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Nanoco Group PLC (GB:NANO)
LSE:NANO

Nanoco Group plc (NANO) AI Stock Analysis

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Nanoco Group plc

(LSE:NANO)

Rating:45Neutral
Price Target:
13.00p
▲(18.18%Upside)
Nanoco Group plc faces significant challenges, particularly financial instability due to net losses and negative equity. Despite strong revenue growth and efficient cash flow management, profitability issues and bearish technical indicators weigh heavily on the stock. Positive corporate events and earnings call insights provide some optimism, but the company's ability to secure contracts and improve profitability is crucial for future performance.

Nanoco Group plc (NANO) vs. iShares MSCI United Kingdom ETF (EWC)

Nanoco Group plc Business Overview & Revenue Model

Company DescriptionNanoco Group plc, together with its subsidiaries, engages in the research, development, manufacture, and licensing of novel nanomaterials for use in various commercial applications. The company offers CFQD quantum dots which are fluorescent semiconductor nanoparticles for OLED and µLED colour conversion, QD-EL, and security tagging applications; CFQD fine color films; HEATWAVE quantum dots for use in the sensor industry applications; and VIVODOTS nanoparticles for medical and veterinary applications. It has operations in the United Kingdom, rest of Europe, Asia, and the United States. The company was formerly known as Evolutec Group plc and changed its name to Nanoco Group plc in April 2009. Nanoco Group plc was founded in 2001 and is headquartered in Manchester, the United Kingdom.
How the Company Makes MoneyNanoco Group plc generates revenue primarily through the sale of its quantum dot materials and related technologies. The company's revenue model includes direct sales to manufacturers and licensing agreements with industrial partners who incorporate Nanoco's materials into their own products. Significant partnerships with major electronics and display manufacturers are a key factor contributing to the company's earnings, as these collaborations drive the adoption of its quantum dot technology in consumer electronics. Additionally, Nanoco may earn income from research and development contracts and government grants aimed at advancing nanomaterial technologies.

Nanoco Group plc Earnings Call Summary

Earnings Call Date:Apr 15, 2025
(Q2-2025)
|
% Change Since: 55.15%|
Next Earnings Date:Oct 21, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook with both positive and negative elements. The company highlighted significant progress with new customers, a completed device lab, and positive market growth projections. However, challenges included a decline in revenue, loss after tax, and delays in the M&A process. While the company is optimistic about future growth, concerns about securing commercial contracts persist.
Q2-2025 Updates
Positive Updates
Successful Engagement with New Customers
The company made significant progress with existing customers and engaged several new customers, some approaching formalized contracts.
Fully Equipped Device Lab
Investment in the device lab is completed, allowing timely customer demos for image sensor market.
Reorganization and Reduced Cash Burn
Reorganization led to a more focused team and reduced cash burn by 30%, from £0.7 million to £0.5 million per month.
Market Growth Projections
Quantum dot materials market expected to reach $1 billion by 2029, with substantial growth drivers identified.
Significant Growth in Quantum Dot LCD Market
Robust growth of 27%-28% expected this year, largely fueled by mini-LED configuration tied to quantum dots.
Positive Financial Position
Finished the period with €15.5 million of cash in the bank, no external debt, and revenue forecast upgraded to £6.9 million.
Negative Updates
Revenue Decline
Revenue fell by 13% due to the cancellation of a contract with a European customer, impacting gross profit and adjusted EBITDA.
Loss After Tax
The loss after tax was €1.0 million compared to a profit of €1.8 million in the prior year.
Delays in M&A Process
Investors expressed frustration with the pace of the M&A process, which is taking longer than some expected.
Uncertainty in Commercial Contracts
Despite positive projections, there is a lack of real improvements in securing commercial contracts, leading to doubts about 'jam tomorrow' promises.
Company Guidance
During the interim results presentation for Nanoco Group PLC, the management provided extensive guidance on several operational and financial metrics. Dmitry Shashkov, the CEO, highlighted significant progress with existing and new customers, noting that some are nearing formalized contract stages. A key investment in their device lab has been completed, enhancing their image sensor market demos. The company successfully reorganized to focus more on commercial development, reducing monthly cash burn by approximately 30% from GBP 0.7 million to GBP 0.5 million, extending their cash runway. The update also indicated a robust market forecast for quantum dot materials, projecting growth to approximately $1 billion by 2029. Additionally, they are exploring new market segments, with a target to generate revenue within 12 to 24 months. Financially, revenue fell by 13% due to a contract cancellation, impacting adjusted EBITDA, which decreased from EUR 0.7 million to EUR 0.5 million. Despite this, the company's cash reserves remain healthy at EUR 15.5 million, with no external debt. The company also reported on their strategic review, revealing ongoing efforts to find new ownership for Nanoco's trading business, aiming for a sale agreement by the third quarter of 2025.

