Digimarc (DMRC) AI Stock Analysis

• Market Cap: $295.26M
• Dividend Yield: N/A
• Average Volume (3M): 152.36K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.62
• Revenue Growth: 2.44%
• EPS Growth: 9.27%
• Country: US
• Employees: 215
• Sector: Technology
• Sector Strength: 87
• Industry: Information Technology Services
• EPS (TTM): -0.55
• Shares Outstanding: 21,552,002
• 10 Day Avg. Volume: 130,108
• 30 Day Avg. Volume: 152,361
• PEG Ratio: -0.12
• Price to Book (P/B): 3.63
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -7.71
• Enterprise Value/Market Cap: 1.11
• Enterprise Value/Revenue: 2.12
• Enterprise Value/Gross Profit: 13.53
• Enterprise Value/Ebitda: -2.35
• 1Y Price Target: $22.50
• Price Target Upside: 64.23% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 44 Neutral
• Price Target: $13.00 ▼(-5.11%Downside)

Digimarc's overall stock score is primarily driven by its poor financial performance, characterized by persistent losses and cash flow issues. While there are strategic efforts and leadership changes aimed at improving the situation, the technical analysis and valuation remain weak. The earnings call provides some optimism, but significant challenges remain.

Positive Factors

Cost Management

The company announced a 25% reduction in run-rate operating expenses.

Earnings

Digimarc reported a solid Q1/25 making progress against both their ARR growth and cost objectives for the year.

Growth Strategy

The company is focusing on near-term ARR growth drivers including gift cards, physical anti-counterfeit, and digital.

Negative Factors

Major Deals

The major deal related news is Walmart remains under negotiation and is now fully out of estimates.

Revenue

Digimarc reported Q4 results that were modestly below expectations.

Revenue Estimates

Several discrete items lead to lower FY25 revenue estimates.

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 faces significant financial challenges with persistent losses and negative cash flows. The income statement reveals inefficiencies with declining margins and inability to turn a profit. The balance sheet reflects a weakened position despite low leverage, and negative cash flows indicate liquidity issues.

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
EBITDA	-34.67M	-33.16M	-39.83M	-52.31M	-39.87M	-30.04M
Net Income	-40.40M	-39.01M	-45.96M	-59.80M	-34.76M	-32.54M
Balance Sheet
Total Assets	66.52M	75.77M	80.55M	113.78M	64.88M	97.03M
Cash, Cash Equivalents and Short-Term Investments	21.57M	28.73M	27.18M	52.54M	33.33M	77.73M
Total Debt	5.00M	5.21M	5.99M	5.98M	1.03M	6.84M
Total Liabilities	16.50M	14.41M	18.63M	16.19M	9.50M	13.19M
Stockholders Equity	50.02M	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: Positive
• Last Price: 13.70
• 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 Positive. The current price of 13.7 is above the 20-day moving average (MA) of 13.23, above the 50-day MA of 13.14, and below the 200-day MA of 24.82, indicating a neutral trend. The MACD of 0.02 indicates Negative momentum. The RSI at 55.03 is Neutral, neither overbought nor oversold. The STOCH value of 74.31 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DMRC.

Digimarc Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CNDT	64 Neutral	$453.12M	2.05	30.92%	―	-14.38%	―
Sector *	63 Neutral	$34.04B	6.14	-11.52%	1.82%	5.53%	-18.79%
CSPI	56 Neutral	$126.64M	40,175.00	-3.16%	0.93%	-11.53%	-128.96%
UIS	53 Neutral	$321.93M	―	192.24%	―	-1.72%	82.15%
TLS	52 Neutral	$238.83M	―	-38.32%	―	-21.83%	-67.07%
WYY	49 Neutral	$33.35M	―	-14.76%	―	24.03%	49.96%
DMRC	44 Neutral	$295.26M	―	-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.