Shearwater (SWG) AI Stock Analysis

• Market Cap: £10.13M
• Dividend Yield: N/A
• Average Volume (3M): 38.95K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.31
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: UK
• Employees: 90
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): -0.03
• Shares Outstanding: 23,826,380
• 10 Day Avg. Volume: 30,021
• 30 Day Avg. Volume: 38,950
• PEG Ratio: 0.00
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• 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: 43 Neutral
• Price Target: 43.00p ▲(0.00% Upside)

Shearwater's overall stock score is primarily impacted by its strong revenue growth, which is overshadowed by significant profitability and cash flow challenges. The technical indicators suggest a bearish trend with weak market momentum. Valuation metrics are unfavorable due to ongoing losses and the absence of a dividend yield.

Positive Factors

Revenue Growth

Strong revenue growth indicates increasing demand for Shearwater's products and services, enhancing its market position and long-term potential.

Market Position

Partnerships with key stakeholders expand Shearwater's market presence and drive sales, supporting sustainable revenue streams.

Balance Sheet Health

A strong balance sheet with low leverage provides financial stability, enabling Shearwater to invest in growth opportunities.

Negative Factors

Profitability Challenges

Ongoing profitability issues can hinder Shearwater's ability to reinvest in business growth and may affect long-term sustainability.

Cash Flow Management

Declining free cash flow suggests liquidity constraints, which could limit Shearwater's operational flexibility and investment capacity.

Operational Inefficiencies

Operational inefficiencies can reduce profitability and cash generation, impacting Shearwater's ability to sustain growth and competitiveness.

Shearwater Business Overview & Revenue Model

Company Description

Shearwater (SWG) is a leading provider of advanced technology solutions, primarily focused on the sectors of renewable energy, water management, and environmental sustainability. The company specializes in developing innovative software and hardware products designed to optimize resource usage and enhance operational efficiency for businesses and government agencies. Shearwater's core offerings include data analytics platforms, IoT-enabled devices, and consulting services aimed at promoting sustainable practices across various industries.

How the Company Makes Money

Shearwater generates revenue through multiple streams, including the sale of software licenses and subscription services for its data analytics platforms. Additionally, the company earns income from hardware sales related to its IoT devices and sensors, which are essential for monitoring and managing resources in real-time. Consulting services also contribute to revenue, as organizations seek Shearwater's expertise in implementing sustainable solutions. Strategic partnerships with governmental bodies and private sector companies enhance its market reach and drive sales, while ongoing maintenance and support contracts provide a steady income stream.

Shearwater Financial Statement Overview

Summary

Shearwater's financial performance is mixed. The income statement reveals challenges in profitability and revenue stability, with a significant decline in revenue and a negative net profit margin. However, the balance sheet is stable with low leverage, and cash flow shows improvement with positive free cash flow.

Income Statement

Shearwater's income statement shows significant volatility in revenue trends, with a notable decline of 15.1% from 2023 to 2024. The company struggles with profitability, indicated by a negative net profit margin of -9.6% in 2024, despite a slightly improved EBITDA margin of 1.4%. The gross profit margin remains low at 14.7%, suggesting challenges in cost management or pricing strategy.

Balance Sheet

The balance sheet reveals a relatively strong equity position, with an equity ratio of 73.9% in 2024, indicating financial stability. However, the company has a low debt-to-equity ratio of 0.008, which is positive but could indicate under-leverage. Return on equity is negative at -4.7%, reflecting the company's ongoing profitability challenges.

Cash Flow

Cash flow analysis shows improvement, with a positive free cash flow of 1.2 million in 2024, up from negative values in previous years. The operating cash flow to net income ratio is positive at 1.06, indicating better cash generation relative to net income. However, the free cash flow to net income ratio reflects challenges at 0.57, suggesting room for improving cash efficiency.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	23.44M	31.64M	22.64M	26.69M	35.88M	31.77M
Gross Profit	6.20M	4.18M	6.85M	3.32M	7.41M	6.70M
EBITDA	-534.00K	-7.21M	320.00K	-6.42M	4.46M	3.39M
Net Income	-2.82M	-9.57M	-2.17M	-8.18M	-292.00K	145.00K
Balance Sheet
Total Assets	54.90M	53.23M	62.23M	69.70M	78.61M	72.68M
Cash, Cash Equivalents and Short-Term Investments	3.00M	5.06M	4.97M	3.96M	5.58M	8.05M
Total Debt	300.00K	267.00K	378.00K	321.00K	206.00K	1.06M
Total Liabilities	10.50M	19.50M	16.25M	21.58M	22.40M	16.19M
Stockholders Equity	44.40M	33.73M	45.98M	48.12M	56.21M	56.49M
Cash Flow
Free Cash Flow	2.09M	1.62M	1.23M	-1.41M	-1.60M	5.84M
Operating Cash Flow	2.13M	1.64M	2.30M	-74.00K	-456.00K	6.59M
Investing Cash Flow	-1.05M	-1.37M	-1.07M	-1.34M	-1.15M	-737.00K
Financing Cash Flow	-292.00K	-185.00K	-216.00K	-200.00K	-872.00K	-1.15M

Shearwater Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 43.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:SWG, the sentiment is Negative. The current price of 43 is below the 20-day moving average (MA) of 44.00, below the 50-day MA of 51.57, and below the 200-day MA of 48.97, indicating a bearish trend. The MACD of -2.36 indicates Negative momentum. The RSI at 34.12 is Neutral, neither overbought nor oversold. The STOCH value of 16.44 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:SWG.

Shearwater Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BGO	69 Neutral	£70.05M	-34.34	-10.50%	―	6.40%	70.78%
CNS	65 Neutral	£47.63M	-37.20	-9.83%	―	-5.43%	-292.31%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
SYS	51 Neutral	£12.13M	-5.66	-9.20%	―	-7.45%	78.23%
SWG	43 Neutral	£10.13M	-3.63	―	―	―	―
CLCO	41 Neutral	£1.17M	―	―	―	―	―

Shearwater Corporate Events

Shearwater Secures £8.4m Contract Renewal with Major Telco

Shearwater Group plc has announced a significant contract renewal worth approximately £8.4 million with a major telecommunications and media company, extending their partnership for an additional two years. This extension underscores Shearwater’s role as a trusted provider of cybersecurity and monitoring solutions, expected to contribute to substantial growth in revenue and Adjusted EBITDA for FY25, aligning with market expectations and reinforcing its industry standing.

Shearwater CFO Increases Stake in Company Shares

Shearwater Group PLC announced that its Chief Financial Officer, Jonathan Hall, has purchased 13,500 ordinary shares, representing a 0.06% stake in the company. This transaction highlights an internal vote of confidence in Shearwater’s market position and potential growth, possibly impacting investor perception positively.