Mer (CMER) AI Stock Analysis

• Market Cap: ₪598.22M
• Dividend Yield: N/A
• Average Volume (3M): 4.55K
• Price to Earnings (P/E): 15.3
• Beta (1Y): 0.77
• Revenue Growth: -1.73%
• EPS Growth: 28.58%
• Country: IL
• Employees: 654
• Sector: Industrials
• Sector Strength: 72
• Industry: Communication Equipment
• EPS (TTM): N/A
• Shares Outstanding: 13,335,242
• 10 Day Avg. Volume: 3,934
• 30 Day Avg. Volume: 4,554
• PEG Ratio: 0.10
• Price to Book (P/B): 3.21
• Price to Sales (P/S): 0.59
• P/FCF Ratio: 11.03
• 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: 76 Outperform
• Price Target: 5,017.00 ▲(44.79% Upside)

The score is driven primarily by strong financial performance (rapid growth, improving margins, and solid free cash flow) and supported by a generally reasonable P/E. The main offset is technical risk from overextended momentum signals (high RSI/Stoch), which can increase near-term volatility despite the broader uptrend.

Positive Factors

Strong recent revenue growth

A 92.4% TTM revenue surge indicates meaningful commercial traction and project wins in its end markets. Sustained high growth can expand scale, improve supplier terms and unit economics, and build a larger recurring installation and service backlog over months to years.

Improving profitability and margins

Improved gross and net margins reflect operational efficiencies and better project mix. Durable margin expansion enhances free cash generation, funds reinvestment in R&D and deployments, and provides a buffer versus commodity or input cost swings in the renewable sector.

Robust free cash flow generation

A 71.8% rise in FCF and a 73% FCF/NI ratio indicate strong cash conversion of profits. Reliable cash flow supports capex for projects, reduces reliance on external financing for deployments, and enables debt reduction or strategic investments over the medium term.

Negative Factors

Equity ratio remains a stability risk

A flagged low equity ratio signals limited capital buffer relative to assets. In a capital-intensive renewables business, this increases vulnerability to project delays or cost overruns, could constrain access to low-cost financing, and raises solvency risk in downturns.

Material but reduced leverage

Although debt has been cut materially, a D/E around 1.1 remains significant for a project-heavy company. Continued reliance on debt can pressure interest coverage and flexibility, especially if project cash flows are lumpy or interest rates rise over the next several quarters.

Mixed revenue-growth signals / volatility

A negative reported fundamentals growth metric versus a very strong TTM surge implies volatile revenue patterns or differing measurement windows. Such volatility complicates project planning, forecasting and resource allocation, increasing execution and working capital risk.

Mer Business Overview & Revenue Model

Company Description

C. Mer Industries Ltd. engages in the consults, engineers, develops, manufactures, integrates, and implements technology based solutions and end-to-end services in Israel, Latin America, the United States, Africa, the United Kingdom, and Asia. The company offers solutions in the areas of homeland security, construction and management of safe and smart cities / facilities (IoT), emergency response management, cyber and intelligence, communication infrastructure, first responders and public safety communication, mobile platforms, and tactical defense communication, as well as COVID-19 solutions. It also provides professional services, such as risk assessment, consulting, manpower vetting, training, ongoing maintenance, and design and construction services for communications and security projects. The company serves customers in telecom, governmental, municipal institution, critical infrastructure, police and first responder, financial institution, border authority, defense, prison, aviation, maritime and public transportation, and intelligence agency industries. C. Mer Industries Ltd. was founded in 1948 and is headquartered in Holon, Israel.

How the Company Makes Money

Mer generates revenue primarily through the sale and installation of renewable energy systems, including solar panels and wind turbines. The company also earns significant income from energy storage solutions, which are increasingly in demand as customers seek to optimize their energy consumption and reduce reliance on traditional energy sources. Additionally, Mer has formed strategic partnerships with local governments and private enterprises to provide energy consulting services, further diversifying its revenue streams. These collaborations often lead to long-term contracts and project financing, which provide a steady income flow. Furthermore, the company benefits from incentives and rebates related to renewable energy initiatives, enhancing its profitability.

Mer Financial Statement Overview

Summary

Strong fundamentals driven by sharp TTM revenue growth (+92.4%), improved profitability (TTM gross margin 19.2%, net margin 5.6%), and solid cash generation (TTM free cash flow +71.8%, FCF/NI 73%). Balance sheet has improved with lower leverage (debt-to-equity down to 1.14) and higher ROE (29.3%), but the equity ratio remains a stability risk.

Income Statement

Mer has demonstrated strong revenue growth, particularly in the TTM period, with a significant increase of 92.4%. The company has improved its gross profit margin to 19.2% and net profit margin to 5.6% in the TTM, indicating enhanced profitability. EBIT and EBITDA margins have also shown positive trends, reflecting operational efficiency improvements.

Balance Sheet

The company has reduced its debt-to-equity ratio from 2.84 in 2020 to 1.14 in the TTM, indicating better financial leverage management. Return on equity has improved significantly to 29.3% in the TTM, showcasing strong profitability. However, the equity ratio remains a concern, suggesting potential risks in financial stability.

Cash Flow

Mer's free cash flow growth has been impressive, with a 71.8% increase in the TTM. The operating cash flow to net income ratio is stable, and the free cash flow to net income ratio is healthy at 73%. These metrics indicate strong cash flow management, although the operating cash flow coverage ratio could be improved.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	653.49M	663.70M	646.15M	513.26M	435.19M	375.25M
Gross Profit	129.36M	118.67M	100.73M	76.85M	70.16M	45.13M
EBITDA	78.02M	77.53M	60.07M	32.61M	39.84M	14.18M
Net Income	38.11M	34.43M	16.28M	-5.64M	2.60M	-28.62M
Balance Sheet
Total Assets	506.04M	523.77M	473.88M	444.46M	410.50M	444.58M
Cash, Cash Equivalents and Short-Term Investments	35.45M	52.53M	43.28M	44.88M	20.21M	21.96M
Total Debt	134.38M	170.57M	216.97M	193.26M	201.82M	236.19M
Total Liabilities	358.58M	402.58M	379.49M	367.70M	329.67M	361.42M
Stockholders Equity	147.46M	121.19M	94.40M	76.76M	80.83M	83.16M
Cash Flow
Free Cash Flow	46.43M	35.26M	24.57M	49.55M	37.99M	1.97M
Operating Cash Flow	56.21M	45.52M	31.58M	53.96M	42.36M	4.45M
Investing Cash Flow	-9.23M	-9.92M	-6.52M	-3.97M	-2.93M	3.46M
Financing Cash Flow	-47.42M	-24.32M	-26.68M	-25.94M	-40.70M	-18.56M

Mer Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3465.00
• 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 IL:CMER, the sentiment is Positive. The current price of 3465 is below the 20-day moving average (MA) of 4286.00, below the 50-day MA of 3621.18, and above the 200-day MA of 3196.24, indicating a bullish trend. The MACD of 259.01 indicates Positive momentum. The RSI at 72.22 is Negative, neither overbought nor oversold. The STOCH value of 70.12 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IL:CMER.

Mer Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CMER	76 Outperform	₪598.22M	15.35	―	―	-1.73%	28.58%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
AVGL	43 Neutral	₪385.02M	-27.30	―	―	4.79%	-789.71%