Surface Transforms (SCE) AI Stock Analysis

• Market Cap: £22.79M
• Dividend Yield: N/A
• Average Volume (3M): 9.39M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.09
• Revenue Growth: 34.87%
• EPS Growth: 77.15%
• Country: UK
• Employees: 147
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Parts
• EPS (TTM): >-0.01
• Shares Outstanding: 1,302,072,600
• 10 Day Avg. Volume: 4,713,788
• 30 Day Avg. Volume: 9,393,228
• PEG Ratio: <0.01
• Price to Book (P/B): 0.43
• Price to Sales (P/S): 0.54
• P/FCF Ratio: -0.24
• 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: 47 Neutral
• Price Target: 2.00p ▲(21.21% Upside)

Surface Transforms' overall stock score is primarily impacted by its financial performance challenges, including negative profitability and cash flow issues. While technical indicators suggest a bearish trend, recent corporate events and strategic initiatives provide a positive outlook. The company's valuation remains unattractive due to its negative P/E ratio. The most significant factors are the financial performance and technical analysis, which weigh heavily on the overall score.

Positive Factors

Proprietary Product Technology

Surface Transforms' carbon-ceramic braking technology is a durable competitive asset: superior performance, lower weight and higher durability create technical differentiation that supports OEM qualification cycles, premium positioning and higher switching costs that can sustain long-term margins in performance and EV segments.

OEM Partnerships and EV Exposure

Direct OEM contracts and partnerships, especially with EV manufacturers, provide structural revenue channels and volume potential. Long OEM qualification processes create sticky customer relationships and recurring large orders, improving visibility and supporting scale benefits if the company converts trials into series supply.

Top-line Momentum

Consistent revenue growth near 35% signals durable market demand and successful commercialization of products. Sustained top-line expansion can enable operating leverage, justify capacity and R&D investment, and provide a runway to improve margins if management controls costs and shifts mix toward higher-margin OEM business.

Negative Factors

Persistent Unprofitability

Ongoing negative net income, EBIT and EBITDA indicate structural profitability issues. Persistent losses limit reinvestment from operations, require continual external funding, and mean scaling revenue alone may not translate to durable shareholder returns without sustained cost reduction or pricing power improvements.

Negative Operating and Free Cash Flow

Negative operating and free cash flow show core operations don't generate internal liquidity, constraining capex, inventory build or R&D spending. Reliance on external financing raises refinancing and dilution risk, and weak cash conversion undermines financial resilience over a multi-quarter horizon.

Rising Leverage and Weakened Balance Sheet

A deteriorating balance sheet with higher debt-to-equity reduces financial flexibility and increases interest/service burdens. Elevated leverage limits the company's ability to fund growth or absorb demand shocks without more external capital, elevating solvency and strategic risk over the medium term.

Surface Transforms Business Overview & Revenue Model

Company Description

Surface Transforms Plc, together with its subsidiaries, researches, designs, develops, manufactures, and sells carbon ceramic products for the brakes market in the United Kingdom, Germany, Sweden, rest of Europe, the United States, and internationally. It offers carbon-ceramic brake discs for automotive and aircraft applications. The company also provides carbon-ceramic materials for various applications, such as motorsports, military, and other special vehicles. Surface Transforms Plc was founded in 1992 and is based in Liverpool, the United Kingdom.

How the Company Makes Money

Surface Transforms generates revenue through the sale of its carbon-ceramic brake discs and associated products primarily to automakers and aftermarket suppliers. The company's revenue model is based on direct contracts with OEMs (Original Equipment Manufacturers) and partnerships with automotive manufacturers, particularly those focusing on high-performance and electric vehicles. Key revenue streams include large-scale orders from automotive manufacturers, ongoing supply agreements, and aftermarket sales. Significant partnerships with major automotive brands, including those in the EV sector, enhance their market presence and contribute to consistent earnings. Additionally, the company's commitment to innovation and development in the growing electric vehicle market positions it for future growth and revenue diversification.

Surface Transforms Financial Statement Overview

Summary

Surface Transforms is experiencing revenue growth, but profitability and cash flow generation remain significant hurdles. The company's increasing reliance on debt financing and poor cash flow metrics indicate potential financial risk. While revenue growth is a positive sign, the company's high operational costs and negative profitability metrics highlight ongoing challenges that need addressing for sustainable growth.

