SECO S.p.A. (IOT) AI Stock Analysis

• Market Cap: €409.57M
• Dividend Yield: N/A
• Average Volume (3M): 297.44K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.78
• Revenue Growth: 1.84%
• EPS Growth: -15.49%
• Country: US
• Employees: 784
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 0.02
• Shares Outstanding: 132,976,120
• 10 Day Avg. Volume: 264,927
• 30 Day Avg. Volume: 297,441
• PEG Ratio: 0.04
• Price to Book (P/B): 0.89
• Price to Sales (P/S): 1.31
• P/FCF Ratio: 16.70
• 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: €3.60
• Price Target Upside: 15.76% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 58 Neutral
• Price Target: €3.00 ▼(-3.54% Downside)

The score is held back primarily by weak financial performance—negative profitability and declining free cash flow—despite improved leverage. Technical indicators are supportive with a modestly bullish trend, but valuation is unattractive/unclear due to negative earnings and no dividend information.

Positive Factors

Diversified end-markets & product suite

SECO's broad product portfolio (SoMs, SBCs, edge devices) and multi-industry end-market exposure reduce revenue cyclicality and concentration risk. Combined hardware, software and services plus strategic partnerships support recurring revenue and customer stickiness, durable over months.

High gross margin

A ~48% gross margin provides structural pricing power and operational efficiency in embedded computing. This margin cushion helps absorb operating expenses, funds R&D and product development, and supports long-term competitiveness even while operating profits are currently negative.

Improved leverage and balance sheet stability

Reduced leverage (debt/equity ~0.42) enhances financial flexibility and lowers interest burden, giving SECO capacity to invest in product roadmap or weather demand volatility. Improved balance sheet metrics materially support longer-term strategic optionality.

Negative Factors

Negative profitability

Persistent negative operating and net margins indicate core profitability issues: revenues are not translating to sustainable profits. Over months this undermines retained earnings, hampers reinvestment for growth, and forces management to prioritize cost or pricing fixes to restore viability.

Weak and declining free cash flow

Declining FCF and sub-1 cash conversion ratios reduce internal funding for capex, R&D and services. Over a multi-month horizon this increases reliance on external financing, constrains strategic investments and heightens liquidity risk if margins don't improve.

Weak returns and margin erosion

Negative ROE and falling EBITDA margins signal the business is not generating adequate returns on capital. This long-term structural weakness can deter capital allocation, limit expansion, and require sustained operational improvements to restore investor confidence and fund growth.

SECO S.p.A. Business Overview & Revenue Model

Company Description

Seco S.p.A. develops embedded micro-computers, integrated systems, and IoT solutions. The company offers modules, single board computers, boxed solutions, HMI solutions, carrier boards, starter kits, and accessories, as well as custom hardware and software solutions, and system integration. Its products are used in various applications, including transportation, industrial automation, medical, vending, digital signage, building automation/domotics, aerospace, defense, securities/surveillance, utilities, and devices. The company was founded in 1979 and is headquartered in Arezzo, Italy.

How the Company Makes Money

SECO S.p.A. generates revenue primarily through the sale of its embedded computing products, including SoMs and SBCs, which are sold to manufacturers and system integrators across multiple industries. Additionally, the company offers software solutions and services that complement its hardware offerings, providing customers with integrated IoT solutions. Key revenue streams include direct product sales, recurring revenue from software licenses, and service agreements. Strategic partnerships with technology firms and industry leaders further enhance SECO's market reach and product offerings, contributing to its overall earnings. The company may also benefit from ongoing trends in digital transformation and smart technologies, driving sustained demand for its IoT solutions.

SECO S.p.A. Financial Statement Overview

Summary

Mixed fundamentals: slight TTM revenue growth (1.53%) and a strong gross margin (48.30%), but profitability is a key weakness with negative net margin (-8.26%) and negative EBIT margin (-3.38%). Balance sheet leverage has improved (debt-to-equity 0.42), yet returns remain weak (ROE -5.64%). Cash flow is pressured with declining free cash flow growth (-8.73%).

Income Statement

SECO S.p.A. shows a mixed performance in its income statement. The TTM data indicates a slight revenue growth of 1.53%, but the company is struggling with profitability, as evidenced by a negative net profit margin of -8.26% and a negative EBIT margin of -3.38%. The gross profit margin remains healthy at 48.30%, suggesting efficient production processes. However, the declining EBITDA margin from previous years indicates potential operational challenges.

Balance Sheet

The balance sheet of SECO S.p.A. reflects moderate financial stability. The debt-to-equity ratio has improved to 0.42, indicating a reduction in leverage compared to previous years. However, the return on equity remains negative at -5.64%, highlighting challenges in generating returns for shareholders. The equity ratio is stable, suggesting a balanced asset structure.

Cash Flow

Cash flow analysis reveals some concerns for SECO S.p.A. The free cash flow growth rate is negative at -8.73%, indicating a decline in cash generation. The operating cash flow to net income ratio is 0.51, suggesting moderate efficiency in converting income into cash. The free cash flow to net income ratio is 0.59, reflecting some ability to generate cash relative to net income, but overall cash flow performance is weak.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	191.08M	184.40M	210.04M	202.46M	113.66M	79.50M
Gross Profit	86.24M	93.52M	55.38M	77.51M	41.70M	32.70M
EBITDA	29.60M	20.72M	48.62M	39.66M	16.35M	12.12M
Net Income	-9.08M	-21.03M	11.86M	11.04M	4.15M	4.04M
Balance Sheet
Total Assets	490.33M	490.93M	538.50M	495.23M	403.50M	118.37M
Cash, Cash Equivalents and Short-Term Investments	59.30M	72.58M	74.82M	39.59M	58.83M	23.68M
Total Debt	119.84M	125.08M	139.90M	168.39M	168.30M	41.52M
Total Liabilities	192.98M	199.20M	226.00M	258.68M	240.50M	67.40M
Stockholders Equity	276.32M	271.91M	290.62M	215.78M	145.40M	43.83M
Cash Flow
Free Cash Flow	17.99M	14.41M	5.98M	-11.51M	-40.00K	1.47M
Operating Cash Flow	30.48M	34.89M	25.69M	6.76M	13.61M	10.21M
Investing Cash Flow	-19.32M	-20.20M	-19.99M	-18.42M	-143.81M	-13.47M
Financing Cash Flow	-18.95M	-18.13M	30.73M	-7.06M	164.72M	10.77M

SECO S.p.A. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3.11
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IT:IOT, the sentiment is Positive. The current price of 3.11 is above the 20-day moving average (MA) of 3.01, above the 50-day MA of 2.90, and above the 200-day MA of 2.70, indicating a bullish trend. The MACD of 0.05 indicates Negative momentum. The RSI at 55.22 is Neutral, neither overbought nor oversold. The STOCH value of 55.76 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IT:IOT.

SECO S.p.A. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TPRO	67 Neutral	€10.39B	143.58	―	―	38.31%	-30.40%
TXT	67 Neutral	€342.30M	20.11	12.61%	0.80%	28.77%	-3.40%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
TNXT	61 Neutral	€692.05M	-154.51	-1.19%	2.02%	14.90%	-123.79%
IOT	58 Neutral	€409.57M	-45.34	-3.24%	―	1.84%	-15.49%
WIIT	57 Neutral	€686.70M	75.45	25.60%	1.54%	13.74%	-23.30%