Intelligent Protection Management (IPM) AI Stock Analysis

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Intelligent Protection Management

(NASDAQ:IPM)

50Neutral

Paltalk faces significant financial challenges with declining revenues and profitability, negatively impacting its stock score. While strategic initiatives like the Newtek acquisition and positive legal outcomes offer potential upside, they are currently overshadowed by financial instability and valuation concerns. Overall, the stock scores moderately due to mixed prospects and ongoing risks.

Positive Factors

Analyst Confidence

Analyst upgrades IPM shares to Buy, reflecting confidence in business transformation and future growth potential.

Business Transformation

The acquisition of Newtek Technology Solutions and sale of non-profitable legacy assets shifts focus to attractive end markets such as outsourced IT hosting, cybersecurity, and disaster recovery.

Financial Health

The company had $12.1M in cash and no debt, with a potential patent infringement award settlement providing over $20M, enhancing capital and enterprise value estimates.

Negative Factors

Earnings Performance

Paltalk reported 3Q24 results with revenue down 23% y/y and an adjusted EBITDA loss of ($1.4M). Results missed expectations.

Patent Infringement Award

A jury awarded Paltalk $65.7M in a patent infringement case against Cisco, although net proceeds are not expected to exceed more than one-third of gross.

Intelligent Protection Management (IPM) vs. S&P 500 (SPY)

Market Cap

$15.98M

Dividend YieldN/A

Average Volume (3M)30.59K

Price to Earnings (P/E)―

Beta (1Y)0.82

Revenue Growth-13.06%

EPS Growth-151.73%

CountryUS

Employees55

SectorTechnology

Sector Strength40

IndustrySoftware - Application

Share Statistics

EPS (TTM)-0.35

Shares Outstanding9,236,987

10 Day Avg. Volume35,888

30 Day Avg. Volume30,594

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)1.74

Price to Cash Flow (P/CF)-5.40

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$6.00

Price Target Upside246.82% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering1

Intelligent Protection Management Business Overview & Revenue Model

Company DescriptionPaltalk, Inc. is a technology company that specializes in developing and operating video-based social networking applications. Catering to a global audience, Paltalk provides platforms for users to engage in live video chats, participate in virtual rooms, and interact with communities. The company's core products include applications like Paltalk and Camfrog, which are designed to facilitate real-time, video-enabled social interactions across various devices.

How the Company Makes MoneyPaltalk, Inc. generates revenue primarily through a freemium model, offering basic services for free while charging for premium features. Users can purchase virtual gifts and premium memberships that provide enhanced functionality and ad-free experiences. The company also earns money through advertising, leveraging its user base to attract advertisers interested in targeting specific demographics. Additionally, Paltalk may engage in strategic partnerships that contribute to its revenue streams, although specific details about such partnerships are null.

Intelligent Protection Management Financial Statement Overview

Summary

Paltalk is facing financial difficulties with declining revenues and profitability, as evidenced by a negative net income margin of -33.41% TTM and a 12.26% revenue contraction. Despite a strong gross margin and a solid balance sheet with low leverage, negative cash flow and net income pose significant challenges.

Income Statement

Neutral

Paltalk's income statement reveals declining profitability with negative net income and EBIT margins. Gross profit margin remains relatively strong at 62.27% TTM, but the company faces significant challenges with a negative net profit margin of -33.41% TTM and negative revenue growth. Revenue contracted by 12.26% from the previous year, indicating a downward trend.

Balance Sheet

Neutral

The balance sheet shows a solid equity position with a debt-to-equity ratio of 0.01, indicating low financial leverage. However, the return on equity is negative, reflecting the company's struggle to generate profit from shareholders' equity. The equity ratio is robust at 80.11%, suggesting financial stability, yet the negative net income undermines overall performance.

Cash Flow

Negative

Cash flow analysis indicates a negative operating and free cash flow, which raises concerns about liquidity management. The negative free cash flow to net income ratio and declining operating cash flow highlight potential cash management issues. No significant free cash flow growth is observed, further emphasizing the challenge in generating positive cash flow.

TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Breakdown
Income Statement		Total Revenue
9.64M	10.98M	10.99M	13.27M	12.83M	15.28M
	Gross Profit
6.00M	7.74M	8.17M	10.55M	10.26M	12.11M
	EBIT
-4.12M	-2.07M	-3.65M	1.24M	992.70K	5.53M
	EBITDA
-3.46M	-1.17M	-2.83M	1.73M	1.92M	-1.25M
	Net Income Common Stockholders
-3.22M	-1.07M	-3.41M	1.32M	1.37M	-8.94M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
20.40M	13.57M	14.74M	21.64M	5.59M	3.43M
	Total Assets
27.55M	23.89M	25.43M	28.88M	13.59M	12.22M
	Total Debt
219.59K	77.00K	159.18K	239.49K	575.47K	761.55K
	Net Debt
-20.18M	-13.49M	-14.58M	-21.40M	-5.01M	-2.67M
	Total Liabilities
3.08M	3.75M	25.43M	3.83M	3.75M	4.03M
	Stockholders Equity
24.46M	20.13M	1.19M	25.05M	9.84M	8.19M
Cash Flow		Free Cash Flow
-1.65M	-1.08M	-2.96M	1.27M	1.44M	-4.86M
	Operating Cash Flow
-1.65M	-1.08M	-2.96M	1.27M	1.44M	-4.47M
	Investing Cash Flow
-85.00B	-85.00K	-2.94M	858.85K	225.41K	1.34M
	Financing Cash Flow
-7.21B	-7.21K	-997.92K	13.93M	497.66K	-2.02K

