Digimarc (DMRC) AI Stock Analysis

• Market Cap: $289.01M
• Dividend Yield: N/A
• Average Volume (3M): 188.90K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.56
• Revenue Growth: 2.44%
• EPS Growth: 9.27%
• Country: US
• Employees: 215
• Sector: Technology
• Sector Strength: 84
• Industry: Information Technology Services
• EPS (TTM): -0.55
• Shares Outstanding: 21,552,002
• 10 Day Avg. Volume: 193,397
• 30 Day Avg. Volume: 188,903
• PEG Ratio: 2.61
• Price to Book (P/B): 5.77
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -11.97
• Enterprise Value/Market Cap: 0.99
• Enterprise Value/Revenue: 1.85
• Enterprise Value/Gross Profit: 11.82
• Enterprise Value/Ebitda: -2.05
• 1Y Price Target: $22.50
• Price Target Upside: 67.91% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 43 Neutral
• Price Target: $13.00 ▼(-2.99%Downside)

Digimarc's overall stock score reflects significant financial challenges and valuation concerns, despite positive corporate developments and a strategic pivot towards growth areas. The weak financials are the most impactful factor, while the technical analysis and valuation also weigh negatively, offset slightly by optimistic earnings call highlights and a positive corporate event.

Positive Factors

ARR Growth

Digimarc's adjusted ARR growth of 11% exceeded their internal plan, excluding the impact of lost Walmart revenue.

Cost Management

The company announced a 25% reduction in run-rate operating expenses, aligning with their cost-cutting strategy.

Negative Factors

Revenue Estimates

Several discrete items have led to lower FY25 revenue estimates for Digimarc.

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 makes money primarily through the licensing of its patented digital watermarking technology and related software solutions. The company generates revenue by selling its Digimarc Barcode and associated services to retailers, consumer goods manufacturers, and packaging suppliers, who utilize the technology to improve inventory management and enhance consumer interaction. Additionally, Digimarc earns income from partnerships and collaborations with companies in the retail and packaging industries, providing them with integrated solutions for product authentication and supply chain efficiencies. The company may also have consulting and support service revenue streams, aiding clients in implementing and optimizing their digital identification systems.

Digimarc Financial Statement Overview

Summary

Digimarc's financial performance is weak with persistent negative net income and negative cash flows, despite modest revenue growth. The company maintains low leverage, but the overall financial trajectory suggests a need for strategic restructuring.

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
37.85M	38.42M	34.85M	30.20M	26.52M	23.99M
	Gross Profit
24.11M	24.24M	18.53M	15.32M	17.74M	16.06M
	EBIT
-42.25M	-41.31M	-48.21M	-61.81M	-39.87M	-32.81M
	EBITDA
-34.67M	-33.16M	-39.83M	-52.31M	-39.87M	-30.04M
	Net Income Common Stockholders
-40.40M	-39.01M	-45.96M	-59.80M	-34.76M	-32.54M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
36.82M	28.73M	27.18M	52.54M	33.33M	77.73M
	Total Assets
57.39M	75.77M	80.55M	113.78M	64.88M	97.03M
	Total Debt
2.49M	5.21M	5.99M	5.98M	1.03M	6.84M
	Net Debt
-8.72M	-7.15M	-15.46M	-27.62M	-12.76M	-12.86M
	Total Liabilities
7.94M	14.41M	18.63M	16.19M	9.50M	13.19M
	Stockholders Equity
49.45M	61.36M	61.93M	97.59M	55.38M	83.84M
Cash Flow		Free Cash Flow
-24.12M	-26.78M	-22.73M	-45.88M	-27.69M	-21.57M
	Operating Cash Flow
-23.64M	-26.57M	-22.00M	-44.41M	-26.12M	-20.35M
	Investing Cash Flow
-694.00K	-11.28M	12.56M	3.76M	25.98M	-33.86M
	Financing Cash Flow
-3.22M	28.77M	-2.76M	60.50M	-5.77M	62.69M

Digimarc Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 13.40
• 50DMA: Positive
• 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 13.4 is above the 20-day moving average (MA) of 13.26, above the 50-day MA of 12.78, and below the 200-day MA of 25.99, indicating a neutral trend. The MACD of 0.08 indicates Negative momentum. The RSI at 50.88 is Neutral, neither overbought nor oversold. The STOCH value of 50.74 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
CNDT	65 Neutral	$430.47M	1.99	30.92%	―	-14.38%	―
Sector *	62 Neutral	$11.80B	10.31	-7.45%	2.91%	7.43%	-7.78%
CSPI	57 Neutral	$131.33M	40,175.00	-3.16%	0.90%	-11.53%	-128.96%
UIS	56 Neutral	$325.49M	―	192.24%	―	-1.72%	82.15%
WYY	48 Neutral	$34.33M	―	-14.76%	―	24.03%	49.96%
TLS	47 Neutral	$202.08M	―	-38.32%	―	-21.83%	-67.07%
DMRC	43 Neutral	$289.01M	―	-60.08%	―	2.44%	9.27%

Digimarc Corporate Events

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.

The most recent analyst rating on (DMRC) stock is a Hold with a $15.00 price target. To see the full list of analyst forecasts on Digimarc stock, see the DMRC Stock Forecast page.

Digimarc Faces Shareholder Communications in April 2025

In April 2025, Digimarc Corporation, a company engaged in digital watermarking and related technologies, faced shareholder communications from Ocho Investments, which were met with responses from other shareholders. The responses from Lagoda Investment Management, Kimelman & Baird LLC, and Silverberg Bernstein Capital Management expressed support for CEO Riley McCormack and the company’s strategic direction, highlighting confidence in his leadership despite recent challenges.