Creative Realities (CREX) AI Stock Analysis

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Creative Realities

(NASDAQ:CREX)

Rating:50Neutral

Price Target:

$3.00

▼( -5.66% Downside)

Creative Realities has potential, driven by strategic partnerships and cost management. However, profitability issues, high debt, and a negative valuation score limit its attractiveness. The resolution of a legal dispute offers some positive outlook, but immediate financial challenges remain.

Creative Realities (CREX) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$33.45M

Dividend YieldN/A

Average Volume (3M)65.71K

Price to Earnings (P/E)27.0

Beta (1Y)1.45

Revenue Growth1.68%

EPS Growth98.96%

CountryUS

Employees146

SectorTechnology

Sector Strength77

IndustrySoftware - Application

Share Statistics

EPS (TTM)0.32

Shares Outstanding10,518,932

10 Day Avg. Volume117,137

30 Day Avg. Volume65,712

Financial Highlights & Ratios

PEG Ratio-7.32

Price to Book (P/B)0.74

Price to Sales (P/S)0.00

P/FCF Ratio-7.44

Enterprise Value/Market Cap0.77

Enterprise Value/Revenue0.13

Enterprise Value/Gross Profit1.09

Enterprise Value/Ebitda1.90

Forecast

1Y Price Target

$6.00

Price Target Upside88.68% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

Creative Realities Business Overview & Revenue Model

Company DescriptionCreative Realities, Inc., together with its subsidiaries, provides digital marketing technology and solutions to retail companies, individual retail brands, enterprises, and organizations in the United States and internationally. Its technology and solutions include digital merchandising systems and omni-channel customer engagement systems; interactive digital shopping assistants; advisors and kiosks; and other interactive marketing technologies, such as mobile, social media, point-of-sale transactions, beaconing, and Web-based media that enables its customers to engage with their consumers. The company also provides system hardware; professional and implementation services; software design and development; and software licensing, deployment, and maintenance and support services, as well as media management and distribution software platforms and networks; device and product management; and customized software service layers, systems, experiences, workflows, and integrated solutions. The company sells its solutions to the automotive, apparel and accessories, banking, baby/children, beauty, CPG, department stores, digital out-of-home, electronics, fashion, fitness, foodservice/quick service restaurant, financial services, gaming, luxury, mass merchants, mobile operators, and pharmacy retail industries. Creative Realities, Inc. is headquartered in Louisville, Kentucky.

How the Company Makes MoneyCreative Realities generates revenue primarily through the sale and installation of digital signage solutions and associated software services. The company earns money by offering comprehensive end-to-end solutions, which include consulting, design, hardware installation, software licensing, and ongoing support and maintenance. Key revenue streams include one-time project fees for custom installations and recurring revenue from software subscriptions and managed services. Significant partnerships with hardware manufacturers and software providers enhance the company's offerings, contributing to its overall earnings.

Creative Realities Financial Statement Overview

Summary

Creative Realities demonstrates potential through revenue growth and improving gross margins, yet struggles with consistent profitability and cash flow management. While the balance sheet is moderately stable, high debt levels present a risk. Focusing on improving operational efficiencies and cash flow generation will be crucial for future financial health.

Income Statement

Neutral

Creative Realities has shown inconsistent profitability with fluctuating net income, moving from a profit in 2022 to notable losses in subsequent periods. Despite increased revenues over the years, the net profit margin remains negative due to operating inefficiencies and costs. The gross profit margin is relatively stable, indicating good cost management in production. Revenue growth has been positive, but the company needs to improve its profitability metrics to achieve a healthier financial position.

Balance Sheet

Positive

The company's balance sheet reflects moderate financial stability with a reasonable debt-to-equity ratio, although total debt remains high. Stockholders' equity has strengthened over the years, supported by asset growth and increased retained earnings. However, the equity ratio shows room for improvement. The company must focus on reducing liabilities to enhance financial resilience.

Cash Flow

Neutral

Creative Realities has experienced volatility in cash flow, with operating cash flow turning negative in the most recent TTM period. Free cash flow has also been negative, reflecting high capital expenditures and operational challenges. The cash flow to net income ratios indicate that cash generation is weak relative to reported net income, underscoring the need for better cash management strategies.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
48.30M	50.85M	45.17M	43.35M	18.44M	17.46M
	Gross Profit
23.54M	24.01M	22.18M	17.74M	8.36M	8.12M
	EBIT
292.00K	938.00K	1.35M	-2.72M	782.00K	-5.41M
	EBITDA
966.00K	2.45M	3.36M	945.00K	-667.00K	-14.51M
	Net Income Common Stockholders
-31.00K	-3.51M	-2.94M	1.88M	232.00K	-16.84M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.15M	1.04M	2.91M	1.63M	2.88M	1.83M
	Total Assets
66.99M	65.21M	70.78M	66.02M	22.88M	20.62M
	Total Debt
4.70M	13.85M	14.56M	19.16M	7.53M	10.84M
	Net Debt
3.55M	12.81M	11.65M	17.52M	4.65M	9.01M
	Total Liabilities
37.12M	39.75M	41.95M	40.44M	14.15M	16.28M
	Stockholders Equity
29.87M	25.46M	28.83M	25.58M	8.73M	4.33M
Cash Flow		Free Cash Flow
-2.98M	580.00K	1.14M	-5.00M	-688.00K	-4.19M
	Operating Cash Flow
-1.01M	3.38M	5.17M	-708.00K	471.00K	-3.53M
	Investing Cash Flow
-2.59M	-2.80M	-4.03M	-21.48M	-1.16M	-657.00K
	Financing Cash Flow
1.85M	-2.45M	137.00K	20.93M	1.75M	3.48M

Creative Realities Technical Analysis

Technical Analysis Sentiment

Positive

Last Price3.18

Price Trends

50DMA

1.83

Positive

100DMA

2.12

Positive

200DMA

3.05

Positive

Market Momentum

MACD

0.25

Negative

RSI

81.90

Negative

STOCH

89.09

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CREX, the sentiment is Positive. The current price of 3.18 is above the 20-day moving average (MA) of 1.99, above the 50-day MA of 1.83, and above the 200-day MA of 3.05, indicating a bullish trend. The MACD of 0.25 indicates Negative momentum. The RSI at 81.90 is Negative, neither overbought nor oversold. The STOCH value of 89.09 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CREX.

