Homebiogas (HMGS) AI Stock Analysis

• Market Cap: ₪17.48M
• Dividend Yield: N/A
• Average Volume (3M): 182.00K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.56
• Revenue Growth: -4.02%
• EPS Growth: 44.85%
• Country: IL
• Employees: 69
• Sector: Energy
• Sector Strength: 52
• Industry: Renewable Utilities
• EPS (TTM): -10.10
• Shares Outstanding: 28,336,428
• 10 Day Avg. Volume: 222,381
• 30 Day Avg. Volume: 182,002
• PEG Ratio: 0.04
• Price to Book (P/B): 3.96
• Price to Sales (P/S): 3.54
• P/FCF Ratio: -4.54
• 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: 44 Neutral
• Price Target: 60.00 ▼(-56.01% Downside)
• Action: Upgraded Date: 03/13/26
• Date: Action: Upgraded 03/13/26

The score is held down primarily by weak financial performance—large ongoing losses, sustained cash burn, and significant equity erosion—despite improving revenue and gross margin. Technicals add further pressure given a clear downtrend (below key moving averages with negative MACD), while valuation is constrained by negative earnings and no dividend yield data.

Positive Factors

Revenue Growth Trend

Sustained year‑over‑year revenue growth off the small base indicates rising product adoption and distribution traction across target end markets. If this trend persists, it supports scaling fixed costs and creates a clearer path to operational leverage and eventual breakeven.

Improving Gross Margin

A large, durable improvement in gross margin points to better unit economics—through pricing, lower component costs, or production efficiencies. Stronger gross margins are a structural enabler for profitability as revenue scales and reduce the sales volume required to cover fixed operating expenses.

Low Leverage / Balance Sheet Flexibility

Very low debt levels limit interest burden and preserve borrowing capacity, providing flexibility to finance growth initiatives, inventory, or project deployments without immediate cash flow pressure. This structural liquidity buffer aids resilience during scaling.

Negative Factors

Persistent Cash Burn

Consistent negative operating and free cash flow signals the business currently consumes cash to run and grow. Over the medium term this necessitates external financing or dilution; without continued improvement in cash conversion, runway and independent solvency remain structural risks.

Severe Equity Erosion & Negative ROE

Large cumulative losses that have sharply reduced shareholder equity and produced deeply negative ROE weaken the company’s loss-absorption capacity. This durable deterioration raises the likelihood of future dilution, constrains strategic options, and undermines investor confidence.

One‑time Hardware Revenue Mix

A business model concentrated on one‑time hardware sales without disclosed recurring service or subscription streams limits predictable, repeatable cash flow. This structural revenue profile makes long-term margin expansion and valuation stability harder absent new recurring offerings.

Homebiogas Business Overview & Revenue Model

Company Description

HomeBiogas LTD develops, produces, and markets biogas systems for treatment of organic waste into clean energy for households, farmers, businesses, and communities worldwide. The company offers HomeBiogas 2, a biogas system that recycles food scraps into free clean cooking gas and fertilizers, as well as creates renewable energy; HomeBiogas 4, recycles organic waste into renewable energy; and HomeBiogas 7, which converts manure into renewable energy and liquid fertilizers. It also provides additional products, such as countertop biogas stoves, maintenance kits, sink covers, built-in biogas stoves, filter kits, probiotic tablets, bio-toilet kits, and gas bags. The company also operates an online shop for its products. HomeBiogas LTD was incorporated in 2012 and is headquartered in Beit Yanai, Israel.

How the Company Makes Money

HomeBiogas primarily makes money by selling physical systems that generate biogas from organic waste, along with related add-ons and replacement components. Key revenue streams include: (1) direct sales of HomeBiogas digesters (core hardware units) to end customers; (2) sales of complementary products and accessories used with or around the systems (e.g., cooking-related components and system accessories); and (3) sales via distribution channels such as retailers, distributors, and project-based sales into institutional or humanitarian deployments where units are purchased in batches. Information on recurring revenue (e.g., subscriptions, service contracts), licensing, carbon-credit/offset monetization, or specific named partnerships and their financial contribution is null.

Homebiogas Financial Statement Overview

Summary

Revenue growth and a materially higher gross margin in 2025 are positives, but the company remains far from breakeven with very large operating/net losses (net margin about -132%) and persistent negative operating/free cash flow. Low leverage helps, yet equity has eroded sharply and ROE is deeply negative, raising sustainability risk.

Income Statement

Revenue has grown off a small base (2025 annual revenue up ~19% vs 2024), and gross margin improved meaningfully in 2025 (~29% vs ~15% in 2024). However, profitability remains very weak: the company is still generating large operating losses and net losses (2025 net margin roughly -132%), indicating operating costs remain far above the current revenue scale. Overall, the trajectory is improving at the gross profit level, but the business is still far from breakeven.

Balance Sheet

Leverage is modest, with low debt relative to equity (debt-to-equity ~0.14 in 2025), which provides balance sheet flexibility. The key weakness is ongoing value erosion from heavy losses: return on equity is deeply negative (about -148% in 2025), and equity has declined substantially over time (from ~28.1M in 2021 to ~2.8M in 2025), reducing the cushion available to absorb continued losses.

Cash Flow

Cash generation remains a major concern: operating cash flow and free cash flow are negative across all years shown, including 2025 (operating cash flow about -2.4M; free cash flow about -2.4M). The burn rate improved versus 2024, and free cash flow improved strongly year over year, but cash flow still does not cover the company’s losses and indicates continued dependence on external funding if the trend does not continue.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	3.13M	2.63M	4.83M	4.70M	2.48M
Gross Profit	899.53K	384.00K	1.55M	1.34M	234.00K
EBITDA	―	-8.23M	-9.91M	-14.00M	-7.64M
Net Income	-4.14M	-9.42M	-11.34M	-15.16M	-8.31M
Balance Sheet
Total Assets	5.23M	8.21M	19.43M	19.62M	33.58M
Cash, Cash Equivalents and Short-Term Investments	1.95M	2.84M	9.14M	11.20M	26.05M
Total Debt	391.08K	470.00K	1.95M	1.64M	1.99M
Total Liabilities	2.16M	3.23M	5.39M	5.23M	5.49M
Stockholders Equity	2.79M	4.93M	14.04M	14.39M	28.09M
Cash Flow
Free Cash Flow	-2.44M	-5.54M	-11.13M	-12.77M	-10.72M
Operating Cash Flow	-2.43M	-4.51M	-10.58M	-11.57M	-8.33M
Investing Cash Flow	169.95K	-847.00K	-571.00K	-1.13M	-2.49M
Financing Cash Flow	1.02M	-639.00K	9.28M	-419.00K	28.77M

Homebiogas Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 136.40
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Positive
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IL:HMGS, the sentiment is Negative. The current price of 136.4 is above the 20-day moving average (MA) of 76.23, above the 50-day MA of 104.58, and above the 200-day MA of 128.36, indicating a bearish trend. The MACD of -12.33 indicates Negative momentum. The RSI at 24.20 is Positive, neither overbought nor oversold. The STOCH value of 34.02 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IL:HMGS.

Homebiogas Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%
TOEN	59 Neutral	₪480.02M	39.23	―	5.36%	―	―
HMGS	44 Neutral	₪17.48M	-3.10	―	―	-4.02%	44.85%