FRMO (FRMO) AI Stock Analysis

• Market Cap: $360.11M
• Dividend Yield: N/A
• Average Volume (3M): 9.83K
• Price to Earnings (P/E): ―
• 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): -0.30
• 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: 0.88
• Enterprise Value/Revenue: -2.75
• Enterprise Value/Gross Profit: -1.61
• Enterprise Value/Ebitda: -1.02
• 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: $8.50 ▲(11.26% Upside)
• 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

FRMO's reported 100% gross margin and 40.84% net margin indicate exceptionally profitable holdings and very low operating expense absorption. Sustained high margins support internal capital accumulation, funding of new investments, and resilience to portfolio write-downs over the medium term.

Minimal leverage / strong balance sheet

An extremely low debt-to-equity ratio (0.0018) and increased stockholders' equity provide strong financial flexibility. Minimal leverage reduces refinancing and interest-rate risk, allowing the company to deploy capital into opportunities or absorb portfolio volatility without pressure from creditors.

Improved cash generation

A near 98% rise in free cash flow and an operating-cash-flow to net-income ratio of 4.91x show improved ability to convert earnings into cash. Strong cash generation enhances the firm's capacity to fund investments, support operations, and weather periods without realizations.

Negative Factors

Significant revenue decline

A 36.34% year-over-year revenue drop signals material lower realized investment income or exits. For a holding company, such swings reduce predictable internal funding and can pressure reinvestment or distributions, making near-term operating resources and growth initiatives less certain.

Historical cash-flow volatility

Although recent free cash flow rose sharply, documented historical volatility shows uneven timing of realizations and receipts. This variability complicates forecasting, budgeting, and sustaining recurring commitments, increasing execution risk over the next several months.

Concentrated investment-holding model

The firm's reliance on investment returns rather than recurring operating revenue, and limited disclosure of stable revenue streams, means results depend heavily on timing and outcomes of portfolio transactions. A small team (5 employees) heightens concentration and operational execution risk.

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	-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

• Technical Analysis Sentiment: Positive
• Last Price: 7.64
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 7.47, above the 50-day MA of 7.44, and below the 200-day MA of 8.25, indicating a bullish trend. The MACD of 0.16 indicates Negative momentum. The RSI at 65.69 is Neutral, neither overbought nor oversold. The STOCH value of 92.86 is Negative, 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	71 Outperform	$464.51M	9.59	26.98%	3.38%	7.47%	-2.12%
FRMO	68 Neutral	$360.11M	-3.41	18.64%	―	-6.81%	-23.44%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
CION	63 Neutral	$415.43M	15.89	3.22%	15.77%	-11.01%	-65.56%
SCM	60 Neutral	$288.89M	9.16	8.20%	12.83%	90.34%	-44.25%
GLAD	59 Neutral	$418.42M	12.29	7.40%	9.31%	41.12%	-40.68%
PNNT	59 Neutral	$330.40M	12.91	5.38%	16.61%	-3.09%	200.66%