Income Statement

Surface Transforms has shown revenue growth over the years, with a notable increase from 2023 to 2024. However, the company remains unprofitable with negative net income and EBIT margins, indicating ongoing operational challenges. The negative EBITDA further highlights the company's struggle to cover operating expenses. Despite the growth in revenue, the high cost structure and negative profit margins are significant concerns.

Balance Sheet

The balance sheet reflects a company with increasing debt levels, as seen in the rising debt-to-equity ratio. The equity ratio has decreased, indicating a higher leverage and potential risk. The return on equity is negative due to continued net losses. These factors point to financial instability and reliance on external financing, raising concerns about the company's long-term financial health.

Cash Flow

Operating cash flow remains negative, indicating that core business operations are not generating cash. Free cash flow is also negative, and there is no free cash flow growth, which limits the company's ability to invest in growth opportunities without external financing. The operating cash flow to net income ratio is unfavorable, reflecting poor cash conversion and efficiency issues.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	11.71M	8.24M	7.31M	4.04M	2.37M	1.95M
Gross Profit	6.68M	4.11M	4.17M	3.08M	1.55M	1.31M
EBITDA	-19.03M	-21.12M	-19.28M	-4.90M	-3.77M	-2.31M
Net Income	-20.40M	-22.35M	-19.56M	-4.78M	-3.95M	-2.30M
Balance Sheet
Total Assets	35.59M	25.45M	31.95M	40.17M	26.37M	8.77M
Cash, Cash Equivalents and Short-Term Investments	1.25M	462.00K	7.41M	14.92M	12.97M	1.06M
Total Debt	10.97M	7.45M	2.40M	2.73M	3.29M	1.82M
Total Liabilities	30.07M	15.13M	8.22M	6.62M	5.48M	3.10M
Stockholders Equity	5.37M	10.32M	23.73M	32.81M	20.89M	5.68M
Cash Flow
Free Cash Flow	-8.21M	-18.34M	-18.31M	-14.81M	-7.67M	-1.66M
Operating Cash Flow	-4.40M	-14.03M	-10.26M	-6.46M	-3.73M	-1.01M
Investing Cash Flow	-3.88M	-4.15M	-8.05M	-5.34M	-3.95M	-643.00K
Financing Cash Flow	4.55M	12.61M	9.50M	16.42M	19.61M	1.96M

Surface Transforms Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1.65
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:SCE, the sentiment is Negative. The current price of 1.65 is below the 20-day moving average (MA) of 1.73, below the 50-day MA of 1.81, and above the 200-day MA of 1.48, indicating a neutral trend. The MACD of <0.01 indicates Negative momentum. The RSI at 47.98 is Neutral, neither overbought nor oversold. The STOCH value of 21.06 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:SCE.

Surface Transforms Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
CTA	61 Neutral	£21.71M	3.36	30.82%	―	-18.51%	-13.40%
AUTG	52 Neutral	£5.19M	-5.14	-11.13%	―	-15.55%	-25.85%
SYM	51 Neutral	£21.86M	-14.92	―	―	3.78%	47.46%
CAR	49 Neutral	£42.14M	22.78	―	―	-7.27%	―
SCE	47 Neutral	£22.79M	-1.11	-131.18%	―	34.87%	77.15%
STG	46 Neutral	£4.28M	-1.21	-139.52%	―	-11.86%	-16.21%

Surface Transforms Corporate Events

Surface Transforms Awards Share Options to Drive Growth

Surface Transforms plc has announced the award of 89,250,000 share options under its long-term incentive plan to its Executive and Senior Management Team. This move is aimed at stabilizing the company and driving profitable growth, with the options designed to attract and retain top talent. The options, which represent 6.85% of the company’s total issued share capital, are contingent on meeting specific performance criteria related to disc sales. This strategic initiative reflects the company’s efforts to navigate a challenging period and enhance shareholder value.

The most recent analyst rating on (GB:SCE) stock is a Sell with a £2.00 price target. To see the full list of analyst forecasts on Surface Transforms stock, see the GB:SCE Stock Forecast page.