Intelligent Protection Management Technical Analysis

Technical Analysis Sentiment

Negative

Last Price1.73

Price Trends

50DMA

1.94

Negative

100DMA

1.91

Negative

200DMA

2.66

Negative

Market Momentum

MACD

-0.05

Positive

RSI

37.83

Neutral

STOCH

14.22

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IPM, the sentiment is Negative. The current price of 1.73 is below the 20-day moving average (MA) of 1.84, below the 50-day MA of 1.94, and below the 200-day MA of 2.66, indicating a bearish trend. The MACD of -0.05 indicates Positive momentum. The RSI at 37.83 is Neutral, neither overbought nor oversold. The STOCH value of 14.22 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IPM.

Intelligent Protection Management Risk Analysis

Intelligent Protection Management disclosed 45 risk factors in its most recent earnings report. Intelligent Protection Management reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Intelligent Protection Management Peers Comparison

Overall Rating

UnderperformOutperform

Sector (57)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TME	80 Outperform	$20.90B	21.12	10.75%	1.11%	0.63%	34.09%
BIDU	76 Outperform	$28.08B	8.79	9.14%	―	-2.60%	16.71%
TWLO	63 Neutral	$14.04B	―	-1.24%	―	7.32%	88.51%
Sector *	57 Neutral	$20.31B	10.03	-14.49%	2.79%	5.15%	-23.76%
IPM	50 Neutral	$15.98M	―	-17.07%	―	-13.06%	-151.73%

* Technology Sector Average

Performance Comparison

IPM

Intelligent Protection Management

1.73

-2.29

-56.97%

BIDU

Baidu

80.59

-21.73

-21.24%

TWLO

Twilio

91.98

30.65

49.98%

TME

Tencent Music Entertainment Group

12.64

0.99

8.50%

Intelligent Protection Management Earnings Call Summary

Earnings Call Date: Mar 24, 2025 | % Change Since: -11.28% | Next Earnings Date: May 13, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted the successful transition into the cloud infrastructure and cybersecurity sectors and a significant legal victory, indicating strong growth potential. However, these positives were offset by substantial net losses, decreased revenue from discontinued operations, and increased expenses, leading to a balanced view of the company's current situation.

Highlights

Acquisition and Strategic Transition

Successfully completed the acquisition of Newtek Technology Solutions and transitioned into the cloud infrastructure and cybersecurity sectors, which is expected to have a meaningful impact on revenue and provide growth opportunities.

Patent Infringement Lawsuit Success

Won a $65.7 million jury verdict in a patent infringement lawsuit against Cisco Systems, Inc., although final proceeds are subject to deductions and potential appeals.

Revenue Growth from Continuing Operations

Revenue from continuing operations increased by 14% for the year ended December 31, 2024, driven by increased sales from ManyCam.

Strong Cash Position

The company reported having $10.6 million in cash with no long-term debt as of December 31, 2024.

Lowlights

Significant Increase in Net Loss

Net loss increased by 1,840% to $5.5 million for the quarter and by 690% to $8.4 million for the year, primarily due to increased professional fees and a one-time impairment loss.

Revenue Decline from Discontinued Operations

Revenue from discontinued operations decreased by 21% for the quarter and 17% for the year, mainly due to declines in subscription and virtual gift revenue.

Increased Adjusted EBITDA Loss

Adjusted EBITDA loss increased by 594% to $1.5 million for the quarter and by 338% to $4.4 million for the year.

Company Guidance

During the Intelligent Protection Management Corporation's Q4 2024 results conference call, the company provided guidance on its strategic transition into the cloud infrastructure and cybersecurity sectors following its acquisition of Newtek Technology Solutions. The CEO, Jason Katz, expressed enthusiasm about growth opportunities in these sectors, highlighting the potential for mergers and acquisitions to scale operations further. He noted that the company expects significant revenue and growth opportunities from these transformational transactions. The CFO, Kara Jenny, detailed financial metrics, including a 9.1% increase in revenue from continuing operations to $0.3 million for Q4 2024, notwithstanding a net loss from continuing operations that increased by 142% to $1.4 million. The company also reported an adjusted EBITDA loss of $1.5 million, a substantial increase from the previous year. Additionally, IPM's cash reserves stood at $10.6 million with no long-term debt as of December 31, 2024. The company emphasized its continued focus on defending its intellectual property and leveraging its relationship with NewtekOne to expand its customer base.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.