Spectra Systems (SPSC) AI Stock Analysis

• Market Cap: £76.02M
• Dividend Yield: 4.16%
• Average Volume (3M): 0.00
• Price to Earnings (P/E): ―
• Beta (1Y): 0.89
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: UK
• Employees: 28
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.16
• Shares Outstanding: 542,258
• 10 Day Avg. Volume: 0
• 30 Day Avg. Volume: 0
• PEG Ratio: 0.43
• Price to Book (P/B): 3.93
• Price to Sales (P/S): 2.86
• P/FCF Ratio: 16.61
• 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: 72 Outperform
• Price Target: 228.00p ▲(11.22% Upside)

Spectra Systems' overall score is driven primarily by strong financial performance, including robust revenue growth and cash flow management. Technical analysis provides mixed signals with potential short-term bullish momentum offset by overbought conditions. Valuation lacks comprehensive data, relying on a modest dividend yield.

Positive Factors

Revenue Growth

Spectra Systems' significant revenue growth reflects strong demand for its products, indicating a solid market position and effective sales strategy.

Cash Flow Management

Efficient cash flow management ensures Spectra Systems can reinvest in growth opportunities and maintain financial flexibility, supporting long-term stability.

Balance Sheet Health

A strong balance sheet with low leverage enhances Spectra Systems' financial stability, reducing risk and supporting sustainable growth.

Negative Factors

Return on Equity

While financially stable, Spectra Systems' modest return on equity suggests potential inefficiencies in generating returns from shareholder investments.

Employee Base

A small employee base may limit Spectra Systems' ability to scale operations quickly, potentially impacting its capacity to seize market opportunities.

Market Position

Limited valuation data and reliance on dividend yield suggest challenges in fully assessing Spectra Systems' competitive market position.

Spectra Systems Business Overview & Revenue Model

Company Description

Spectra Systems Corporation invents, develops, and sells integrated optical systems in Rhode Island and internationally. It operates through three segments: Authentication Systems, Secure Transactions, and Banknote Cleaning. The company offers integrated solutions, including a system of taggant materials and sensor technology to authenticate banknotes that are used by central banks, as well as G7 country for passport security; banknote cleaning and disinfection systems that lifts sebum and other substances from the banknote through a dry process based on supercritical CO2 cleaning; and solutions to authenticate brand name products. It also provides optical materials for security and quality control, such as fluorescent and phosphorescent pigments and dyes, invisible pigments and dyes, and gasochromic response materials; customized materials and hardware solutions; and internal control systems used to verify the accuracy of transactions logged by providers of lottery and gaming operators. In addition, the company offers software and hardware systems comprising high-speed currency authentication sensors; quality control equipment for use in paper and polymer banknote manufacturing and printing; and security printers and hologram makers. The company was formerly known as Spectra Science Corporation and changed its name to Spectra Systems Corporation in June 2001. Spectra Systems Corporation was incorporated in 1996 and is headquartered in Providence, Rhode Island.

How the Company Makes Money

Spectra Systems generates revenue through multiple streams, primarily by selling its proprietary security materials and systems to central banks and security printing firms worldwide. The company's key revenue streams include the sale of its advanced security features for banknotes, software solutions for verifying currency authenticity, and consulting services related to security technologies. Additionally, partnerships with governments and financial institutions bolster its revenue, as they often seek high-tech solutions to combat counterfeiting and enhance security measures. The company also benefits from long-term contracts and licensing agreements, ensuring a consistent income flow from its intellectual property and technology innovations.

Spectra Systems Financial Statement Overview

Summary

Spectra Systems shows strong revenue and profit growth, a robust balance sheet with low leverage, and efficient cash flow management. The company is financially stable with room for improvement in return on equity.

Income Statement

Spectra Systems has demonstrated strong revenue growth, increasing from $20.29M in 2023 to $49.19M in 2024, a remarkable growth rate. The gross profit margin has remained robust, and net income has improved significantly. The company maintains healthy EBIT and EBITDA margins, indicating efficient operations and effective cost management.

Balance Sheet

The balance sheet shows a solid equity position, with stockholders' equity increasing over time. The debt-to-equity ratio is low, signifying low leverage and financial stability. A high equity ratio further reflects a strong financial base. However, the relatively modest return on equity indicates room for improvement in generating returns from shareholder investments.

Cash Flow

Spectra Systems has shown healthy growth in free cash flow, supported by strong operating cash flows. The operating cash flow to net income ratio is impressive, highlighting efficient cash conversion from profits. The company has managed capital expenditures effectively to enhance free cash flow, ensuring robust cash flow management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	61.42M	49.19M	20.29M	19.63M	16.59M	14.68M
Gross Profit	30.71M	23.49M	13.62M	12.28M	10.52M	10.07M
EBITDA	22.67M	14.70M	8.21M	7.91M	6.74M	6.30M
Net Income	13.33M	8.52M	6.05M	6.15M	5.16M	5.12M
Balance Sheet
Total Assets	64.24M	60.97M	60.10M	38.02M	33.15M	32.90M
Cash, Cash Equivalents and Short-Term Investments	2.56M	13.35M	13.25M	17.50M	16.77M	14.04M
Total Debt	10.63M	10.58M	12.53M	1.27M	1.02M	1.23M
Total Liabilities	22.73M	24.65M	27.98M	9.70M	5.23M	4.68M
Stockholders Equity	40.95M	35.77M	31.54M	27.73M	27.28M	27.48M
Cash Flow
Free Cash Flow	8.22M	8.46M	7.04M	6.58M	7.54M	4.66M
Operating Cash Flow	8.97M	9.90M	7.52M	8.04M	8.08M	5.57M
Investing Cash Flow	-5.10M	-2.98M	-6.67M	-1.46M	88.00K	-670.00K
Financing Cash Flow	-5.82M	-6.86M	-5.10M	-5.80M	-5.43M	-5.10M

Spectra Systems Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 205.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:SPSC, the sentiment is Positive. The current price of 205 is below the 20-day moving average (MA) of 205.00, above the 50-day MA of 205.00, and above the 200-day MA of 203.43, indicating a neutral trend. The MACD of <0.01 indicates Positive momentum. The RSI at 87.96 is Negative, 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 Positive sentiment for GB:SPSC.

Spectra Systems Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SPSC	72 Outperform	£76.02M	―	―	4.16%	―	―
GBG	70 Outperform	£586.02M	68.94	1.56%	1.73%	-0.18%	11.49%
IDOX	66 Neutral	£323.75M	51.82	8.06%	1.04%	10.93%	12.30%
IGP	64 Neutral	£75.55M	20.32	23.08%	―	-19.19%	-41.12%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
NCC	54 Neutral	£427.54M	25.03	―	2.16%	―	―
PEN	47 Neutral	£9.51M	-1.96	-52.41%	―	-31.21%	-292.31%