Paragon (PGN) AI Stock Analysis

• Market Cap: €8.78M
• Dividend Yield: N/A
• Average Volume (3M): 3.57K
• Price to Earnings (P/E): ―
• Beta (1Y): -0.02
• Revenue Growth: -22.60%
• EPS Growth: 40.38%
• Country: DE
• Employees: 685
• Sector: Services
• Sector Strength: N/A
• Industry: Auto - Parts
• EPS (TTM): -0.08
• Shares Outstanding: 4,526,266
• 10 Day Avg. Volume: 5,508
• 30 Day Avg. Volume: 3,574
• PEG Ratio: -0.02
• Price to Book (P/B): -0.88
• Price to Sales (P/S): 0.06
• P/FCF Ratio: 1.69
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 43 Neutral
• Price Target: €1.50 ▼(-41.63% Downside)

The score is held down primarily by weak financial performance—negative profitability, declining revenue, deteriorating free cash flow, and especially balance-sheet risk from negative equity and high leverage. Technicals provide some support due to positive momentum and price strength versus moving averages, but overbought indicators increase near-term risk. Valuation is also a constraint given the negative P/E and lack of dividend data.

Positive Factors

High gross margin

A 45.79% gross margin signals durable product or service-level pricing power and operational efficiency. Over the medium term this margin buffer helps absorb SG&A and R&D spend, supporting the firm's ability to invest in product development and maintain competitive offerings.

Solid EBITDA profitability

A mid-teens EBITDA margin shows the core business can generate operating cash before non-cash and financing items. This level of underlying profitability supports reinvestment in growth, service delivery, and strategic initiatives, improving resilience versus peers with weaker margins.

Diversified revenue and cloud partnerships

A multi-pronged revenue mix (subscriptions, licensing, services) plus partnerships with major cloud providers positions the company to capture digital transformation demand across industries. Structural diversification reduces single-client risk and supports recurring revenue growth potential.

Negative Factors

Balance-sheet leverage and negative equity

Negative equity and inverted debt-to-equity indicate high leverage and solvency risk that constrain financing options. Over months this elevates refinancing, covenant, and liquidity vulnerability, limiting strategic flexibility and increasing cost or scarcity of capital for investments.

Deteriorating cash generation

A steep FCF decline and low operating cash conversion mean reported earnings poorly translate to cash. This reduces capacity to fund capex, pay down debt, or sustain R&D without external funding, creating structural pressure on long-term investment and balance-sheet repair.

Revenue decline and negative net margin

Contraction in revenue combined with a negative net margin signals demand or competitive challenges and insufficient cost leverage. Persisting declines impair scale economics, hinder reinvestment capacity, and pose sustained profitability risk unless growth or margin recovery initiatives succeed.

Paragon Business Overview & Revenue Model

Company Description

Paragon (PGN) is a multifaceted company operating primarily in the technology and digital services sectors. With a focus on delivering innovative solutions, PGN specializes in software development, cloud computing, and data analytics services. The company caters to various industries, including finance, healthcare, and retail, providing tailored products designed to enhance efficiency and drive growth for its clients.

How the Company Makes Money

Paragon generates revenue through a combination of service fees, subscription models, and project-based contracts. Key revenue streams include software licensing fees from proprietary applications, ongoing support and maintenance contracts, and consulting services aimed at helping businesses integrate technology solutions. Additionally, PGN has established strategic partnerships with major cloud service providers, allowing it to offer bundled services that enhance its value proposition and drive additional sales. The company also benefits from a growing demand for digital transformation services, which has increased its client base and revenue potential.

Paragon Financial Statement Overview

Summary

Financial health is weak: revenue declined (-3.4% TTM) and net margin is negative (-4.63%). The balance sheet is the biggest risk with negative equity and very high leverage (debt-to-equity -6.87). Cash generation is also deteriorating (free cash flow growth -44.28% TTM) with low cash conversion (operating cash flow to net income 0.15).

Income Statement

Paragon's income statement reveals challenges in maintaining revenue growth, with a negative growth rate of -3.4% in the TTM period. The company struggles with profitability, as indicated by a negative net profit margin of -4.63%. However, the gross profit margin remains relatively healthy at 45.79%, suggesting some operational efficiency. The EBIT and EBITDA margins are modest at 1.44% and 14.75%, respectively, indicating limited profitability from core operations.

Balance Sheet

The balance sheet presents significant concerns, primarily due to a negative stockholders' equity, resulting in a high debt-to-equity ratio of -6.87. This indicates financial instability and potential risk in leveraging. The return on equity is positive at 62.77%, but this is skewed due to the negative equity. The equity ratio is not favorable, reflecting a weak financial structure.

Cash Flow

Cash flow analysis shows a decline in free cash flow growth by -44.28% in the TTM period, indicating cash generation issues. The operating cash flow to net income ratio is 0.15, suggesting limited cash flow relative to net income. The free cash flow to net income ratio is 0.23, showing some ability to convert income into cash, albeit at a low level.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	118.33M	139.03M	173.71M	164.96M	151.24M	150.49M
Gross Profit	54.18M	71.76M	84.57M	75.84M	86.04M	67.48M
EBITDA	17.45M	17.82M	17.62M	9.91M	12.65M	6.37M
Net Income	-5.48M	-6.11M	-3.81M	-8.68M	-5.50M	-44.67M
Balance Sheet
Total Assets	98.35M	98.32M	108.52M	172.54M	159.67M	200.50M
Cash, Cash Equivalents and Short-Term Investments	7.28M	5.38M	3.21M	18.11M	1.46M	5.66M
Total Debt	66.91M	69.35M	72.50M	120.13M	115.88M	135.62M
Total Liabilities	106.61M	108.27M	112.60M	171.88M	156.37M	187.26M
Stockholders Equity	-9.73M	-9.95M	-4.08M	662.00K	3.30M	7.44M
Cash Flow
Free Cash Flow	2.24M	5.20M	-13.76M	8.26M	-2.73M	5.94M
Operating Cash Flow	9.70M	15.96M	-6.16M	15.98M	14.81M	18.75M
Investing Cash Flow	-8.86M	-10.43M	38.14M	-3.88M	1.68M	-12.62M
Financing Cash Flow	-1.46M	-4.35M	-46.88M	4.54M	-20.53M	-9.93M

Paragon Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2.57
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:PGN, the sentiment is Negative. The current price of 2.57 is above the 20-day moving average (MA) of 1.92, above the 50-day MA of 1.89, and above the 200-day MA of 2.24, indicating a bearish trend. The MACD of <0.01 indicates Positive momentum. The RSI at 49.44 is Neutral, neither overbought nor oversold. The STOCH value of 11.11 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DE:PGN.

Paragon Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PWO	72 Outperform	€82.50M	7.15	7.17%	5.91%	-4.01%	-10.36%
Sector *	55 Neutral	$13.29B	17.42	10.03%	0.93%	7.13%	-12.93%
IS7	48 Neutral	€9.54M	-2.35	-22.94%	―	-11.97%	-76.11%
SF3	45 Neutral	€20.12M	-33.33	-1.36%	1.58%	4.55%	45.49%
PGN	43 Neutral	€8.78M	-1.56	―	―	-22.60%	40.38%
MSAG	43 Neutral	€39.17M	-5.21	-11.55%	―	-40.37%	-406.54%
HGEA	43 Neutral	€16.22M	-0.76	-35.15%	―	-10.38%	-19.93%