Digimarc CORP (NASDAQ: DMRC)

Sector: Technology Industry: Software - Application CIK: 0001438231
Market Cap 142.06 Mn
P/B 3.43
P/E -3.87
P/S 4.22
ROIC (Qtr) -78.17
Div Yield % 0.00
Rev 1y % (Qtr) -19.23
Total Debt (Qtr) 4.55 Mn
Debt/Equity (Qtr) 0.11

About

Price action

Investment thesis

Bull case

  • Strong tangible asset base of 27.61M provides 6.07x coverage of total debt 4.55M, indicating robust asset backing and low credit risk.
  • Tangible assets of 27.61M provide exceptional 7.19x coverage of deferred revenue 3.84M, showing strong service capability backing.
  • Operating cash flow of (17M) fully covers other non-current liabilities (3.78M) by 4.50x, showing strong long-term stability.
  • Tangible assets of 27.61M provide robust 7.19x coverage of other current liabilities 3.84M, indicating strong asset backing.
  • R&D investment of 22.82M represents healthy 5.94x of deferred revenue 3.84M, indicating strong future innovation pipeline.

Bear case

  • Operating cash flow of (17M) barely covers its investment activities of 3.59M, with a coverage ratio of -4.73, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of 3.59M provide weak support for R&D spending of 22.82M, which is 0.16x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of (17M) provides insufficient coverage of deferred revenue obligations of 3.84M, which is -4.43x, raising concerns about future service delivery capabilities.
  • The company's operating cash flow of (17M) shows concerning coverage of stock compensation expenses of 10.99M, with a -1.55 ratio indicating potential earnings quality issues.
  • Free cash flow of (18.07M) provides weak coverage of capital expenditures of 1.07M, with a -16.89 ratio suggesting additional external financing needs for growth initiatives.

Product and Service Breakdown of Revenue (2024)

Product and Service Breakdown of Revenue (2024)

Peer comparison

Companies in the Software - Application
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SAP Sap Se 288.31 Bn 34.60 6.72 10.73 Bn
2 CRM Salesforce, Inc. 248.32 Bn 34.38 6.16 11.14 Bn
3 SHOP Shopify Inc. 212.27 Bn 119.19 19.85 1.12 Bn
4 INTU Intuit Inc. 180.73 Bn 43.89 9.30 6.78 Bn
5 UBER Uber Technologies, Inc 178.38 Bn 10.72 3.60 12.19 Bn
6 NOW ServiceNow, Inc. 146.98 Bn 84.91 11.60 2.40 Bn
7 ADBE Adobe Inc. 144.48 Bn 20.77 6.23 6.64 Bn
8 ADP Automatic Data Processing Inc 108.20 Bn 26.16 5.18 9.77 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 2.47 2.65
EV to Cash from Ops. EV/CFO -8.04 13.37
EV to Debt EV to Debt 30.06 57.69
EV to EBIT EV/EBIT -3.73 19.12
EV to EBITDA EV/EBITDA -4.56 15.00
EV to Free Cash Flow [EV/FCF] EV/FCF -7.56 14.69
EV to Market Cap EV to Market Cap 0.96 -92.28
EV to Revenue EV/Rev 4.06 4.60
Price to Book Value [P/B] P/B 3.43 4.26
Price to Earnings [P/E] P/E -3.87 -136.90
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 -3.95
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 4.25
Dividend per Basic Share Div per Share (Qtr) 0.00 0.15
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 2.52
Interest Coverage Interest Coverage 0.00 -52.32
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -42.86 -259.78
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -64.39 9,763.58
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 1.61
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 10.22 -263.15
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 15.57 56.46
EBIT Growth (1y) % EBIT 1y % (Qtr) 9.99 -225.15
EBT Growth (1y) % EBT 1y % (Qtr) 9.99 -86.10
EPS Growth (1y) % EPS 1y % (Qtr) 11.40 123.84
FCF Growth (1y) % FCF 1y % (Qtr) 36.36 -36.82
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -17.32 95.08
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.61 0.58
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.02
Cash Ratio Cash Ratio (Qtr) 0.96 3.75
Current Ratio Curr Ratio (Qtr) 2.31 8.16
Debt to Equity Ratio Debt/Equity (Qtr) 0.11 0.17
Interest Cover Ratio Interest Cover Ratio 0.00 -52.32
Times Interest Earned Times Interest Earned 0.00 -52.32
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -85.40 -100.06
EBIT Margin % EBIT Margin % (Qtr) -109.02 -164.24
EBT Margin % EBT Margin % (Qtr) -109.02 -116.94
Gross Margin % Gross Margin % (Qtr) 60.90 58.20
Net Profit Margin % Net Margin % (Qtr) -109.20 -121.65