company's logistics business performance was weak due to factors such as the loss of the FedEx direct premium business and a soft industry backdrop.
Revenue Decline
4Q24 revenue of $7.7M was down 12% year-over-year and slightly below the estimate of $7.8M.
VerifyMe (VRME) vs. S&P 500 (SPY)
Market Cap
$9.39M
Dividend YieldN/A
Average Volume (3M)131.12K
Price to Earnings (P/E)―
Beta (1Y)0.69
Revenue Growth-4.37%
EPS Growth-3.25%
CountryUS
Employees40
SectorIndustrials
Sector Strength72
IndustrySecurity & Protection Services
Share Statistics
EPS (TTM)-0.36
Shares Outstanding12,354,772
10 Day Avg. Volume76,148
30 Day Avg. Volume131,115
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.41
Price to Cash Flow (P/CF)4.30
P/FCF Ratio4.20
Enterprise Value/Market Cap1.45
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit1.57
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$1.25Price Target Upside64.47% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
VerifyMe Business Overview & Revenue Model
Company DescriptionVerifyMe, Inc. (VRME) is a technology solutions company specializing in brand protection, authentication, and anti-counterfeiting services. The company operates within sectors that include security, technology, and supply chain management. Its core products and services consist of proprietary security printing solutions, digital tools for product verification, and software applications that help businesses track and authenticate their products across various points in the supply chain.
How the Company Makes MoneyVerifyMe makes money through a combination of product sales, service contracts, and licensing agreements. The company generates revenue by selling its patented security inks and pigments that are used in printing secure labels and packaging. Additionally, VerifyMe earns income from subscription-based services for its digital authentication tools and software platforms, which allow businesses to track and verify the authenticity of their products in real-time. Significant partnerships with label and packaging companies enhance its market reach, and its collaboration with technology firms helps integrate its solutions into broader security and supply chain systems, further contributing to its earnings.
VerifyMe Financial Statement Overview
Summary
VerifyMe faces significant financial challenges, including consistent net losses and negative margins. While there has been some improvement in cash flow and debt reduction, the overall financial health is concerning due to fluctuating cash flows and persistent unprofitability.Income Statement
VerifyMe has shown inconsistent revenue growth over the years, with a significant drop in 2024 compared to 2023. The company has faced persistent negative net and EBIT margins, indicating ongoing profitability challenges. Despite some gross profit, the company’s inability to convert revenue into net income remains a concern.40
Negative
Balance Sheet
The balance sheet reveals a decreasing trend in stockholders' equity and total assets. The debt-to-equity ratio has improved slightly due to reduced total debt, but the return on equity remains negative due to net losses. The equity ratio suggests a moderately leveraged position, but the consistent net losses could pose future risks.55
Neutral
Cash Flow
VerifyMe exhibits fluctuations in operating cash flow, with a positive free cash flow in recent years. However, the operating cash flow to net income ratio is unfavorable due to persistent net losses. The company’s ability to generate cash from operations remains inconsistent, posing potential liquidity concerns.50
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 24.21M | 25.31M | 19.58M | 867.00K | 343.00K | Gross Profit |
| 8.66M | 9.00M | 6.49M | 599.00K | 281.00K | EBIT |
| -4.39M | -2.93M | 6.08M | -13.39M | -3.57M | EBITDA |
| -863.00K | -1.79M | -13.54M | -4.71M | -3.44M | Net Income Common Stockholders |
| -3.82M | -3.39M | -14.49M | 12.17M | -7.96M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 2.82M | 3.10M | 3.41M | 9.42M | 7.94M | Total Assets |
| 16.07M | 20.70M | 20.75M | 21.69M | 8.77M | Total Debt |
| 247.00K | 2.95M | 2.35M | 0.00 | 72.00K | Net Debt |
| -2.58M | -143.00K | -1.06M | -9.42M | -7.87M | Total Liabilities |
| 5.85M | 8.17M | 7.17M | 521.00K | 455.00K | Stockholders Equity |
| 10.21M | 12.53M | 13.59M | 21.17M | 8.32M |
| Cash Flow | Free Cash Flow | |||
| 871.00K | 209.00K | -2.83M | -3.51M | -2.41M | Operating Cash Flow |
| 871.00K | 244.00K | -2.55M | -3.25M | -2.28M | Investing Cash Flow |
| -575.00K | -1.20M | -7.88M | -2.85M | -125.00K | Financing Cash Flow |
| -616.00K | 634.00K | 4.42M | 7.59M | 10.09M |
VerifyMe Technical Analysis
Neutral
0.76
Price Trends
0.78
Negative
1.10
Negative
1.16
Negative
Market Momentum
-0.03
Negative
55.89
Neutral
84.25
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VRME, the sentiment is Neutral. The current price of 0.76 is above the 20-day moving average (MA) of 0.65, below the 50-day MA of 0.78, and below the 200-day MA of 1.16, indicating a neutral trend. The MACD of -0.03 indicates Negative momentum. The RSI at 55.89 is Neutral, neither overbought nor oversold. The STOCH value of 84.25 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for VRME.
