KLDiscovery (KLDI) AI Stock Analysis

• Market Cap: $4.35K
• Dividend Yield: N/A
• Average Volume (3M): 0.00
• Price to Earnings (P/E): ―
• Beta (1Y): -4.93
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: US
• Employees: 1,382
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): N/A
• Shares Outstanding: 43,516,390
• 10 Day Avg. Volume: 0
• 30 Day Avg. Volume: 0
• PEG Ratio: N/A
• 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

• Rating: 48 Neutral
• Price Target: ―

KLDiscovery's overall stock score of 48 reflects its revenue growth and improved operational margins, which are positive indicators. However, significant financial risks due to high leverage, negative net income, and weak cash flow generation weigh heavily on the score. The technical analysis suggests a bearish trend, and the valuation metrics imply potential overvaluation given the company's financial performance. These factors contribute to a cautious outlook on the stock.

KLDiscovery Business Overview & Revenue Model

Company Description

KLDiscovery Inc. provides eDiscovery, information governance, and data recovery solutions to corporations, law firms, government agencies, and individual consumers worldwide. The company offers eDiscovery solutions, including Nebula Ecosystem, an information governance and eDiscovery platform, which helps to facilitate the identification, preservation, collection, processing, review, and exchange of electronically stored information (ESI); eDiscovery.com Review, a platform used to search, review and exchange ESI; and Relativity, a document review tool. It also provides KLD Analytics, which offers technology-assisted review tools for predictive coding, workflow, email threading, near-duplicate detection, and language identification; KLD Processing, a processing platform; technology enabled managed review services; digital forensics services; and information archiving services. In addition, the company offers advisory services, such as eDiscovery readiness and response solutions, including eDiscovery expert witness, custodian interviews, preservation and collection strategy, and legal hold solution; information governance solutions comprising Office 365 health check and legal hold process improvement; and data privacy solutions, including privacy compliance assessment and data breach risk mitigation. Further, it provides data recovery services; email recovery services; tape services comprising backup infrastructure migration and consolidation, legacy tape and data remediation, and recovery from physically-damaged and quickly-erased or partially-overwritten tapes; and data destruction services. Additionally, the company provides data recovery software, such as Ontrack EasyRecovery and Ontrack PowerControls. KLDiscovery Inc. was founded in 1985 and is headquartered in McLean, Virginia.

How the Company Makes Money

KLDiscovery makes money primarily through its eDiscovery services and software solutions, which are utilized by law firms, corporations, and government agencies to manage and analyze data for legal and regulatory purposes. Revenue streams include fees for processing and hosting data, managed review services, and software licensing. The company also generates income from its data recovery and forensic investigation services, which involve recovering lost or corrupted data and conducting digital investigations. These services are often used by businesses to safeguard against data loss and support legal inquiries. KLDiscovery's revenue model is bolstered by strategic partnerships with technology providers and a global customer base, allowing it to leverage its expertise and infrastructure to provide tailored solutions across different industries.

KLDiscovery Financial Statement Overview

Summary

KLDiscovery is experiencing revenue growth and improving operational margins, signaling progress in its business model. However, financial risks are evident with high leverage, deteriorating equity, and persistent net losses. Cash flow generation is weak, highlighting challenges in supporting growth with internal funds. The company needs to focus on improving profitability and strengthening its balance sheet to enhance financial health.

Income Statement

KLDiscovery's revenue has shown a consistent growth trajectory, rising from $289.5M in 2020 to $345.8M in 2023. The gross profit margin improved to 50.3% in 2023, indicating efficient cost management. However, the company is still facing challenges with profitability, as reflected by a negative net income in recent years, although the margin has been narrowing. The EBIT and EBITDA margins have also improved, suggesting enhanced operational efficiency.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio, significantly increasing from 3.4 in 2020 to 137.8 in 2023, indicating high leverage. Stockholders' equity has deteriorated, posing a risk to financial stability. The equity ratio has drastically declined, suggesting a heavy reliance on debt financing. Return on Equity remains negative due to persistent net losses.

Cash Flow

Operating cash flow has decreased over the years, signaling potential challenges in generating cash from core operations. Free cash flow remains negative, although the margin has slightly improved. The ratio of operating cash flow to net income is low, indicating limited cash conversion efficiency, while free cash flow to net income is weak.

Breakdown	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Income Statement
Total Revenue	345.80M	317.43M	320.48M	289.55M	312.05M
Gross Profit	173.89M	151.98M	156.52M	141.81M	151.21M
EBITDA	62.61M	46.12M	27.43M	49.43M	45.49M
Net Income	-34.81M	-43.17M	-60.54M	-49.93M	-54.01M
Balance Sheet
Total Assets	605.59M	619.44M	636.40M	679.75M	714.91M
Cash, Cash Equivalents and Short-Term Investments	15.35M	32.63M	46.47M	51.20M	43.41M
Total Debt	560.62M	545.72M	510.71M	483.55M	480.62M
Total Liabilities	601.53M	585.75M	558.55M	537.52M	531.15M
Stockholders Equity	4.07M	33.69M	77.85M	142.22M	183.76M
Cash Flow
Free Cash Flow	-9.29M	-8.24M	-2.39M	28.84M	-21.57M
Operating Cash Flow	5.03M	7.95M	10.10M	39.78M	-8.30M
Investing Cash Flow	-17.34M	-16.19M	-12.49M	-14.06M	-15.22M
Financing Cash Flow	-5.28M	-4.98M	-1.76M	-18.59M	43.49M

KLDiscovery Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.02
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KLDI, the sentiment is Negative. The current price of 0.02 is equal to the 20-day moving average (MA) of 0.02, above the 50-day MA of 0.02, and below the 200-day MA of 0.02, indicating a neutral trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 38.15 is Neutral, neither overbought nor oversold. The STOCH value of 28.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for KLDI.

KLDiscovery Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NOW	78 Outperform	197.06B	119.25	15.19%	―	21.12%	43.91%
GDS	69 Neutral	7.71B	2,565.52	14.55%	―	7.29%	0.00%
EVLV	61 Neutral	1.45B	-15.39	-45.91%	―	35.63%	-335.37%
VERI	58 Neutral	269.21M	-1.61	-3009.11%	―	-31.11%	-52.32%
BLKB	53 Neutral	3.38B	-12.04	-317.65%	―	0.11%	-817.49%
KLDI	48 Neutral	$4.35K	―	-855.99%	―	―	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%