Nanoco Group plc Financial Statement Overview

Summary
Nanoco Group plc exhibits strong revenue growth and excellent gross profit margins, but the shift to a net loss and negative equity position signals underlying challenges. While cash flow management is commendable, the negative equity raises concerns about financial stability. The company must address profitability and balance sheet issues to ensure long-term sustainability.
Income Statement
45
Neutral
The company has demonstrated significant revenue growth from 2023 to 2024, with a revenue increase of approximately 40.1%. However, despite the revenue growth, the company has moved from a net profit in 2023 to a net loss in 2024, resulting in a negative net profit margin. The gross profit margin is strong at 84.6%, indicating efficient production or service delivery. Nonetheless, the transition to a net loss and the negative EBIT margin of 21.7% highlight profitability challenges.
Balance Sheet
30
Negative
The balance sheet reflects financial instability, as indicated by the negative stockholders' equity of -£17 million in 2024. This, coupled with a total debt of £1.9 million, raises concerns about the company's leverage and stability. The debt-to-equity ratio is not meaningful due to negative equity, and the equity ratio is also negative. These factors suggest financial distress, potentially posing risks to creditors and stakeholders.
Cash Flow
65
Positive
The cash flow statement shows a robust operating cash flow in 2024, significantly improving from previous years and resulting in a highly positive free cash flow. This indicates strong cash generation capabilities despite the net loss. The free cash flow to net income ratio is favorable, suggesting efficient cash management. However, the sustainability of this cash flow remains uncertain given the net loss scenario.
Breakdown
TTMSep 2024Sep 2023Sep 2022Sep 2021Sep 2020
Income StatementTotal Revenue
7.37M7.87M5.62M2.47M2.09M3.86M
Gross Profit
5.85M6.66M4.77M1.09M757.00K1.78M
EBIT
-642.00K1.71M14.99M-4.50M-4.86M-5.85M
EBITDA
113.00K3.58M15.94M-3.82M-3.88M-4.16M
Net Income Common Stockholders
-4.05M-1.25M11.09M-4.70M-4.39M-5.08M
Balance SheetCash, Cash Equivalents and Short-Term Investments
15.48M20.29M8.21M6.76M3.81M5.17M
Total Assets
25.15M30.66M50.77M10.89M9.23M11.86M
Total Debt
1.61M1.91M6.43M3.56M1.08M1.58M
Net Debt
-13.87M-18.38M-1.77M-3.20M-2.73M-3.59M
Total Liabilities
43.76M47.67M34.35M6.41M6.18M4.83M
Stockholders Equity
-18.61M-17.01M16.41M4.48M3.05M7.03M
Cash FlowFree Cash Flow
-3.96M49.88M-28.22M-1.90M-3.75M-4.24M
Operating Cash Flow
-3.33M51.48M-27.84M-1.78M-3.36M-3.53M
Investing Cash Flow
-752.00K-816.00K34.18M-82.00K-344.00K-704.00K
Financing Cash Flow
-39.93M-38.92M-5.08M4.79M2.32M2.40M

Nanoco Group plc Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price11.00
Price Trends
50DMA
9.68
Positive
100DMA
9.98
Positive
200DMA
11.27
Positive
Market Momentum
MACD
0.53
Positive
RSI
49.11
Neutral
STOCH
14.10
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:NANO, the sentiment is Neutral. The current price of 11 is below the 20-day moving average (MA) of 12.47, above the 50-day MA of 9.68, and below the 200-day MA of 11.27, indicating a neutral trend. The MACD of 0.53 indicates Positive momentum. The RSI at 49.11 is Neutral, neither overbought nor oversold. The STOCH value of 14.10 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GB:NANO.

