Digerati Technologies (DTGI) AI Stock Analysis

• Market Cap: $2.62M
• Dividend Yield: N/A
• Average Volume (3M): 787.38K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.78
• Revenue Growth: -1.41%
• EPS Growth: 70.60%
• Country: US
• Employees: 78
• Sector: Communication Services
• Sector Strength: 97
• Industry: Telecommunications Services
• EPS (TTM): -0.06
• Shares Outstanding: 179,734,440
• 10 Day Avg. Volume: 367,688
• 30 Day Avg. Volume: 787,379
• PEG Ratio: >-0.01
• Price to Book (P/B): -0.08
• Price to Sales (P/S): 0.10
• P/FCF Ratio: -1.87
• Enterprise Value/Market Cap: 22.65
• Enterprise Value/Revenue: 1.99
• Enterprise Value/Gross Profit: 4.36
• Enterprise Value/Ebitda: 10.82
• 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: 38 Underperform
• Price Target: ―

Digerati Technologies faces substantial financial difficulties, with declining revenues, negative profitability, and high leverage posing significant risks. The technical analysis shows bearish momentum, and the valuation reflects the company's unprofitability. These factors combine to produce a low overall stock score, indicating high risk for investors.

Positive Factors

Business Model

A subscription-based model provides predictable and recurring revenue streams, supporting long-term financial stability and growth potential.

Strategic Acquisitions

Strategic acquisitions can enhance service offerings and expand the customer base, strengthening competitive positioning and market reach.

Partnerships

Collaborations with technology providers and resellers can amplify sales channels and market penetration, fostering long-term growth opportunities.

Negative Factors

Financial Instability

High leverage and negative equity indicate financial distress, limiting flexibility and increasing insolvency risk, impacting long-term viability.

Negative Cash Flow

Negative cash flow signals operational inefficiencies and reliance on external financing, challenging sustainable growth and financial health.

Declining Revenue

Declining revenue and negative profit margins highlight operational challenges, potentially eroding competitive position and market share over time.

Digerati Technologies Business Overview & Revenue Model

Company Description

Digerati Technologies, Inc., through its subsidiaries, provides Internet-based telephony products and services through its cloud application platform and session-based communication network in the United States. The company offers Internet broadband, fiber, mobile broadband, and cloud WAN solutions; cloud communication services, including fully hosted IP/PBX, mobile applications, Voice over Internet Protocol (VoIP) transport, SIP trunking, call center applications, auto attendant, voice and web conferencing, call recording, messaging, voicemail to email conversion, integrated mobility applications, and customized VoIP services; and remote network monitoring, data backup, and disaster recovery services, as well as enterprise-class data and connectivity solutions, such as cloud WAN (wide area network) or software-defined WAN, fiber, mobile broadband, and Ethernet over copper services. It primarily serves small to medium-sized enterprise customers and other resellers. The company was formerly known as ATSI Communications Inc. and changed its name to Digerati Technologies, Inc. in March 2011. Digerati Technologies, Inc. was founded in 1993 and is headquartered in San Antonio, Texas.

How the Company Makes Money

Digerati Technologies generates revenue through a subscription-based model, where businesses pay recurring fees for access to its cloud communication services. Key revenue streams include VoIP services, broadband internet, and unified communications as a service (UCaaS). The company also earns from the sale and installation of communication equipment and software licenses associated with its offerings. Digerati's growth is further supported by strategic acquisitions of complementary businesses that expand its customer base and enhance its service portfolio. Partnerships with technology providers and resellers also play a crucial role in extending its market reach and driving sales.

Digerati Technologies Financial Statement Overview

Summary

Digerati Technologies is facing significant financial challenges. The income statement shows declining revenue and persistent losses with a negative net profit margin of -33.9%. The balance sheet is stressed with negative stockholders' equity of -$43.89M and a high total debt of $64.12M, indicating financial instability. Cash flows are negative with a free cash flow of -$1.064M, reflecting cash management issues and dependency on external financing. Overall, the financial health is weak.

Income Statement

Digerati Technologies shows declining revenue in TTM compared to the previous year, with a drop from $29.96M to $29.86M. The company has a negative net profit margin of -33.9% in TTM, indicating substantial losses compared to revenue. The EBIT and EBITDA margins are also negative, showing operational inefficiencies. Despite a slight improvement in EBIT and EBITDA from the previous period, the overall income statement reflects weak financial health.

Balance Sheet

The balance sheet reveals significant financial instability, with a negative stockholders' equity of -$43.89M in TTM, indicating potential insolvency risks. The debt-to-equity ratio is not calculable due to negative equity, but the high total debt of $64.12M suggests a heavily leveraged position. The equity ratio is negative, further emphasizing the unsustainable capital structure. Overall, the balance sheet demonstrates financial distress and high leverage risks.

Cash Flow

Digerati Technologies reports negative free cash flow of -$1.064M in TTM, showing cash flow challenges. The operating cash flow to net income ratio is slightly positive, indicating some efficiency in converting earnings to cash, but overall cash flow remains negative. The financing activities contribute positively to cash flow, but the reliance on external financing may not be sustainable. The cash flow statement indicates cash management issues and dependency on financing.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	29.93M	29.96M	31.62M	24.15M	12.42M	6.28M
Gross Profit	13.63M	15.12M	20.34M	14.81M	7.28M	3.24M
EBITDA	5.49M	567.00K	5.90M	597.00K	-9.99M	-851.00K
Net Income	-4.46M	-12.64M	-8.29M	-8.01M	-16.68M	-3.42M
Balance Sheet
Total Assets	35.51M	36.56M	38.37M	41.69M	16.52M	4.35M
Cash, Cash Equivalents and Short-Term Investments	582.00K	489.00K	924.00K	1.51M	1.49M	685.00K
Total Debt	64.54M	61.01M	47.78M	42.13M	12.36M	2.75M
Total Liabilities	84.64M	81.34M	69.28M	67.50M	33.37M	6.96M
Stockholders Equity	-42.70M	-39.09M	-27.61M	-23.76M	-16.14M	-2.23M
Cash Flow
Free Cash Flow	1.43M	-1.68M	-3.66M	-2.23M	-1.12M	-31.00K
Operating Cash Flow	1.53M	-1.68M	-3.22M	-1.96M	-708.00K	54.00K
Investing Cash Flow	-106.00K	0.00	-436.00K	-12.88M	-10.80M	-212.00K
Financing Cash Flow	-1.59M	1.24M	3.07M	14.87M	12.31M	437.00K

Digerati Technologies Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CXDO	75 Outperform	$212.97M	49.18	7.87%	―	12.91%	222.63%
UCL	69 Neutral	$72.95M	9.31	29.12%	―	-2.61%	85.42%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
KORE	55 Neutral	$77.70M	-1.18	―	―	0.06%	55.55%
IQST	48 Neutral	$13.42M	-1.10	-79.86%	―	43.19%	-63.65%
DTGI	38 Underperform	$2.62M	-0.59	―	―	-1.41%	70.60%