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FRMO Corporation (FRMO)
OTHER OTC:FRMO
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FRMO
(OTC:FRMO)
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Rating:61Neutral
Price Target:
$9.00
▲(17.80% Upside)
Action:ReiteratedDate:03/05/26
The score is anchored by strong balance-sheet quality and liquidity plus generally positive cash generation, reinforced by a constructive technical trend and a mostly positive earnings-call narrative. Offsetting these strengths are materially unstable earnings (including a weak TTM reversal), and weak valuation signals due to the negative P/E and lack of dividend yield data.
Positive Factors
Conservative balance sheet
Extremely low leverage and a debt-free position provide durable financial flexibility: the company can absorb investment mark-to-market swings, fund opportunistic stakes or required capex, and avoid solvency pressure. Strong liquidity and unused borrowing capacity support multi‑period resilience.
Positive operating/free cash flow
Consistent positive operating and free cash flow across recent periods indicates the business can generate internal funds to support portfolio activity and limited operating needs. This cash-generation ability reduces dependence on external financing and buffers the holding company through volatile valuation cycles.
Strategic equity stakes & merged-mining
Large minority stakes in exchange/datacenter businesses and a merged‑mining approach create durable optionality beyond spot mining revenue. Equity positions (MIAX, Synteq, ~45% Winland) can deliver upside via appreciation or consolidation, while Scrypt merged‑mining reduces halving sensitivity and supports gradual Bitcoin accumulation.
Negative Factors
Earnings volatility / TTM loss
The sharp TTM reversal into a large loss highlights earnings instability tied to mark‑to‑market investment swings and irregular realization events. This volatility undermines predictability for capital allocation, increases the risk of funding shortfalls in adverse markets, and complicates long‑term planning.
Limited recent mining capex
Minimal recent investment in mining hardware constrains sustainable hash‑rate growth and may force large, lump‑sum capex ahead of halving cycles. That timing risk can compel asset sales or use of cash reserves to fund upgrades, reducing optionality and increasing the chance of short‑term dilution or realized losses.
Reporting, tax and dilution uncertainty
A tax‑related filing delay plus variable diluted share calculations introduce persistent governance and reporting risks. Unresolved tax exposure could produce cash outflows or contingencies, while option‑driven dilution adds uncertainty to per‑share metrics and complicates investor assessment of long‑term returns.
FRMO (FRMO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$371.90M
Dividend YieldN/A
Average Volume (3M)9.83K
Price to Earnings (P/E)―
Beta (1Y)0.56
Revenue Growth-6.81%
EPS Growth-23.44%
CountryUS
Employees5
SectorFinancial
Sector Strength70
IndustryAsset Management
Share Statistics
EPS (TTM)-0.30
Shares Outstanding44,022,780
10 Day Avg. Volume11,479
30 Day Avg. Volume9,827
Financial Highlights & Ratios
PEG Ratio0.07
Price to Book (P/B)1.06
Price to Sales (P/S)1.42
P/FCF Ratio48.60
Enterprise Value/Market Cap0.88
Enterprise Value/Revenue-2.83
Enterprise Value/Gross Profit-1.65
Enterprise Value/Ebitda-1.05
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
FRMO Business Overview & Revenue Model
Company DescriptionFRMO 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 MoneyFRMO 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 Earnings Call Summary
Earnings Call Date:Jan 08, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Apr 09, 2026
Earnings Call Sentiment Positive
Overall the call conveyed a predominantly positive tone driven by a stronger balance sheet (debt-free, high liquidity), strategic repositioning into exchange and supporting-crypto businesses (Synteq, MIAX), an efficient merged-mining approach that supports Bitcoin accumulation, and constructive industry observations (stablecoin growth, tokenization benefits). Notable risks discussed include the near-term disruption and equipment-replacement pressures associated with the multi-year halving cycle, a recent tax-related filing delay, and limited recent mining capex which could require future spending. On balance, the positives (liquidity, strategic stakes, mining efficiency, successful exchange IPO) outweigh the lowlights (filing delay, halving risk, capex timing and reporting nuances).Q2-2026 Updates
Positive Updates
Company Now Debt-Free
Sold building previously housing HashMaster and used proceeds (partial) to repay mortgage to zero, resulting in no corporate debt and the most liquid balance sheet in company history with significant unused borrowing capacity.
Strategic Equity Position in Synteq and Exchange Investments
Took remaining proceeds in Synteq stock, establishing a minority stake in a company supporting cryptocurrency and emerging data center industries. MIAX IPO was described as extremely successful, producing a marked-up valuation; FRMO holds approximately 935,202 restricted shares and 11,441 public shares of MIAX (~946k total reported in the table).
