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WISeKey International Holding (WKEY)
NASDAQ:WKEY
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WISeKey International Holding
(NASDAQ:WKEY)
51Neutral
Positive Factors
Analyst Rating
Analyst maintains a Buy rating and raises the 12-month price target to $10, from $4.50, based on an EV/revenue multiple of 3.0x 2026.
Revenue Growth
WISeKey reported full-year 2023 revenue of $30.1M, up 30% year over year from $23.8M, on continued growth of its SEALSQ semiconductor business addressing the internet of things (IoT).
Negative Factors
Revenue Decline
WISeKey reported 1H24 revenue of $5.2M, down 66% year over year from $15.1M, which was significantly below expectations.
WISeKey International Holding (WKEY) vs. S&P 500 (SPY)
Market Cap
$49.47M
Dividend YieldN/A
Average Volume (3M)312.98K
Price to Earnings (P/E)―
Beta (1Y)-0.03
Revenue Growth-26.47%
EPS Growth-5.60%
CountryUS
Employees102
SectorTechnology
Sector Strength45
IndustrySemiconductors and Equipment
Share Statistics
EPS (TTM)-7.50
Shares Outstanding2,040,273
10 Day Avg. Volume224,318
30 Day Avg. Volume312,982
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.43
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 Target
$10.00Price Target Upside125.73% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
WISeKey International Holding Business Overview & Revenue Model
Company DescriptionWISeKey International Holding (WKEY) is a leading global cybersecurity company, specializing in the development of secure technologies for identity management, authentication, and data protection. The company operates across various sectors including Internet of Things (IoT), blockchain, and artificial intelligence, providing solutions that ensure the integrity and authenticity of online transactions and communications. WISeKey's core products and services include digital identity solutions, IoT security, and secure cloud services, aimed at enhancing security and trust in the digital world.
How the Company Makes MoneyWISeKey International Holding generates revenue through a diversified business model that includes licensing its advanced cybersecurity technologies and selling proprietary hardware and software solutions. Key revenue streams include the sale of digital identity and IoT security products, which are utilized by enterprises to safeguard their digital assets and data. Additionally, the company earns income from offering consulting services, assisting businesses with the integration and deployment of their cybersecurity frameworks. WISeKey has established significant partnerships with technology vendors and governmental entities, which contribute to its earnings by expanding its market reach and facilitating the adoption of its security solutions. The company also monetizes its blockchain platform by enabling secure transactions and data exchanges, further boosting its revenue potential.
WISeKey International Holding Financial Statement Overview
Summary
WISeKey International Holding faces ongoing financial challenges despite revenue growth. The company struggles with profitability and cash generation, evident in negative margins and cash flow metrics. While leverage is moderate, the low return on equity and consistent losses highlight significant hurdles in achieving financial stability and growth.Income Statement
WISeKey International Holding showed some positive developments in terms of revenue growth; however, profitability remains a significant concern. The company reported a 33.3% increase in total revenue from 2022 to 2023, but it continues to operate at a loss, with a negative net profit margin of -49.7% in 2023. Additionally, the company has a negative EBIT margin of -43.0%, indicating operational inefficiencies.45
Neutral
Balance Sheet
The balance sheet reflects a mixed financial position. WISeKey has a debt-to-equity ratio of 0.37, suggesting moderate leverage, but the return on equity is negative at -57.6%, highlighting challenges in generating shareholder value. The equity ratio stands at 55.8%, indicating a reasonable amount of equity financing relative to total assets.50
Neutral
Cash Flow
Cash flow metrics reveal ongoing difficulties. Although there was a slight improvement in operating cash flow, it remains negative at -$14.2 million. The free cash flow also saw marginal improvement but remains negative at -$17.2 million. The operating cash flow to net income ratio is negative, indicating struggles in converting income to cash. The free cash flow to net income ratio also remains undesirable.40
Negative
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 28.74M | 30.92M | 23.20M | 22.26M | 14.78M | 22.65M | Gross Profit |
| 16.07M | 14.74M | 9.80M | 9.09M | 5.46M | 9.46M | EBIT |
| -21.55M | -13.30M | 2.58M | -26.69M | -18.53M | -20.50M | EBITDA |
| -24.35M | -13.27M | -11.65M | -20.36M | -26.06M | -19.94M | Net Income Common Stockholders |
| -31.76M | -15.36M | 5.77M | -24.09M | -28.91M | -23.03M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 15.32M | 15.32M | 4.06M | 34.25M | 28.84M | 12.12M | Total Assets |
| 47.80M | 47.80M | 21.66M | 88.81M | 52.88M | 49.90M | Total Debt |
| 9.77M | 9.77M | 14.12M | 22.06M | 16.97M | 11.27M | Net Debt |
| -5.54M | -5.54M | 10.06M | -12.19M | -2.68M | -852.00K | Total Liabilities |
| 26.72M | 26.72M | 21.45M | 47.43M | 38.45M | 29.46M | Stockholders Equity |
| 26.68M | 26.68M | 212.00K | 35.90M | 16.27M | 22.02M |
| Cash Flow | Free Cash Flow | ||||
| -19.31M | -17.23M | -17.45M | -21.83M | -12.60M | -14.18M | Operating Cash Flow |
| -17.19M | -14.21M | -17.14M | -21.79M | -12.55M | -13.89M | Investing Cash Flow |
| -1.37M | -3.02M | -484.00K | -2.52M | -3.90M | 36.63M | Financing Cash Flow |
| 31.91M | 11.85M | 4.18M | 36.98M | 21.48M | -17.28M |
WISeKey International Holding Technical Analysis
Negative
4.43
Price Trends
6.99
Negative
5.16
Negative
3.67
Positive
Market Momentum
-0.67
Negative
41.20
Neutral
64.64
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WKEY, the sentiment is Negative. The current price of 4.43 is below the 20-day moving average (MA) of 5.06, below the 50-day MA of 6.99, and above the 200-day MA of 3.67, indicating a neutral trend. The MACD of -0.67 indicates Negative momentum. The RSI at 41.20 is Neutral, neither overbought nor oversold. The STOCH value of 64.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WKEY.
