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Cyanotech Corp. (CYAN)
OTHER OTC:CYAN
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Cyanotech
(OTC:CYAN)
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Rating:51Neutral
Price Target:
$0.53
▲(52.29% Upside)
The score is held back primarily by weak financial performance—ongoing losses, high leverage, and negative operating cash flow with declining free cash flow. Technicals are a relative bright spot with the price above key moving averages and positive momentum, but valuation remains unattractive/unclear due to loss-making earnings and no dividend support.
Positive Factors
Product portfolio & demand
Cyanotech's core products (Astaxanthin, Spirulina) address enduring consumer demand for natural, premium supplements. Specialized cultivation and high-quality sustainable production support repeat purchases, brand differentiation, and supplier credibility that sustain revenue resilience over quarters.
Gross margin level
A ~29.7% gross margin indicates product-level economics that can absorb distribution and some SG&A while preserving unit profitability. With disciplined operating cost control and scale, this gross margin provides a structural foundation to recover operating profits and reinvest in growth.
Asset-backed production capacity
The firm's substantial asset base likely reflects owned cultivation and processing facilities. These capital assets enable quality control, supply reliability and scalability, creating durable barriers to entry and long-term operational advantages versus asset-light competitors.
Negative Factors
Persistent unprofitability
A negative net margin of -12.13% shows the company fails to convert sales into profit. Sustained losses erode equity and limit internal funding for capex or marketing. Without structural margin improvements, Cyanotech will remain reliant on external capital, raising medium-term risk.
Elevated leverage
A debt-to-equity ratio of 1.49 indicates material leverage that increases fixed financial obligations. High debt servicing reduces strategic flexibility, amplifies sensitivity to interest rates or revenue shocks, and can force prioritization of deleveraging over growth or R&D investments.
Weak cash generation
Negative operating cash flow and a 23.45% decline in free cash flow signal operations don't self-fund capex or debt service. This persistent cash shortfall increases reliance on external financing, constrains strategic initiatives, and raises liquidity and refinancing risks over the next several quarters.
Cyanotech (CYAN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.73M
Dividend YieldN/A
Average Volume (3M)6.46K
Price to Earnings (P/E)―
Beta (1Y)-0.35
Revenue Growth8.47%
EPS Growth68.88%
CountryUS
Employees77
SectorConsumer Defensive
Sector Strength42
IndustryPackaged Foods
Share Statistics
EPS (TTM)0.00
Shares Outstanding7,392,243
10 Day Avg. Volume1,585
30 Day Avg. Volume6,463
Financial Highlights & Ratios
PEG Ratio0.02
Price to Book (P/B)0.28
Price to Sales (P/S)0.10
P/FCF Ratio-1.72
Enterprise Value/Market Cap1.90
Enterprise Value/Revenue0.28
Enterprise Value/Gross Profit0.87
Enterprise Value/Ebitda7.76
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Cyanotech Business Overview & Revenue Model
Company DescriptionCyanotech Corporation (CYAN) is a biotechnology company based in Hawaii that specializes in the cultivation and processing of microalgae. Operating primarily in the nutritional supplements and specialty chemical sectors, Cyanotech produces high-quality products such as Astaxanthin, a powerful antioxidant derived from the microalgae Haematococcus pluvialis, and Spirulina, a nutrient-rich blue-green algae. The company's core offerings are focused on health and wellness, catering to consumers seeking natural dietary supplements and functional foods.
How the Company Makes MoneyCyanotech generates revenue through the sale of its microalgae-based products, with key revenue streams including the sale of Astaxanthin and Spirulina in various forms such as powder, capsules, and tablets. The company markets its products directly to consumers, health food stores, and nutritional supplement manufacturers. Additionally, Cyanotech engages in partnerships with other companies for distribution and co-branding opportunities, which enhance its market reach and product visibility. The growing consumer demand for natural and organic supplements, along with Cyanotech's commitment to sustainable and high-quality production practices, contributes significantly to its earnings.
Cyanotech Earnings Call Summary
Earnings Call Date:Nov 12, 2024
(Q2-2025)
| % Change Since: |
Next Earnings Date:Jun 30, 2026
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with notable growth in contract extraction revenue and improved inventory and capital metrics. However, significant declines in net sales, gross profit margin, and an increased net loss, largely due to inventory challenges, highlight ongoing challenges.Q2-2025 Updates
Positive Updates
Increase in Work-in-progress Inventory
Mid-quarter financing allowed Cyanotech to increase work in progress inventory by $1.9 million, despite a decrease in finished goods inventory.
Significant Growth in Contract Extraction Revenue
Revenue from contract extraction grew by 156%, reflecting a strong demand in this segment.
Increase in Cash and Working Capital
Cash increased to $780,000 and working capital increased to $550,000, up from $720,000 and $200,000 respectively as of June 30, 2024.
Negative Updates
Decrease in Total Net Sales
Total net sales for the second quarter of fiscal 2025 were $5.8 million, down from $6.4 million in the same quarter of fiscal 2024, marking a decrease of $528,000 or 8.3%.
Decline in Gross Profit and Margin
Gross profit fell to $1.48 million with a margin of 25.3%, compared to $2 million and 32.8% in the prior year, primarily due to a higher percentage of lower-margin bulk sales.
Increased Operating and Net Loss
Operating loss increased to $975,000 from $632,000, and net loss increased to $1.15 million or $0.16 per diluted share from $0.8 million or $0.13 per diluted share.
Decrease in Packaged Goods Sales
Packaged goods sales declined by 21% due to stock shortages and timing issues, contributing to an overall 8% drop in total sales for the quarter.