Mining Strategy and Winland Ownership
Shifted mining operations to be conducted largely through publicly traded Winland; FRMO currently owns ~45% of Winland and will change financial statement presentation if/when it crosses 50% (consolidation). Company has not purchased new mining rigs recently by design.
Mining Efficiency Observed in Reporting Period
During the roughly six-month reporting period, digital assets mined had a cost-basis/market value of ~$36,000 while digital mining equipment and related depreciation on the balance sheet were de minimis (~$31,000). The mined-asset value exceeded equipment book value by about $5,000 (~16%), highlighting favorable yield/longevity dynamics for recently mined assets.
Scrypt (Merged) Mining Approach
FRMO emphasizes Scrypt (merged) mining (Litecoin + Dogecoin) where Dogecoin revenue funds electricity and Bitcoin accumulation purchases, and Litecoin is retained. This approach is cited as reducing halving exposure and enabling gradual Bitcoin accumulation.
Macro Crypto & Market Opportunity Observations
Management highlighted large trading volumes as opportunity signals: 24‑hour Bitcoin volume ~$18.7 billion, Litecoin volume ~$10 billion (market cap cited ~$4.2 billion), Dogecoin volume ~$161 million. Stablecoin market approaching ~$0.5 trillion, seen as a catalyst for 24/7 trading and demand for instantaneous settlement solutions (possible use case for mined coins/exchanges).
Positive View on Tokenization for Exchanges
Management believes tokenization and on-chain movement of financial assets are net positives for exchanges (including FRMO-held exchanges) because intermediated, rules-based venues and aggregate market data remain necessary to preserve market integrity and prevent abuses.
Selective Investment Interest in Emerging Exchanges
Management noted Abaxx (Singapore-based commodities exchange) is scaling volumes from a low base with recent strong growth; market capitalization referenced ~ $1.4 billion and growth rate described as 'not far from 100%' off a small base, making it an interesting company to monitor.
Negative Updates
Delayed Filing and Meeting Due to Tax Dispute
Quarterly filing and meeting were delayed owing to a dispute over potential tax liability related to security sales, prompting an apology from management and scheduling of a follow-up meeting in ~6 weeks; this creates short-term reporting uncertainty.
Halving-Related Market Disruption Risk
Management emphasized the upcoming Bitcoin halving cycle (next halving noted ~April 18, 2028, ~2 years away) and the typical disruptive market dynamics that occur roughly two years before a halving, including widespread need to replace equipment and potential selling pressure on accumulated Bitcoin to fund capex.
No Recent Capital Expenditure on Mining Rigs
Company has not purchased new mining rigs recently (digital mining assets and depreciation are minimal, ~ $31k), which may limit near-term hash-rate growth or require significant future capex spending when preparing for halving-driven equipment turnover.
Reporting/Dilution Complexity
Diluted share counts differ between quarterly and year‑to‑date condensed consolidated statements due to director option grants that may be in the money or out of the money depending on stock price, creating variability in fully diluted share calculations and potential dilution concerns for shareholders.
Uncertainties Around Some Investments and Valuations
Management noted limited exposure to certain investments (e.g., Abaxx not purchased by FRMO) and flagged that some valuations (Abaxx cited at ~$1.4 billion market cap vs. low absolute volumes) may reflect rapid percentage growth from a small base, introducing valuation risk. Also, potential warrant inclusion in MIAX holdings was uncertain in the reported table.
