FRMO (FRMO) AI Stock Analysis

• Market Cap: $313.44M
• Dividend Yield: N/A
• Average Volume (3M): 9.83K
• Price to Earnings (P/E): 5.9
• Beta (1Y): 0.60
• Revenue Growth: -6.81%
• EPS Growth: -23.44%
• Country: US
• Employees: 5
• Sector: Financial
• Sector Strength: 70
• Industry: Asset Management
• EPS (TTM): N/A
• Shares Outstanding: 44,022,780
• 10 Day Avg. Volume: 11,479
• 30 Day Avg. Volume: 9,827
• PEG Ratio: 0.07
• Price to Book (P/B): 1.06
• Price to Sales (P/S): 1.42
• P/FCF Ratio: 48.60
• Enterprise Value/Market Cap: 0.91
• Enterprise Value/Revenue: 1.21
• Enterprise Value/Gross Profit: 1.85
• Enterprise Value/Ebitda: 3.58
• 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: 68 Neutral
• Price Target: $7.50 ▼(-1.83% Downside)
• Action: Downgraded Date: 02/07/26
• Date: Action: Downgraded 02/07/26

The score is driven mainly by strong financial fundamentals (high margins and minimal leverage) and supportive valuation (low P/E). These positives are tempered by weak technicals, with the stock trading below major moving averages and negative momentum indicators.

Positive Factors

High profitability and margins

FRMO reports exceptionally high margins reflecting minimal operating cost structure typical for a holding company. Durable margin strength supports internal capital accumulation, funds opportunistic deployments, and reduces reliance on external financing, strengthening medium-term resilience.

Very low leverage and strong balance sheet

An almost negligible debt load and rising equity provide strong financial flexibility. This durable capital structure lowers solvency risk, preserves optionality to acquire or support portfolio positions, and allows the firm to absorb investment volatility without forced capital raises.

Improving cash generation

A near-doubling of free cash flow and a high operating cash flow to net income ratio indicate improving cash quality. Sustained FCF growth enhances the company's ability to reinvest, fund opportunistic purchases or returns, and provides a buffer versus lumpy investment realizations.

Negative Factors

Significant revenue decline

A steep revenue drop likely reflects fewer realized gains or lower income from holdings. For an investment holding company, prolonged declines reduce distributable cash and reinvestment capacity, which can impair growth initiatives and limit value-creation opportunities over the medium term.

Volatile free cash flow history

Material variability in free cash flow complicates budgeting and consistent capital deployment. Because FRMO depends on investment exits and receipts, FCF volatility raises execution risk for acquisitions, support of portfolio companies, or steady shareholder distributions over several quarters.

Concentrated investment-based revenue model

The business relies on capital-market outcomes and discrete realization events rather than recurring operating revenues. This structural concentration increases earnings cyclicality and reduces predictability of growth and cash generation, challenging multi-quarter planning and steady organic expansion.

FRMO Business Overview & Revenue Model

Company Description

FRMO Corporation, through its 4.95% interest in Horizon Kinetics, LLC, operates as an investment advisory and independent research company. It provides in-depth analysis of information-poor, under-researched companies, and strategies to identify the complex situations primarily to institutional investors. The company was incorporated in 1993 and is based in White Plains, New York.

How the Company Makes Money

FRMO generates revenue through several key streams, primarily from management fees and performance fees associated with its investments in various funds and securities. The company earns management fees from the assets it manages on behalf of its investors, which are typically calculated as a percentage of the assets under management (AUM). Additionally, FRMO may receive performance fees based on the profits generated by the funds it manages, which incentivizes strong investment performance. The company also benefits from strategic partnerships with other investment firms, which may provide additional revenue opportunities through co-investment arrangements or shared management fees. Furthermore, FRMO's investment in proprietary trading and its own portfolio of investments contribute to its overall earnings, allowing it to capitalize on market opportunities and fluctuations.

FRMO Financial Statement Overview

Summary

Strong profitability (100% gross margin; 40.84% net margin) and an exceptionally low leverage profile (debt-to-equity 0.0018) support a solid financial score. The main offset is the sharp revenue decline (-36.34%) and some historical free cash flow volatility despite the latest free cash flow growth (+97.87%).

Income Statement

FRMO's income statement shows strong profitability with a high gross profit margin of 100% and a net profit margin of 40.84% for the latest year. However, the company experienced a significant revenue decline of 36.34% compared to the previous year. Despite this, the EBIT and EBITDA margins remain exceptionally high, indicating efficient cost management.

Balance Sheet

The balance sheet is robust with a very low debt-to-equity ratio of 0.0018, indicating minimal leverage. The equity ratio is strong, reflecting a solid capital structure. The company has shown a significant increase in stockholders' equity over the years, enhancing its financial stability.

Cash Flow

Cash flow analysis reveals a substantial growth in free cash flow by 97.87% in the latest year, indicating improved cash generation. The operating cash flow to net income ratio is healthy at 4.91, suggesting efficient conversion of income into cash. However, historical fluctuations in free cash flow growth highlight potential volatility.

Breakdown	TTM	May 2024	May 2023	May 2022	May 2021	May 2020
Income Statement
Total Revenue	236.50M	263.36M	138.43M	7.27M	4.82M	3.00M
Gross Profit	154.26M	263.36M	138.43M	7.27M	13.87M	150.57M
EBITDA	79.89M	262.01M	137.12M	-36.26M	12.14M	142.92M
Net Income	57.20M	107.55M	72.56M	-34.98M	12.49M	149.22M
Balance Sheet
Total Assets	649.10M	713.40M	439.16M	303.49M	338.28M	328.79M
Cash, Cash Equivalents and Short-Term Investments	408.19M	452.42M	260.87M	197.81M	220.68M	206.70M
Total Debt	641.66K	647.79K	668.62K	699.84K	729.86K	758.74K
Total Liabilities	58.73M	62.21M	35.88M	19.38M	23.96M	29.87M
Stockholders Equity	337.16M	352.98M	242.14M	169.28M	181.41M	177.90M
Cash Flow
Free Cash Flow	5.12M	7.71M	3.59M	5.20M	841.32K	-198.58K
Operating Cash Flow	5.15M	7.73M	3.67M	5.24M	1.39M	31.15K
Investing Cash Flow	-2.25M	-1.95M	-2.23M	346.62K	-2.79M	-3.14M
Financing Cash Flow	-348.97K	-1.11M	-331.22K	-800.12K	-282.98K	-360.63K

FRMO Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 7.64
• 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 FRMO, the sentiment is Positive. The current price of 7.64 is above the 20-day moving average (MA) of 7.34, above the 50-day MA of 7.40, and below the 200-day MA of 8.26, indicating a neutral trend. The MACD of -0.02 indicates Negative momentum. The RSI at 50.81 is Neutral, neither overbought nor oversold. The STOCH value of 55.27 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FRMO.

FRMO Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DHIL	76 Outperform	$461.98M	9.90	26.98%	3.38%	7.47%	-2.12%
FRMO	68 Neutral	$313.44M	5.91	18.64%	―	-6.81%	-23.44%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
CION	63 Neutral	$445.92M	17.06	3.22%	15.77%	-11.01%	-65.56%
SCM	60 Neutral	$325.95M	10.34	8.20%	12.83%	90.34%	-44.25%
GLAD	59 Neutral	$420.01M	12.33	7.40%	9.31%	41.12%	-40.68%
PNNT	59 Neutral	$336.27M	13.14	5.38%	16.61%	-3.09%	200.66%