VerifyMe Risk Analysis
VerifyMe disclosed 44 risk factors in its most recent earnings report. VerifyMe 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
VerifyMe Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
63 Neutral | $4.27B | 11.40 | 5.38% | 214.63% | 4.11% | -8.98% | |
56 Neutral | $27.60M | ― | 9.92% | ― | ― | ― | |
47 Neutral | $9.39M | ― | -33.62% | ― | -4.37% | -3.25% | |
41 Neutral | $2.48M | ― | -185.43% | ― | -10.64% | 79.12% | |
34 Underperform | $22.49M | ― | -72.31% | ― | -1.43% | 85.31% | |
15 Underperform | $2.23M | ― | -234.89% | ― | -32.26% | 39.17% |
* Industrials Sector Average
Performance Comparison
VRME
VerifyMe
0.76
-1.21
-61.42%
DGLY
Digital Ally
0.03
-1.96
-98.49%
SPCB
SuperCom
7.94
3.16
66.11%
BKYI
BIO-key International
0.79
-0.96
-54.86%
GFAI
Guardforce AI Co
1.15
-1.85
-61.67%
VerifyMe Earnings Call Summary
Earnings Call Date:Mar 06, 2025
(Q4-2024)
| % Change Since: -20.83%|
Next Earnings Date:May 08, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a mixed sentiment. The company achieved notable improvements in gross margin, debt reduction, and maintained positive cash flow. However, these positives are tempered by declines in revenue, operating losses in certain segments, and a net loss in Q4. The company is focused on optimizing its strategy and aligning costs with revenue despite challenges.Q4-2024 Updates
Positive Updates
Gross Margin Improvement
The full-year gross margin increased to 36% in 2024 compared to 32% in 2023, indicating improved profitability despite revenue challenges.
Successful Debt Reduction and Capital Raise
The company completed a $4.7 million warrant inducement capital raise and retired bank debt. Convertible debt was reduced from $1.1 million to $800,000, strengthening the balance sheet.
Positive Cash Flow
The Precision Logistics segment remains a positive cash-generating business, contributing to the overall financial health of the company.
Adjusted EBITDA Growth
Adjusted EBITDA improved to $1 million for 2024 from $0.4 million in 2023, marking the sixth consecutive positive quarter.
Negative Updates
Revenue Decline
Annual revenue for 2024 decreased by 4% compared to 2023. Q4 revenue was $7.7 million, down from $8.7 million in the previous year, with a $1 million decrease attributed to the loss of a major customer in the Precision Logistics segment.
Operating Loss in Authentication Segment
The Authentication segment, specifically the divested Trust Codes Global business, had an operating loss of $1.2 million in 2024.
Net Loss in Q4 2024
The company reported a net loss of $0.5 million or $0.05 per diluted share for Q4 2024, compared to a net income of less than $0.1 million in Q4 2023.
Decrease in Gross Profit
Gross profit decreased by $0.5 million to $2.4 million in Q4 2024 versus $2.9 million in Q4 2023, with gross margin slightly declining from 33% to 32%.
Company Guidance
During the VerifyMe Fourth Quarter 2024 Financial Results Conference Call, the company provided various metrics and guidance. In 2024, annual revenue decreased by 4% compared to 2023, although there were improvements in gross profit, gross margin, and adjusted EBITDA. The company completed a $4.7 million warrant inducement capital raise and retired bank debt, reducing convertible debt from $1.1 million to $800,000. In the Precision Logistics segment, proactive customers increased by 6% over 2023, although shipments by existing customers declined by 6%. The company divested the Trust Codes Global business, which had an operating loss of $1.2 million, and gross margin for the full year 2024 was 36%, up from 32% in 2023. Fourth-quarter revenue decreased by $1 million to $7.7 million, and the net loss was $0.5 million, or $0.05 per diluted share. The balance sheet showed $2.8 million in cash as of December 31, 2024. The company does not plan to provide guidance for 2025 but anticipates stability barring market unpredictability.VerifyMe Corporate Events
M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
VerifyMe Announces Strategic Shift and Business Closure Plans
Negative
Nov 12, 2024
VerifyMe, Inc. announced plans to close its Trust Codes Global business by the end of November 2024 unless a buyer is found, resulting in a $1.8 million charge in Q3 2024. The company reported a revenue of $5.4 million and a net loss of $2.4 million for Q3 2024, with positive adjusted EBITDA of $0.2 million. CEO Adam Stedham emphasized focusing on Precision Logistics for growth, while discontinuing certain Authentication Segment initiatives, aiming to enhance shareholder value.
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.