Company Guidance
The call guided investors to expect a follow-up meeting in about six weeks to review February results and a likely different tax number as market values change, and emphasized preparing for the next Bitcoin halving (around April 18, 2028, roughly two years away); FRMO is debt-free (mortgage repaid), says it has its strongest liquidity and unused borrowing capacity, owns roughly 45% of Winland (will consolidate if >50%), and Murray Stahl personally holds just over 8 million shares; mining metrics noted digital mining assets/depreciation of about $31,000 and a ~$36,000 increase in digital‑asset cost basis in the six‑month period (assets mined), a three‑year depreciation policy, and a shift toward Scrypt (merged) mining; market/context numbers cited included Bitcoin 24‑hour volume ~$18.7B, Bitcoin market cap ~$1.3–1.4T with ~20M of a 21M cap mined, Litecoin 24‑hour volume ~ $10B and market cap ~$4.2B (≈3x Ethereum volume), Dogecoin 24‑hour volume ~$161M, the stablecoin market approaching ~$0.5T, Abaxx’s market value cited near ~$1.4B, and MIAX holdings reported ~935,202 restricted + ~11,441 public (~946k total), with diluted‑share variations driven by outstanding director options.FRMO Financial Statement Overview
Summary
Financial profile is mixed: a very strong, low-leverage balance sheet (Balance Sheet Score 86) and generally positive operating/free cash flow (Cash Flow Score 72) are partially offset by highly volatile results and a sharp TTM swing into losses and revenue deterioration (Income Statement Score 38).Income Statement
Results are highly volatile. After strong profitability in annual periods (2024–2025 with solid net income and high margins), the latest TTM (Trailing-Twelve-Months) swings to a large loss with negative revenue and sharply negative operating profit, alongside a steep revenue decline. The key strength is that the business has demonstrated the ability to generate sizable profits in recent annual reports, but the current TTM reversal raises material concerns about earnings stability and the durability of the revenue base.38
Negative
Balance Sheet
The balance sheet looks conservatively financed with extremely low leverage (debt-to-equity remains near zero across periods) and a substantial equity base relative to assets. That said, profitability on equity is inconsistent—positive in recent annual reports but negative in the latest TTM (Trailing-Twelve-Months)—which signals that while solvency risk appears low, returns can fluctuate meaningfully with business conditions and mark-to-market/investment outcomes.86
Very Positive
Cash Flow
Cash generation is a relative bright spot: operating cash flow and free cash flow are positive in the latest TTM (Trailing-Twelve-Months) and most annual periods, and free cash flow has generally tracked net income closely when profits were positive. The main weakness is uneven cash conversion over time (including a year with negative free cash flow) and the mismatch between positive TTM cash flow versus negative TTM earnings, which suggests results may be influenced by timing effects and/or non-cash income statement swings.72
Positive
| Breakdown | TTM | May 2024 | May 2023 | May 2022 | May 2021 | May 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | -115.89M | 263.36M | 138.43M | 7.27M | 4.82M | 3.00M |
| Gross Profit | -198.14M | 263.36M | 138.43M | 7.27M | 13.87M | 150.57M |
| EBITDA | -311.09M | 262.01M | 137.12M | -36.26M | 12.14M | 142.92M |
| Net Income | -92.73M | 107.55M | 72.56M | -34.98M | 12.49M | 149.22M |
Balance Sheet | ||||||
| Total Assets | 611.74M | 713.40M | 439.16M | 303.49M | 338.28M | 328.79M |
| Cash, Cash Equivalents and Short-Term Investments | 45.15M | 452.42M | 260.87M | 197.81M | 220.68M | 206.70M |
| Total Debt | 635.41K | 647.79K | 668.62K | 699.84K | 729.86K | 758.74K |
| Total Liabilities | 81.78M | 62.21M | 35.88M | 19.38M | 23.96M | 29.87M |
| Stockholders Equity | 293.27M | 352.98M | 242.14M | 169.28M | 181.41M | 177.90M |
Cash Flow | ||||||
| Free Cash Flow | 5.37M | 7.71M | 3.59M | 5.20M | 841.32K | -198.58K |
| Operating Cash Flow | 5.40M | 7.73M | 3.67M | 5.24M | 1.39M | 31.15K |
| Investing Cash Flow | -1.34M | -1.95M | -2.23M | 346.62K | -2.79M | -3.14M |
| Financing Cash Flow | -444.76K | -1.11M | -331.22K | -800.12K | -282.98K | -360.63K |
FRMO Technical Analysis
Positive
7.64
Price Trends
7.64
Positive
7.76
Positive
8.25
Positive
Market Momentum
0.27
Negative
63.50
Neutral
67.25
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 below the 20-day moving average (MA) of 8.03, above the 50-day MA of 7.64, and below the 200-day MA of 8.25, indicating a bullish trend. The MACD of 0.27 indicates Negative momentum. The RSI at 63.50 is Neutral, neither overbought nor oversold. The STOCH value of 67.25 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FRMO.
FRMO Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $468.35M | 9.47 | 27.96% | 3.38% | 7.47% | -2.12% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
61 Neutral | $371.90M | -6.41 | -27.11% | ― | -6.81% | -23.44% | |
59 Neutral | $402.16M | 19.71 | 7.50% | 9.31% | 41.12% | -40.68% | |
59 Neutral | $303.63M | 10.64 | 5.42% | 16.61% | -3.09% | 200.66% | |
55 Neutral | $252.13M | 17.24 | 0.03% | 12.83% | 90.34% | -44.25% | |
53 Neutral | $337.82M | -24.53 | -3.58% | 15.77% | -11.01% | -65.56% |
* Financial Sector Average
FRMO
FRMO
8.45
-0.05
-0.61%
DHIL
Diamond Hill Investment Group
173.12
36.06
26.31%
GLAD
Gladstone Capital
17.80
-7.16
-28.69%
PNNT
Pennantpark Investment
4.65
-1.37
-22.72%
SCM
Stellus Capital
8.71
-3.90
-30.92%
CION
CION Investment Corp
6.69
-2.50
-27.18%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.