Digimarc (DMRC) AI Stock Analysis

• Market Cap: $213.13M
• Dividend Yield: N/A
• Average Volume (3M): 256.57K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.78
• Revenue Growth: -8.07%
• EPS Growth: 7.66%
• Country: US
• Employees: 215
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): -0.38
• Shares Outstanding: 21,681,377
• 10 Day Avg. Volume: 182,509
• 30 Day Avg. Volume: 256,574
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.29
• Enterprise Value/Revenue: 7.75
• Enterprise Value/Gross Profit: 12.53
• Enterprise Value/Ebitda: -8.41
• 1Y Price Target: $16.17
• Price Target Upside: 64.50% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 44 Neutral
• Price Target: $8.50 ▼(-13.53% Downside)

Digimarc's overall stock score reflects significant financial and technical challenges. The company's declining revenues, negative profitability, and bearish technical indicators weigh heavily on the score. While strategic initiatives and executive changes offer some optimism, they are overshadowed by current financial weaknesses and valuation concerns.

Positive Factors

Strategic Partnerships

This partnership is expected to generate significant ARR starting next year, enhancing revenue stability and expanding market reach.

Executive Appointments

Bajaj's financial and strategic expertise is likely to enhance strategic direction and operational execution, supporting long-term growth.

Product Development

The launch of the gift card solution represents a new revenue stream and strengthens Digimarc's product portfolio, aiding market competitiveness.

Negative Factors

Revenue Decline

A significant revenue decline indicates challenges in maintaining sales momentum, impacting financial health and operational sustainability.

Contract Lapses

The expiration of major contracts reduces recurring revenue, posing risks to cash flow stability and financial predictability.

Cash Flow Challenges

Negative cash flow highlights inefficiencies in cash generation, limiting investment capacity and financial flexibility for growth initiatives.

Digimarc Business Overview & Revenue Model

Company Description

Digimarc Corporation provides automatic identification solutions to commercial and government customers in the United States and internationally. The company offers Digimarc watermarks, a data carrier that provides a digital identity to media objects; Digimarc Discover, a software for computing devices and network interfaces that recognize and decode indicia of the identity of media; and Digimarc Verify, a suite of software tools used to inspect and verify that the identification and discovery of media. Its solutions are used in various application solutions, such as product authentication of physical products; sorting of consumer-packaged goods in recycling streams; track and trace of products within the supply chain; quality control in manufacturing processes; inventory management and planogram compliance; retail point of sale transaction processing; piracy deterrence of digital media objects; content identification and media management; and enhanced services in support of mobile commerce. The company offers its solutions through its sales personnel and business partners. Digimarc Corporation was incorporated in 2008 and is based in Beaverton, Oregon.

How the Company Makes Money

Digimarc generates revenue through a subscription-based model and licensing fees associated with its digital watermarking technologies and services. The company partners with retailers, manufacturers, and brands to integrate its solutions into their operations, allowing them to enhance product visibility and consumer interaction. Key revenue streams include annual subscriptions for its software and services, one-time licensing fees for its technology, and revenue from collaborative projects with major corporations in the consumer goods and retail sectors. Additionally, partnerships with industry leaders help expand its market reach and create new opportunities for monetization.

Digimarc Financial Statement Overview

Summary

Digimarc faces significant financial challenges with persistent losses and negative cash flows, despite modest revenue growth. The company maintains low leverage, which is a positive aspect, but the overall trajectory suggests a need for strategic financial restructuring to improve profitability and cash generation capabilities.

Income Statement

Digimarc's income statement reveals significant challenges with persistent negative net income and declining EBIT and EBITDA margins, indicating operational inefficiency. Despite modest revenue growth over recent years, the inability to turn a profit and improve margins significantly impacts the overall financial health.

Balance Sheet

The balance sheet shows relatively low total debt levels compared to equity, suggesting conservative leverage. However, the declining equity and total assets reflect a weakened financial position. The company's equity ratio remains strong, but continuous losses could erode this stability over time.

