Ethernity Networks Ltd. (ENET) AI Stock Analysis

• Market Cap: £531.69K
• Dividend Yield: N/A
• Average Volume (3M): 79.74M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.13
• Revenue Growth: -54.10%
• EPS Growth: 85.53%
• Country: UK
• Employees: 13
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): N/A
• Shares Outstanding: 10,031,828,000
• 10 Day Avg. Volume: 98,420,075
• 30 Day Avg. Volume: 79,744,935
• PEG Ratio: <0.01
• Price to Book (P/B): 0.19
• Price to Sales (P/S): 0.38
• P/FCF Ratio: -0.16
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 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: 45 Neutral
• Price Target: 0.01p ▲(20.00% Upside)

Ethernity Networks Ltd. faces significant financial and valuation challenges, with declining revenues and persistent losses being the most critical issues. However, recent corporate events, such as strategic fundraising and securing a key patent, provide some positive outlook. The lack of technical analysis data adds uncertainty to the stock's performance. Overall, the stock is currently rated low due to financial instability, but corporate actions may offer some potential for future improvement.

Positive Factors

Strategic Partnerships

Partnerships with telecom operators and tech vendors enhance market reach and create joint project opportunities, supporting long-term revenue growth.

Recurring Revenue Model

Recurring revenue from maintenance and support contracts provides financial stability and predictability, aiding long-term business sustainability.

Product Portfolio

A strong product portfolio in network processors and appliances positions the company well in the growing telecommunications and cloud sectors.

Negative Factors

Declining Revenue

Significant revenue decline indicates challenges in market demand or competitive positioning, impacting long-term growth prospects.

High Leverage

High leverage can strain financial flexibility and increase risk, potentially limiting the company's ability to invest in growth opportunities.

Negative Cash Flow

Negative cash flow suggests liquidity issues, hindering the company's ability to sustain operations and invest in future growth.

Ethernity Networks Ltd. Business Overview & Revenue Model

Company Description

Ethernity Networks Ltd. provides technology solutions for telecom, mobile, security, and data center markets in Asia, Europe, Israel, and the United States. The company develops and delivers data processing technology and solutions for carrier Ethernet switching, including broadband access, mobile backhaul, carrier Ethernet demarcation, and data centers. It provides ENET flow processors for telco/cloud network; ACE-NIC40 SmartNIC, an open flow enabled software acceleration NIC; ACE-NIC40 SmartNIC, an open flow enabled software acceleration NIC; ACE-NIC50 SmartNIC, which offers 10/25G Ethernet connectivity and field-programmable gate array (FPGA) acceleration; ACE-NIC100 SmartNIC that provides flexible 10/25/40/100G Ethernet connectivity and programmable FPGA acceleration; ENET UEP-60, a programmable routing appliance for 5G, OpenRAN, and Network Edge; and ACE-NIC100 SmartNIC that provides flexible 10/25/40G/100G Ethernet connectivity and programmable FPGA acceleration. The company also offers ENET network appliances, such as ENET UEP-20 universal edge platform and ENET UEP-60 universal edge platform. In addition, it provides FPGA based networking and security solutions to telco/cloud equipment manufacturers and system integrators. The company was formerly known as Neracore Ltd. and changed its name to Ethernity Networks Ltd. in August 2004. Ethernity Networks Ltd. was incorporated in 2003 and is headquartered in Airport City, Israel.

How the Company Makes Money

Ethernity Networks generates revenue primarily through the sale of its hardware products, which include network processors and appliances, as well as software licenses for its networking solutions. Additionally, the company engages in providing customized solutions and services for clients in the telecommunications and cloud sectors, allowing for tailored implementations of its technology. Strategic partnerships with telecom operators and technology vendors further bolster its revenue streams, as these collaborations can lead to joint projects and expanded market reach. Furthermore, Ethernity Networks may also benefit from ongoing maintenance and support contracts with existing customers, contributing to a recurring revenue model.

Ethernity Networks Ltd. Financial Statement Overview

Summary

Ethernity Networks Ltd. is facing significant financial challenges characterized by declining revenues, persistent losses, and cash flow difficulties. The high leverage and diminishing equity position pose additional risks. Despite a reasonable gross profit margin, the company is struggling with overall profitability and liquidity concerns.

Income Statement

Ethernity Networks Ltd. has experienced declining revenue and persistent net losses over the years. The revenue has dropped significantly from $3.78 million in 2023 to $1.38 million in 2024, marking a negative revenue growth rate. Despite a decent gross profit margin, the negative net profit and EBIT margins indicate ongoing challenges in profitability.

Balance Sheet

The company's balance sheet reflects a high debt-to-equity ratio, indicating significant leverage. Stockholders' equity has decreased significantly over the period, from $5.92 million in 2023 to $2.74 million in 2024, suggesting declining financial stability. However, the equity ratio remains moderately supportive, with a notable portion of assets financed by equity.

