Nanoco Group plc (NANO) AI Stock Analysis

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Nanoco Group plc

(LSE:NANO)

Rating:53Neutral

Price Target:

0.00p

▼(-100.00% Downside)

The overall stock score reflects strong revenue growth and positive cash flow management, tempered by profitability challenges and negative equity. Technical indicators show upward momentum, but overbought signals pose short-term risks. Valuation concerns arise from the negative P/E ratio and lack of dividends. Earnings call sentiment is mixed, with some progress but also notable challenges. Recent corporate events add potential upside but also legal risk.

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

Market Cap

£24.96M

Dividend YieldN/A

Average Volume (3M)782.36K

Price to Earnings (P/E)―

Beta (1Y)0.89

Revenue Growth-8.06%

EPS Growth-132.47%

CountryUK

Employees47

SectorTechnology

Sector Strength94

IndustrySemiconductors

Share Statistics

EPS (TTM)>-0.01

Shares Outstanding194,608,030

10 Day Avg. Volume379,832

30 Day Avg. Volume782,363

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)0.00

Price to Sales (P/S)0.00

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

£11.50

Price Target Upside-14.69% Downside

Rating ConsensusHold

Number of Analyst Covering0

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: 90.13%|

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 shows strong revenue growth and excellent gross profit margins. However, the transition 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.

Income Statement

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

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

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	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement
Total Revenue	7.87M	5.62M	2.47M	2.09M	3.86M
Gross Profit	6.66M	4.77M	1.09M	757.00K	1.78M
EBITDA	3.58M	15.94M	-3.82M	-3.88M	-4.16M
Net Income	-1.25M	11.09M	-4.70M	-4.39M	-5.08M
Balance Sheet
Total Assets	30.66M	50.77M	10.89M	9.23M	11.86M
Cash, Cash Equivalents and Short-Term Investments	20.29M	8.21M	6.76M	3.81M	5.17M
Total Debt	1.91M	6.43M	3.56M	1.08M	1.58M
Total Liabilities	47.67M	34.35M	6.41M	6.18M	4.83M
Stockholders Equity	-17.01M	16.41M	4.48M	3.05M	7.03M
Cash Flow
Free Cash Flow	49.88M	-28.22M	-1.90M	-3.75M	-4.24M
Operating Cash Flow	51.48M	-27.84M	-1.78M	-3.36M	-3.53M
Investing Cash Flow	-816.00K	34.18M	-82.00K	-344.00K	-704.00K
Financing Cash Flow	-38.92M	-5.08M	4.79M	2.32M	2.40M

Nanoco Group plc Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price13.48

Price Trends

50DMA

11.98

Positive

100DMA

10.79

Positive

200DMA

11.24

Positive

Market Momentum

MACD

0.42

Positive

RSI

52.54

Neutral

STOCH

50.00

Neutral

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 13.48 is above the 20-day moving average (MA) of 13.44, above the 50-day MA of 11.98, and above the 200-day MA of 11.24, indicating a neutral trend. The MACD of 0.42 indicates Positive momentum. The RSI at 52.54 is Neutral, neither overbought nor oversold. The STOCH value of 50.00 is Neutral, 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
Sector *	61 Neutral	$34.84B	5.87	-10.42%	2.07%	6.67%	-8.83%
NANO	53 Neutral	£24.96M	―	-5780.00%	―	-8.06%	-132.47%
OXINF	―	$1.37B	41.83	7.03%	1.25%	―	―
KBT	51 Neutral	$22.94M	37.82	-8.92%	―	-46.97%	―
IQE	48 Neutral	£92.88M	―	-25.13%	―	2.41%	-16.47%
GST	44 Neutral	£18.02M	―	-9.27%	―	―	―
CRTA	41 Neutral	£24.64M	―	-102.60%	―	11.59%	75.79%

* Technology Sector Average

Performance Comparison

GB:NANO

Nanoco Group plc

13.22

-1.28

-8.83%

OXINF

Oxford Instruments

24.82

-4.01

-13.91%

GB:IQE

IQE plc

9.50

-18.50

-66.07%

GB:KBT

K3 Business Technology

45.00

-22.50

-33.33%

GB:CRTA

Wandisco

19.50

-21.90

-52.90%

GB:GST

GSTechnologies

0.78

0.19

32.20%

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.

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.Date of analysis: Jul 08, 2025