Nanoco Group plc Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
61
Neutral
$11.55B10.41-6.86%2.93%7.50%-8.30%
45
Neutral
£20.44M-5780.00%-8.06%-132.47%
$1.41B21.0914.23%1.09%
GBIQE
£102.96M-25.13%
GBKBT
57
Neutral
£40.84M74.79-8.92%-46.97%
51
Neutral
£40.24M-102.60%11.59%75.79%
GBGST
44
Neutral
£28.14M-9.27%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GB:NANO
Nanoco Group plc
11.00
-6.50
-37.14%
OXINF
Oxford Instruments
24.45
-5.85
-19.31%
GB:IQE
IQE plc
10.18
-20.67
-67.00%
GB:KBT
K3 Business Technology
89.00
-7.00
-7.29%
GB:CRTA
Wandisco
31.85
-49.35
-60.78%
GB:GST
GSTechnologies
1.30
0.44
51.16%

Nanoco Group plc Corporate Events

Product-Related AnnouncementsBusiness Operations and Strategy
Nanoco Group Expands Asian Partnerships with New Joint Development Agreement
Positive
Apr 28, 2025

Nanoco Group plc has entered a Joint Development Agreement with a second Asian chemical customer to optimize lead-free nanomaterials for electronics. This agreement is expected to boost the company’s revenue in FY25 and FY26 and strengthen its position in the consumer electronics market, particularly in quantum dot-enabled silicon sensors.

Legal Proceedings
Nanoco Group Initiates Patent Lawsuit Against LG Electronics
Negative
Apr 25, 2025

Nanoco Group plc has initiated a patent infringement lawsuit against LG Electronics, alleging unauthorized use of its patented quantum dot technology in LG’s television products. The company seeks a permanent injunction and monetary damages, although the exact amount is yet to be determined. Nanoco has engaged the law firm Caldwell, Cassady and Curry, known for their successful litigation against Samsung, to represent them. While litigation carries risks, Nanoco’s board believes the potential benefits justify the action, aiming to protect its intellectual property and ensure shareholder value.

Legal ProceedingsBusiness Operations and Strategy
Nanoco Group Secures High Court Approval for Capital Reduction
Positive
Apr 17, 2025

Nanoco Group plc announced the High Court of Justice in England and Wales has confirmed the company’s Capital Reduction, which was previously approved by 81.2% of shareholders. This move aims to create distributable reserves, enhancing the company’s financial flexibility and potentially benefiting stakeholders by supporting future growth and investment opportunities.

Executive/Board ChangesBusiness Operations and StrategyFinancial Disclosures
Nanoco Group Reports Steady Progress and Strategic Growth Amid Interim Results
Positive
Apr 15, 2025

Nanoco Group plc has reported its unaudited interim results for the half-year ending January 31, 2025, highlighting steady progress in commercial opportunities and strategic growth. The company has appointed new leadership, expanded its commercial pipeline, and is in advanced discussions with significant Asian chemical companies to further develop quantum dot materials for various applications. Despite a decrease in revenue due to a canceled contract, Nanoco anticipates exceeding market expectations for the full year, driven by new business development and strategic cost reductions. The company is also exploring strategic options for its trading business through CDX Advisors LLC, with potential investor proposals expected in the summer.

Financial Disclosures
Nanoco Group to Release Half Year Results in April 2025
Neutral
Mar 13, 2025

Nanoco Group plc has announced that it will release its Half Year Results for the period ended 31 January 2025 on 15 April 2025. This announcement is significant as it provides stakeholders with insights into the company’s financial performance and operational progress. The release of these results is expected to impact Nanoco’s positioning in the market, particularly within the electronics industry, where its cadmium-free quantum dots are a notable innovation.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.