Socket Mobile, Inc. (NASDAQ: SCKT)

Sector: Technology Industry: Computer Hardware CIK: 0000944075
Market Cap 7.91 Mn
P/B 0.50
P/E -2.68
P/S 0.50
ROIC (Qtr) -12.59
Div Yield % 0.00
Rev 1y % (Qtr) -19.77
Total Debt (Qtr) 7.90 Mn
Debt/Equity (Qtr) 0.50

About

Socket Mobile, Inc., a company commonly recognized by its ticker symbol SCKT, operates in the data capture and delivery solutions industry. The company has made significant strides from its origins as a hardware peripheral provider to a comprehensive data capture organization, generating revenue through software and hardware solutions. These offerings include barcode scanners and NFC/RFID readers that facilitate efficient data capture and delivery for a mobile workforce. Socket Mobile's primary business activities revolve around the design and...

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Price action

Investment thesis

Bull case

  • Strong tangible asset base of 24.31M provides 3.08x coverage of total debt 7.90M, indicating robust asset backing and low credit risk.
  • Tangible assets of 24.31M provide exceptional 64.97x coverage of deferred revenue 374130, showing strong service capability backing.
  • Operating cash flow of (1.69M) fully covers other non-current liabilities (362920) by 4.65x, showing strong long-term stability.
  • Robust tangible asset base of 24.31M provides 30.94x coverage of working capital 785689, indicating strong operational backing.
  • Tangible assets of 24.31M provide robust 27.87x coverage of other current liabilities 872097, indicating strong asset backing.

Bear case

  • Investment activities of (599874) provide weak support for R&D spending of 4.38M, which is -0.14x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of (1.69M) provides insufficient coverage of deferred revenue obligations of 374130, which is -4.51x, raising concerns about future service delivery capabilities.
  • The company's operating cash flow of (1.69M) shows concerning coverage of stock compensation expenses of 740452, with a -2.28 ratio indicating potential earnings quality issues.
  • Free cash flow of (2.29M) provides weak coverage of capital expenditures of 599874, with a -3.81 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of (3.04M) show weak coverage of depreciation charges of 1.82M, with a -1.67 ratio indicating high capital intensity and potential reinvestment needs.

Peer comparison

Companies in the Computer Hardware
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 ANET Arista Networks, Inc. 164.72 Bn 49.07 19.50 0.00 Bn
2 DELL Dell Technologies Inc. 86.37 Bn 16.20 0.83 31.24 Bn
3 WDC Western Digital Corp 60.34 Bn 23.73 5.03 4.68 Bn
4 STX Seagate Technology Holdings plc 58.67 Bn 34.25 6.14 4.99 Bn
5 SNDK Sandisk Corp 34.41 Bn -19.78 4.42 1.35 Bn
6 PSTG Pure Storage, Inc. 21.84 Bn 167.52 6.27 0.23 Bn
7 HPQ Hp Inc 21.10 Bn 8.34 0.38 9.67 Bn
8 SMCI Super Micro Computer, Inc. 17.45 Bn 22.01 0.83 4.78 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.52 2.06
EV to Cash from Ops. EV/CFO -7.90 -0.65
EV to Debt EV to Debt 1.69 56.37
EV to EBIT EV/EBIT -4.39 2.89
EV to EBITDA EV/EBITDA -10.93 -1.74
EV to Free Cash Flow [EV/FCF] EV/FCF -5.83 -7.44
EV to Market Cap EV to Market Cap 1.69 7.64
EV to Revenue EV/Rev 0.84 78.30
Price to Book Value [P/B] P/B 0.50 -28.73
Price to Earnings [P/E] P/E -2.68 6.39
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 1.25
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 12.30
Dividend per Basic Share Div per Share (Qtr) 0.00 0.27
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 7.93
Interest Coverage Int. cover (Qtr) -6.65 -105.42
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 49.43 -11.38
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -30.81 867.36
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 4.71
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -109.47 -189.41
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -22.85 -40.76
EBIT Growth (1y) % EBIT 1y % (Qtr) -20.29 -117.00
EBT Growth (1y) % EBT 1y % (Qtr) -23.65 -116.68
EPS Growth (1y) % EPS 1y % (Qtr) -111.11 -70.06
FCF Growth (1y) % FCF 1y % (Qtr) -117.90 712.64
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -14.45 34.90
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.62 0.80
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.06
Cash Ratio Cash Ratio (Qtr) 0.25 7.26
Current Ratio Curr Ratio (Qtr) 1.10 13.59
Debt to Equity Ratio Debt/Equity (Qtr) 0.50 -3.57
Interest Cover Ratio Int Coverage (Qtr) -6.65 -105.42
Times Interest Earned Times Interest Earned (Qtr) -6.65 -105.42
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -7.70 -629.92
EBIT Margin % EBIT Margin % (Qtr) -19.06 -683.67
EBT Margin % EBT Margin % (Qtr) -21.93 -687.58
Gross Margin % Gross Margin % (Qtr) 49.90 34.79
Net Profit Margin % Net Margin % (Qtr) -18.50 -692.43