WISeKey International Holding Risk Analysis
WISeKey International Holding disclosed 59 risk factors in its most recent earnings report. WISeKey International Holding 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
WISeKey International Holding Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $73.85B | 42.50 | 338.74% | ― | 12.27% | 54.69% | |
78 Outperform | $16.31B | 1,777.39 | -5.91% | ― | 33.10% | -20.31% | |
71 Outperform | $115.09B | 98.20 | 23.38% | ― | 13.86% | -46.44% | |
69 Neutral | $18.58B | 1,856.31 | 0.46% | ― | 15.33% | ― | |
58 Neutral | $21.35B | 9.96 | -19.72% | 2.38% | 5.03% | -22.83% | |
56 Neutral | $4.47B | ― | -20.26% | ― | 10.38% | 6.88% | |
51 Neutral | $49.47M | ― | -58.52% | ― | -26.47% | -5.60% |
* Technology Sector Average
Performance Comparison
WKEY
WISeKey International Holding
4.57
2.07
82.80%
FTNT
Fortinet
97.93
27.75
39.54%
PANW
Palo Alto Networks
179.48
34.42
23.73%
VRNS
Varonis Systems
39.94
-10.07
-20.14%
CYBR
CyberArk Software
338.49
77.07
29.48%
OKTA
Okta
108.78
-0.88
-0.80%
WISeKey International Holding Earnings Call Summary
Earnings Call Date: Sep 30, 2024 | % Change Since: 90.95% | Next Earnings Date: Apr 25, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a company in transition, with significant investments in future growth through its subsidiaries and innovative projects like SEALCOIN. However, the current financial metrics show a substantial decline in revenue and profit margins, indicating a challenging period. Despite the setbacks, WISeKey has positioned itself for future growth with strong cash reserves and strategic partnerships.Highlights
Successful Subsidiary Developments
WISeKey has effectively restructured to give autonomy to various subsidiaries, such as SEALSQ, WISeSat.Space, WISe.ART, and SEALCOIN AG, allowing them to secure independent funding and set the stage for potential future IPOs.
SEALSQ Funding and Expansion
SEALSQ secured $20 million in additional funding during H1 2024 to expand production facilities for post-quantum semiconductors, preparing to release the QS7001 Quantum-Resistant Secure Chip.
WISeSat.Space Growth
WISeSat.Space has launched 17 low-orbit satellites with plans to expand to 88 by 2027, with collaboration agreements with FOSSA Systems and SpaceX, and strategic partnerships with entities like the Swiss Army.
Innovative SEALCOIN Project
SEALCOIN AG secured a $50 million token investment commitment, aiming to revolutionize the IoT ecosystem with autonomous transactional services and a projected digital exchange listing by Q3 2025.
Strong Cash Position
WISeKey reported $26.3 million in cash as of June 30, 2024, providing financial stability and supporting strategic initiatives across subsidiaries.
Lowlights
Revenue Decline
WISeKey's revenue for the first half of 2024 was $5.2 million, a significant decrease from $15.1 million in the same period the previous year, primarily due to decreased demand in the semiconductor vertical.
Gross Profit Margin Decrease
Gross profit margin fell from 53.6% in H1 2023 to 21.5% in H1 2024, driven by high inventory costs and fixed costs amid a temporary decrease in semiconductor demand.
Increased Net Loss
Net loss for H1 2024 increased to $15.5 million compared to a $7.1 million net loss in H1 2023, with a $1.4 million increase in income tax expenses related to deferred tax asset write-offs.
Challenges in Semiconductor Demand
The semiconductor demand slowdown has impacted revenue, attributed to high customer supply levels from previous supply chain challenges.
Company Guidance
During the WISeKey International Holdings Q2 2024 earnings call, CEO Carlos Moreira provided comprehensive guidance on the company's strategic direction and financial performance. WISeKey reported $5.2 million in revenue for the first half of 2024, with $26.3 million in cash by June 30, and $2.9 million invested in R&D. The company is undergoing a restructuring process to enhance its focus on cybersecurity, blockchain, IoT, and post-quantum semiconductor technologies. Key subsidiaries like SEALSQ, WISeSat.Space, and SEALCOIN AG are pivotal to this strategy, with SEALSQ securing $20 million in funding for post-quantum chip development. WISeSat.Space plans to expand its satellite constellation to 88 by 2027, and SEALCOIN aims to leverage blockchain for secure digital transactions. Despite a transitional year marked by a decline in semiconductor revenue, WISeKey anticipates a return to growth in 2025, driven by its diversified technology portfolio and strategic investments.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.