Creative Realities Risk Analysis

Creative Realities disclosed 39 risk factors in its most recent earnings report. Creative Realities 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 3 New Risks

Corporate social responsibility, specifically related to ESG, may impose additional costs and expose us to new risks. Q4, 2024

Inflation and price volatility in the global economy could hurt our business and results of operations. Q4, 2024

Uncertain global macro-economic and political conditions could materially adversely affect our results of operations and financial condition. Q4, 2024

Creative Realities Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	61 Neutral	$11.29B	10.07	-7.05%	2.96%	7.47%	-10.75%
CREX	50 Neutral	$33.45M	27.05	-0.11%	―	1.68%	98.96%
SMSI	47 Neutral	$15.34M	―	-55.77%	―	-45.77%	67.69%
XTKG		$19.55M	―	-55.41%	―	―	―
IPM	47 Neutral	$19.77M	―	-17.07%	―	-13.06%	-151.73%
NXPL	46 Neutral	$16.36M	―	-49.11%	―	19.37%	-197.96%
QH	36 Underperform	$102.25M	―	0.61%	―	-18.93%	-1133.29%

* Technology Sector Average

Performance Comparison

CREX

Creative Realities

3.18

-0.44

-12.15%

SMSI

Smith Micro Software

0.79

-1.66

-67.76%

XTKG

X3 Holdings

1.42

-12.81

-90.02%

IPM

Intelligent Protection Management

2.14

-1.16

-35.15%

NXPL

NextPlat

0.62

-0.48

-43.64%

Quhuo

1.15

0.57

98.28%

Creative Realities Earnings Call Summary

Earnings Call Date:May 14, 2025

(Q1-2025)

% Change Since: 78.65%|

Next Earnings Date:Aug 18, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mixed picture with notable achievements like a significant new partnership and effective cost management, but these were balanced by revenue declines, increased debt, and project delays. While the company is optimistic about future growth and financial flexibility, the immediate challenges reflect a balanced sentiment.

Q1-2025 Updates

Positive Updates

Quick Service Restaurant Win

CRI was selected by a well-known upscale quick service restaurant chain with over 1,000 locations to lead the transformation of its indoor and outdoor menu boards. This partnership will play a key role in the chain's digital transformation strategy with a national rollout expected after a successful pilot.

Operating Cost Reduction

Aggregate SG&A expenses were reduced by 11% to $5.2 million in Q1 2025 compared to $5.8 million in Q1 2024, improving profitability as revenue is expected to scale back for the rest of the year.

Adjusted EBITDA Stability

Despite revenue declines, adjusted EBITDA was nominally changed at $0.5 million due to active management of overhead costs.

Debt Contingency Settlement

CRI resolved a $12.8 million contingent liability for $7 million, providing financial visibility and flexibility.

New Product Introduction

The introduction of the AdLogic CPM platform is progressing well, offering customers a self-serve interface that enhances targeting precision and reduces campaign costs.

Negative Updates

Revenue Decline

Revenue decreased to $9.7 million in Q1 2025 from $12.3 million in Q1 2024, attributed to installation timing on several large projects.

Gross Profit Decline

Gross profit fell to $4.5 million from $5.8 million in Q1 2024, although gross margin remained stable at 46%.

Increased Debt Levels

Gross and net debt increased to approximately $23.2 million and $22.1 million, respectively, at the end of Q1 2025 from $13 million and $12 million at the start of the year.

BCTV Project Delay

The BCTV project experienced slower progress in the first two quarters of 2025, impacting expected revenue timelines.

Company Guidance

In the first quarter of 2025, Creative Realities reported a revenue of $9.7 million, a decrease from $12.3 million in the same period of 2024, primarily due to installation timing on several large projects. Gross profit for the quarter stood at $4.5 million compared to $5.8 million the previous year, maintaining a gross margin of 46%. The company experienced a slight increase in annual recurring revenue, reaching a run rate of $17.3 million. Adjusted EBITDA remained stable at $0.5 million, attributed to a reduction in SG&A expenses by 11%, down to $5.2 million from $5.8 million in the prior year. Operating costs also decreased sequentially from $5.6 million in Q4. Despite an increase in debt to $23.2 million, due to the settlement of a contingent liability, the company managed to reduce its contingent liability risk significantly. Creative Realities remains optimistic about its future, forecasting an acceleration in revenue beginning in the second quarter and aiming for an adjusted EBITDA margin of 15% by the end of the year. The company continues to focus on strategic growth and debt management while engaging in promising new opportunities, such as a major partnership with a national quick service restaurant chain.

Creative Realities Corporate Events

M&A TransactionsLegal Proceedings

Creative Realities Resolves Merger Dispute with Settlement

Positive

Mar 17, 2025

Creative Realities, Inc. announced a settlement agreement with former stockholders of Reflect Systems, Inc., resolving a dispute over contingent supplemental cash payments related to their merger. The settlement, finalized on March 14, 2025, involves a $3 million cash payment, a $4 million promissory note, and the issuance of warrants to purchase company stock, providing financial flexibility and removing uncertainty for stakeholders.

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.