Cash Flow

Cash flow analysis highlights negative operating cash flow and free cash flow, indicating liquidity issues. While capital expenditures are low, the inability to generate positive cash flow from operations is a major concern and could hinder future investments and growth prospects.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	35.48M	38.42M	34.85M	30.20M	26.52M	23.99M
Gross Profit	21.96M	24.24M	18.53M	15.32M	17.74M	16.06M
EBITDA	-32.70M	-33.16M	-39.83M	-52.31M	-39.87M	-30.04M
Net Income	-39.35M	-39.01M	-45.96M	-59.80M	-34.76M	-32.54M
Balance Sheet
Total Assets	60.75M	75.77M	80.55M	113.78M	64.88M	97.03M
Cash, Cash Equivalents and Short-Term Investments	16.09M	28.73M	27.18M	52.54M	33.33M	77.73M
Total Debt	5.62M	5.21M	5.99M	5.98M	1.03M	6.84M
Total Liabilities	14.26M	14.41M	18.63M	16.19M	9.50M	13.19M
Stockholders Equity	46.48M	61.36M	61.93M	97.59M	55.38M	83.84M
Cash Flow
Free Cash Flow	-22.07M	-26.78M	-22.73M	-45.88M	-27.69M	-21.57M
Operating Cash Flow	-21.49M	-26.57M	-22.00M	-44.41M	-26.12M	-20.35M
Investing Cash Flow	4.10M	-11.28M	12.56M	3.76M	25.98M	-33.86M
Financing Cash Flow	-3.17M	28.77M	-2.76M	60.50M	-5.77M	62.69M

Digimarc Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 9.83
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DMRC, the sentiment is Negative. The current price of 9.83 is above the 20-day moving average (MA) of 9.40, below the 50-day MA of 10.25, and below the 200-day MA of 18.86, indicating a neutral trend. The MACD of 0.07 indicates Negative momentum. The RSI at 50.39 is Neutral, neither overbought nor oversold. The STOCH value of 30.85 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DMRC.

Digimarc Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TLS	58 Neutral	502.38M	-9.03	-46.87%	―	-13.76%	-75.18%
UIS	55 Neutral	283.75M	-3.36	68.24%	―	-1.53%	78.84%
WYY	55 Neutral	48.88M	-22.45	-16.91%	―	16.25%	41.38%
CNDT	54 Neutral	448.65M	92.21	2.18%	―	-14.36%	-73.74%
CSPI	52 Neutral	121.98M	-70.36	-3.28%	0.97%	-0.37%	-161.02%
DMRC	44 Neutral	$213.13M	―	-63.65%	―	-8.07%	7.66%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Digimarc Corporate Events

Digimarc Appoints Rishi Bajaj to Board of Directors

On July 28, 2025, Digimarc Corporation entered into a Cooperation Agreement with Rishi Bajaj and Altai Capital Management, which includes the appointment of Bajaj to the Board of Directors. This agreement, effective until the 2026 annual meeting of shareholders, involves Bajaj and Altai voting in line with the Board’s recommendations on shareholder proposals, with some exceptions. Bajaj’s appointment is expected to bring financial and strategic expertise to Digimarc, enhancing its strategic direction as it continues to build the trust layer for the modern world.

Digimarc Appoints Carle Quinn as New COO

On June 1, 2025, Digimarc Corporation announced the appointment of Carle Quinn as Chief Operating Officer, effective immediately. Quinn, who previously served as Executive Vice President and Chief People Officer at Digimarc, brings extensive experience in strategy execution and operational excellence from her roles at Workato, Citrix, and SAP SuccessFactors. Her promotion reflects Digimarc’s commitment to accelerating business transformation and building long-term shareholder value. As COO, Quinn’s role will be crucial in driving scalable, sustainable growth by aligning strategy with execution and optimizing talent.