374Water Inc. (NASDAQ: SCWO)

Sector: Industrials Industry: Pollution & Treatment Controls CIK: 0000933972
Market Cap 40.61 Mn
P/B 6.25
P/E -2.33
P/S 21.26
ROIC (Qtr) -201.90
Div Yield % 0.00
Rev 1y % (Qtr) 833.14
Total Debt (Qtr) 1.39 Mn
Debt/Equity (Qtr) 0.21
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About

374Water Inc., also known by its ticker symbol SCWO, operates in the environmental technology industry. The company's main business activities revolve around the development, commercialization, and marketing of its innovative AirSCWO technology. This technology is designed to transform a variety of complex, hazardous, and non-hazardous wet waste streams into valuable resources, such as water, energy, and minerals. The company generates revenue primarily through the sale of its AirSCWO systems. These systems are modular and containerized, making...

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Investment thesis

Bull case

  • Strong tangible asset base of 10.40M provides 7.46x coverage of total debt 1.39M, indicating robust asset backing and low credit risk.
  • Tangible assets of 10.40M provide exceptional 26.64x coverage of deferred revenue 390463, showing strong service capability backing.
  • Operating cash flow of (13.30M) fully covers other non-current liabilities (360463) by 36.89x, showing strong long-term stability.
  • Robust tangible asset base of 10.40M provides 5.46x coverage of working capital 1.90M, indicating strong operational backing.
  • Tangible assets of 10.40M provide robust 4.73x coverage of other current liabilities 2.20M, indicating strong asset backing.

Bear case

  • Investment activities of (1.01M) provide weak support for R&D spending of 2.44M, which is -0.42x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of (13.30M) provides insufficient coverage of deferred revenue obligations of 390463, which is -34.05x, raising concerns about future service delivery capabilities.
  • The company's operating cash flow of (13.30M) shows concerning coverage of stock compensation expenses of 2.71M, with a -4.91 ratio indicating potential earnings quality issues.
  • Operating earnings of (17.40M) show weak coverage of depreciation charges of 816377, with a -21.32 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of (14.30M) provides weak coverage of capital expenditures of 1M, with a -14.29 ratio suggesting additional external financing needs for growth initiatives.

Peer comparison

Companies in the Pollution & Treatment Controls
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 VLTO Veralto Corp 22.76 Bn 26.05 4.31 2.67 Bn
2 ZWS Zurn Elkay Water Solutions Corp 8.65 Bn 43.69 5.10 0.54 Bn
3 FSS Federal Signal Corp /De/ 7.21 Bn 168.93 10.04 0.24 Bn
4 CECO Ceco Environmental Corp 2.77 Bn 53.33 3.85 0.24 Bn
5 PCT PureCycle Technologies, Inc. 1.46 Bn -6.40 258.45 0.43 Bn
6 ERII Energy Recovery, Inc. 0.91 Bn 46.74 6.75 0.00 Bn
7 ADUR Aduro Clean Technologies Inc. 0.33 Bn -23.93 1,516.99 0.00 Bn
8 ARQ Arq, Inc. 0.13 Bn -34.10 1.13 0.03 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 3.44 3.33
EV to Cash from Ops. EV/CFO -2.94 -65.71
EV to Debt EV to Debt 28.04 136.79
EV to EBIT EV/EBIT -2.25 3.75
EV to EBITDA EV/EBITDA -2.33 8.77
EV to Free Cash Flow [EV/FCF] EV/FCF -2.74 2.21
EV to Market Cap EV to Market Cap 0.96 1.03
EV to Revenue EV/Rev 20.47 89.55
Price to Book Value [P/B] P/B 6.25 6.68
Price to Earnings [P/E] P/E -2.33 15.25
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 1.12
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 3.26
Dividend per Basic Share Div per Share (Qtr) 0.00 0.07
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 2.56
Interest Coverage Int. cover (Qtr) 0.00 -107.95
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -3.38 -82.15
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -52.39 79.04
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.42
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -62.05 -265.30
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -50.44 -75.61
EBIT Growth (1y) % EBIT 1y % (Qtr) -62.05 -272.40
EBT Growth (1y) % EBT 1y % (Qtr) -62.05 -325.95
EPS Growth (1y) % EPS 1y % (Qtr) -50.00 2,177.75
FCF Growth (1y) % FCF 1y % (Qtr) -32.38 -76.02
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 56.18 7.23
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.17 0.42
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.02
Cash Ratio Cash Ratio (Qtr) 0.22 2.16
Current Ratio Curr Ratio (Qtr) 1.44 3.56
Debt to Equity Ratio Debt/Equity (Qtr) 0.21 0.60
Interest Cover Ratio Int Coverage (Qtr) 0.00 -107.95
Times Interest Earned Times Interest Earned (Qtr) 0.00 -107.95
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -868.30 -775.28
EBIT Margin % EBIT Margin % (Qtr) -911.01 -2,721.83
EBT Margin % EBT Margin % (Qtr) -911.01 -2,762.77
Gross Margin % Gross Margin % (Qtr) -29.80 -44.42
Net Profit Margin % Net Margin % (Qtr) -911.00 -2,763.74