Cash Flow

Ethernity Networks Ltd. faces challenges with negative operating and free cash flows, indicating cash outflows exceed inflows. The free cash flow has deteriorated further, highlighting liquidity issues. The operating cash flow to net income ratio is negative, suggesting inefficiencies in converting earnings to cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.26M	1.38M	3.78M	2.94M	2.64M	1.85M
Gross Profit	571.52K	1.27M	2.34M	1.60M	1.94M	1.58M
EBITDA	-3.24M	-4.11M	-4.67M	-6.33M	-7.89M	-4.95M
Net Income	-3.93M	-5.83M	-6.36M	-8.00M	-9.36M	-6.25M
Balance Sheet
Total Assets	3.58M	5.88M	9.68M	12.26M	19.41M	12.18M
Cash, Cash Equivalents and Short-Term Investments	40.69K	50.71K	1.99M	715.82K	7.06M	2.18M
Total Debt	176.31K	759.55K	1.20M	3.14M	3.66M	718.51K
Total Liabilities	3.20M	3.14M	3.76M	6.68M	6.46M	3.25M
Stockholders Equity	1.25M	2.74M	5.92M	5.58M	12.96M	8.93M
Cash Flow
Free Cash Flow	-1.85M	-3.26M	-1.64M	-7.83M	-5.58M	-3.78M
Operating Cash Flow	-1.75M	-3.16M	-1.50M	-7.57M	-5.39M	-3.59M
Investing Cash Flow	-102.27K	-101.28K	-148.11K	-258.84K	-222.81K	2.37M
Financing Cash Flow	1.30M	1.33M	2.92M	1.87M	10.52M	2.44M

Ethernity Networks Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
SPA	58 Neutral	£75.97M	2,266.67	0.15%	―	5.35%	-97.78%
NCC	54 Neutral	£427.54M	25.03	―	2.16%	―	―
TEK	52 Neutral	£23.84M	5.28	7.07%	―	―	―
PEN	47 Neutral	£9.51M	-1.96	-52.41%	―	-31.21%	-292.31%
CRDL	45 Neutral	£12.80M	-32.89	-14.44%	―	7.86%	70.77%
ENET	45 Neutral	£531.69K	-0.05	-203.82%	―	-54.10%	85.53%

Ethernity Networks Ltd. Corporate Events

Ethernity Networks Expands Market Reach with New Partnerships and Product Developments

Ethernity Networks Ltd has announced significant developments in its business operations, including a potential partnership for its ASSP device, which targets diverse markets such as wireless backhaul and broadband access. The company is also seeing increased royalty revenues from an OEM customer and has received additional orders from Tier-1 U.S. PON vendors. Ethernity is expanding its FPGA portfolio with a low-latency solution for defense, mobile, and IoT applications, aligning with the U.S. Government’s approval to sell this technology to U.S. defense and aerospace vendors. These advancements are expected to enhance Ethernity’s market position and financial performance, with anticipated positive cash flow and a return to profitability.

The most recent analyst rating on (GB:ENET) stock is a Hold with a £0.01 price target. To see the full list of analyst forecasts on Ethernity Networks Ltd. stock, see the GB:ENET Stock Forecast page.

Ethernity Networks Restructures Share Capital Following EGM Approval

Ethernity Networks Ltd announced the successful passage of all resolutions at their Extraordinary General Meeting, leading to the reclassification of their ordinary shares and the conversion of a previously issued convertible loan note. This strategic move will result in the issuance of over 4 billion new ordinary shares, significantly increasing the company’s share capital and positioning it for enhanced trading on AIM. The reclassification and conversion are expected to streamline operations and potentially attract more investors, reflecting the company’s proactive approach to financial restructuring.

Ethernity Networks Secures Shareholder Approval at AGM

Ethernity Networks Ltd announced that all resolutions proposed at their Annual General Meeting were successfully passed. This includes the reappointment of the independent external auditor and a board member, indicating strong shareholder support. The approval of these resolutions reflects positively on the company’s governance and may strengthen its market position by ensuring continuity in leadership and oversight. The successful AGM outcomes suggest a stable operational environment, which could reassure stakeholders and potentially enhance investor confidence.

Ethernity Networks Secures Key Patent for Advanced Routing Technology

Ethernity Networks Ltd has been granted a U.S. patent for a highly optimized method for routing using a longest prefix matching algorithm. This patent, which eliminates the need for costly external components, strengthens Ethernity’s intellectual property portfolio and reinforces its position as a technology leader in data processing for routing applications. The patented design enhances the company’s ASSP offering and is optimized for significantly higher performance, capable of operating at 10 times the throughput of previous designs. This innovation positions Ethernity to deliver integrated and cost-effective silicon solutions that meet the evolving needs of OEMs and service providers.

Ethernity Networks Announces Fundraising and Share Reclassification

Ethernity Networks Ltd announced a fundraising initiative of £342,500 through a placing and convertible loan note to support its working capital needs and strengthen its position in negotiations with semiconductor vendors. The company plans to reclassify its share capital to a no par value structure, allowing greater flexibility for future equity issuances, which is crucial for the conversion terms of the loan note. The fundraising is expected to enhance Ethernity’s strategic collaboration efforts and advance its ASIC strategy, driven by strong interest from Tier-1 wireless backhaul equipment vendors.

Ethernity Networks Announces Upcoming AGM

Ethernity Networks Ltd has announced the dispatch of its annual general meeting notice to shareholders, with the meeting scheduled for November 27, 2025, in Israel. This announcement underscores the company’s ongoing commitment to transparency and stakeholder engagement, which is crucial for maintaining its position in the competitive networking technology industry.