TOMI Environmental Solutions TOMZ

NASDAQ TOMZ
$1.82 +0.08 (+4.60%)
At close: Aug 20, 2026 · 4:00 PM EDT
Financial Ratios
Market Cap13.98 Mn
P/E-4.05
P/S2.02
Div. Yield0.00
ROIC (Qtr)0.00
Revenue Growth (1y) (Qtr)117.91
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About

TOMI Environmental Solutions, Inc. is a global provider of disinfection and decontamination solutions, offering environmentally friendly products and services for indoor air and surface treatment. The company’s flagship product line, SteraMist, uses patented Binary Ionization Technology (BIT) to deliver a low-concentration hydrogen peroxide-based fog or mist that treats indoor environments and achieves a 6-log kill rate against pathogens, leaving only oxygen and humidity…

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Sectors: Industrials · Healthcare Sector rationale TOMI's primary revenue comes from the sale of industrial disinfection equipment (SteraMist), consumables, and decontamination services sold across diverse sectors including food safety, aviation, and commercial restoration. While it has a significant presence in the healthcare and life sciences markets, its core business model is the manufacture and sale of capital equipment and operating services for environmental treatment, which falls under Industrials (specifically Pollution Control Equipment or Facility Services). A secondary sector of Healthcare is justified because a substantial portion of its revenue and customer base is derived from hospitals, pharmaceutical manufacturers, and research institutions for clinical decontamination. Industries: Pollution Control Equipment Industrials Primary TOMI manufactures and sells SteraMist equipment and BIT Solution consumables designed for indoor air and surface decontamination. These products are sold to industrial, commercial, and municipal customers to control pathogens and pollution in indoor environments. Medical Supplies Healthcare Secondary The company provides disinfection solutions specifically for the Hospital-Healthcare segment, targeting operating rooms and pharmacies to combat healthcare-associated infections, which falls under medical supplies and consumables. Classified using BQ-MICS CIK: 0000314227

Investment Thesis

▲ Bull case
  • The company reported a 16% increase in backlog for support services and a 24% increase in backlog for BIT solution in the Q1 FY26 compared to the same period last year indicating growing demand for recurring services. This trend suggests that customers are shifting from one time equipment purchases to ongoing service contracts which creates more predictable revenue streams. Management highlighted that the shift to open BIT solution orders and annual service offerings is driven by improved training programs and better ability to forecast solution consumption. The resulting increase in service revenue improves margins and reduces reliance on volatile capital expenditure cycles.
  • The OEM partnership strategy with PBSC ESCO and Steelco integrates the iHP technology directly into clean room enclosures pass through hatches and biosafety cabinets at the point of manufacture. This approach creates a scalable distribution channel that expands reach without proportionally increasing direct sales costs. Early collaboration with PBSC produced an iHP pass through that exceeded decontamination cycle speed expectations and generated strong customer feedback leading to a second project. By embedding the technology in partner equipment the company can leverage the partners sales force and installed base to drive adoption while keeping its own overhead low.
  • The FDA's late 2025 approval of hydrogen peroxide as a direct food additive for multiple uses including antimicrobial and bleaching creates a regulatory tailwind for the food safety segment. Management is actively pursuing a food contact notification for powdered infant formula in response to an existing customer request which could unlock a large niche market. In addition the company awaits EPA approval of a minus four label for cannabis and other requested markets which would allow broader use in agriculture and vertical farming. Successful navigation of these regulatory pathways would diversify revenue streams beyond the traditional life science and healthcare focus.
  • The company notes that obtaining FDA 510k clearance would enable it to pursue the entire ethylene oxide sterilization market which was valued at 5.29 billion dollars in the prior year. Success in this market would represent a substantial growth avenue given rising demand for sterilized medical consumables and improved healthcare infrastructure. Internationally the business has secured recognition in the United Kingdom the Netherlands and is progressing with additional EU registrations which should facilitate sales through existing distributors. The combination of a large addressable medical sterilization market and expanding international footprint provides a structural shift that could drive revenue well above current levels.
▼ Bear case
  • The company ended 2025 with only approximately eighty eight thousand dollars in cash and used 1.2 million dollars in operating cash during the year indicating a tight liquidity position. Although it has secured a twenty million dollar equity line of credit with Hudson Global Ventures and drawn about ninety four thousand dollars the reliance on external financing raises the risk of shareholder dilution if additional draws are needed. Management also mentions a S3 shelf registration for up to fifty million dollars which could further increase dilution if utilized to fund operations. The need for continual capital inflows to support working capital and growth initiatives makes the balance sheet a vulnerability that the market may be underestimating.
  • Several customers have delayed capital expenditure projects citing DOGE tariffs and political uncertainty including the war which directly impacted 2025 revenue and could continue to affect order timing in 2026. The CEO noted that a major west coast university postponed a purchase until the end of 2026 due to those same factors showing that macro external pressures can override internal sales momentum. Because a significant portion of the pipeline depends on a limited number of large accounts any further deferrals could disproportionately impact revenue recognition. The business model therefore remains exposed to cyclical political and trade policy shifts that are difficult to predict or control.
  • While the company has highlighted pending FDA food contact notifications and EPA label approvals the timelines for these regulatory outcomes are uncertain and any delay would postpone expected revenue from new verticals such as infant formula and cannabis. The life science sterilization market is served by established technologies including ethylene oxide vaporized hydrogen peroxide and other low temperature sterilizers creating strong competition for the iHP platform. Success in securing FDA 510k clearance is not guaranteed and failure would limit the company ability to address the large ethylene oxide market. The reliance on regulatory approvals as a near term catalyst introduces execution risk that could cause the market to overestimate near term growth.
  • The company operates with a small team of approximately twenty employees which may constrain its ability to scale operations quickly if a large influx of orders materializes. Although OEM partnerships with PBSC ESCO and Steelco provide a distribution channel they also create dependence on partners sales efforts and integration timelines that are outside of the company direct control. Growth through partnerships can dilute margins if revenue sharing arrangements are required and may slow the pace of product adoption relative to a direct sales force. The combination of limited internal resources and reliance on external partners could hinder the company capacity to convert its pipeline into revenue at the speed implied by its optimistic outlook.

Statement Geographical Axis Breakdown of Revenue (2022)

Peer Comparison

Companies in the Pollution & Treatment Controls
S.No. Ticker Company Market CapP/EP/STotal Debt (Qtr)
1 VLTO Veralto Corp 24.35 Bn24.654.284.08 Bn
2 ZWS Zurn Elkay Water Solutions Corp 8.16 Bn29.574.570.50 Bn
3 FSS Federal Signal Corp /De/ 7.42 Bn25.993.030.45 Bn
4 CECO Ceco Environmental Corp 3.17 Bn-112.653.510.73 Bn
5 PCT PureCycle Technologies, Inc. 1.24 Bn-4.2490.290.35 Bn
6 ADUR Aduro Clean Technologies Inc. 0.52 Bn-50.243,008.86-
7 ERII Energy Recovery, Inc. 0.40 Bn25.953.30-
8 ARQ Arq, Inc. 0.09 Bn-1.810.760.03 Bn