Company Guidance
In the earnings call for Cyanotech's Q2 2025, management highlighted several key metrics and provided guidance on future performance. Despite a 39% increase in bulk inventory sales and a 156% rise in contract extraction revenue, overall sales for the quarter dropped by 8% due to a 21% decline in packaged goods sales caused by stock shortages. For the first half of the year, sales were up by 2%. Total net sales for the quarter were $5.8 million, down from $6.4 million in Q2 2024, with a gross profit margin declining from 32.8% to 25.3%, driven by a higher sales mix of lower-margin bulk products. Operating loss increased to $975,000 from $632,000 in the previous year, and net loss was $1.15 million or $0.16 per diluted share, compared to $0.8 million or $0.13 per share in Q2 2024. The company reported cash reserves of $780,000 and an improved working capital of $550,000, attributed to higher inventories and a short-term debt reclassification. Management is focused on addressing inventory challenges to improve the sales mix and maintain strong sales in their algae-based products.Cyanotech Financial Statement Overview
Summary
Despite modest TTM revenue growth (4.69%) and a moderate gross margin (29.72%), overall fundamentals are weak: negative net margin (-12.13%) and negative EBIT/EBITDA margins indicate ongoing operating losses. Leverage is elevated (debt-to-equity 1.49) with negative ROE, and liquidity is pressured by negative operating cash flow and a 23.45% decline in free cash flow.Income Statement
Cyanotech's income statement reveals a challenging financial situation. The company has experienced a slight revenue growth of 4.69% in the TTM period, but profitability metrics are concerning. The gross profit margin is moderate at 29.72%, yet the net profit margin is negative at -12.13%, indicating losses. EBIT and EBITDA margins are also negative, reflecting operational inefficiencies. Despite some revenue growth, the company struggles with profitability, which is a significant weakness.45
Neutral
Balance Sheet
The balance sheet shows a high debt-to-equity ratio of 1.49 in the TTM period, suggesting significant leverage. Return on equity is negative, indicating that the company is not generating returns for shareholders. The equity ratio is not provided, but the high leverage and negative ROE highlight financial instability. While the company has a substantial asset base, the high debt levels pose a risk.50
Neutral
Cash Flow
Cyanotech's cash flow statement highlights cash management challenges. The operating cash flow is negative, and free cash flow has declined by 23.45% in the TTM period. The operating cash flow to net income ratio is negative, indicating cash flow issues relative to earnings. Although free cash flow to net income is slightly positive, the overall cash flow situation is concerning, reflecting liquidity challenges.40
Negative
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 25.27M | 24.21M | 23.07M | 23.18M | 35.97M | 32.34M |
| Gross Profit | 8.09M | 6.88M | 5.95M | 7.26M | 13.57M | 11.12M |
| EBITDA | 910.00K | -629.00K | -2.51M | -825.00K | 4.50M | 3.54M |
| Net Income | -1.78M | -3.20M | -5.27M | -3.44M | 2.15M | 920.00K |
Balance Sheet | ||||||
| Total Assets | 24.03M | 23.49M | 25.11M | 29.73M | 32.05M | 30.88M |
| Cash, Cash Equivalents and Short-Term Investments | 649.00K | 257.00K | 707.00K | 974.00K | 2.59M | 3.77M |
| Total Debt | 4.02M | 11.56M | 10.90M | 11.17M | 9.00M | 10.89M |
| Total Liabilities | 15.96M | 14.61M | 13.30M | 13.38M | 12.56M | 13.84M |
| Stockholders Equity | 8.06M | 8.88M | 11.81M | 16.35M | 19.49M | 17.04M |
Cash Flow | ||||||
| Free Cash Flow | -1.44M | -1.44M | -836.00K | -3.17M | 1.11M | 1.64M |
| Operating Cash Flow | -1.21M | -1.19M | -455.00K | -2.10M | 2.38M | 2.40M |
| Investing Cash Flow | -228.00K | -247.00K | -381.00K | -1.07M | -1.27M | -760.00K |
| Financing Cash Flow | 1.31M | 990.00K | 569.00K | 1.55M | -2.29M | -290.00K |
Cyanotech Technical Analysis
Positive
0.35
Price Trends
0.42
Positive
0.37
Positive
0.37
Positive
Market Momentum
0.02
Negative
57.41
Neutral
77.85
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CYAN, the sentiment is Positive. The current price of 0.35 is below the 20-day moving average (MA) of 0.45, below the 50-day MA of 0.42, and below the 200-day MA of 0.37, indicating a bullish trend. The MACD of 0.02 indicates Negative momentum. The RSI at 57.41 is Neutral, neither overbought nor oversold. The STOCH value of 77.85 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CYAN.
Cyanotech Risk Analysis
Cyanotech disclosed 30 risk factors in its most recent earnings report. Cyanotech 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 0 New Risks
Cyanotech Peers Comparison
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $462.58M | 31.85 | 9.52% | ― | 6.62% | -7.85% | |
70 Outperform | $829.98M | 13.87 | 9.41% | ― | 8.33% | 47.71% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
56 Neutral | $395.96M | 22.96 | 3.20% | ― | 5.88% | -68.62% | |
52 Neutral | $32.49M | -15.47 | -14.63% | ― | 17.73% | -34.71% | |
51 Neutral | $3.73M | -2.03 | -31.37% | ― | 8.47% | 68.88% | |
45 Neutral | $112.30M | -0.20 | -75.51% | ― | -10.13% | -532.32% |
* Consumer Defensive Sector Average
CYAN
Cyanotech
0.50
0.14
38.89%
NATR
Nature's Sunshine Products
25.85
11.69
82.56%
SENEA
Seneca Foods
119.63
46.29
63.12%
HAIN
Hain Celestial
1.20
-3.74
-75.71%
USNA
USANA Health
20.44
-11.13
-35.25%
LSF
Laird Superfood
2.78
-4.47
-61.66%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.