Lendway (LDWY) AI Stock Analysis

• Market Cap: $7.34M
• Dividend Yield: N/A
• Average Volume (3M): 2.56K
• Price to Earnings (P/E): ―
• Beta (1Y): -0.05
• Revenue Growth: 95.23%
• EPS Growth: 34.97%
• Country: US
• Employees: 103
• Sector: Communication Services
• Sector Strength: 97
• Industry: Advertising Agencies
• EPS (TTM): -1.61
• Shares Outstanding: 1,769,599
• 10 Day Avg. Volume: 1,451
• 30 Day Avg. Volume: 2,557
• PEG Ratio: <0.01
• Price to Book (P/B): 0.87
• Price to Sales (P/S): 0.12
• P/FCF Ratio: -1.64
• Enterprise Value/Market Cap: 10.61
• Enterprise Value/Revenue: 1.66
• Enterprise Value/Gross Profit: 9.02
• Enterprise Value/Ebitda: 512.40
• 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: 40 Underperform
• Price Target: ―

Lendway faces substantial financial difficulties, with high leverage and inconsistent cash flow posing major risks. Technical indicators show some stability but no strong upward momentum. Valuation is weak due to negative earnings and lack of dividend yield. Overall, the stock is rated low, reflecting high financial risk and poor investor return prospects.

Positive Factors

Revenue Growth

Strong revenue growth indicates Lendway's products are gaining traction in the market, potentially leading to increased market share and future profitability.

Business Model Strength

A diversified revenue model with interest, fees, and partnerships helps Lendway mitigate risks and capitalize on multiple income streams, supporting long-term stability.

Market Position

Focusing on SMEs, Lendway taps into a niche market with high demand for lending solutions, providing a competitive edge and growth opportunities.

Negative Factors

High Leverage

High leverage and negative equity increase financial risk, limiting Lendway's ability to invest in growth and weather economic downturns.

Inconsistent Cash Flow

Erratic cash flow patterns hinder Lendway's ability to sustain operations and invest in strategic initiatives, posing long-term sustainability challenges.

Poor Profitability

Consistent losses and poor margins reflect operational inefficiencies, requiring strategic improvements to achieve profitability and enhance investor confidence.

Lendway Business Overview & Revenue Model

Company Description

Lendway, Inc. provides in-store advertising solutions to consumer-packaged goods manufacturers, retailers, shopper marketing agencies, and brokerages in the United States. It offers in-store signage solutions, which provides point-of-purchase services, brand equity signs, tear pads, and display marketing solutions; display solutions, such as a range of fully customized temporary, semi-permanent, and permanent displays; merchandising solutions; and on-pack solutions, which include BoxTalk, coupons, recipes, and cross-promotions. The company also operates a non-bank lending marketplace. The company was formerly known as Insignia Systems, Inc. and changed its name to Lendway, Inc. in August 2023. The company was incorporated in 1990 and is headquartered in Minneapolis, Minnesota.

How the Company Makes Money

Lendway generates revenue primarily through the interest charged on loans provided to SMEs. The company employs a digital platform to facilitate the loan application process, allowing for efficient underwriting and risk assessment, which enables competitive interest rates. Key revenue streams include origination fees, servicing fees, and interest income from the loans disbursed. Additionally, Lendway partners with financial institutions to offer co-branded lending solutions, expanding its reach and customer base while earning commission on loans facilitated through these partnerships.

Lendway Financial Statement Overview

Summary

Lendway is facing serious financial challenges. The income statement shows poor profitability despite some revenue growth. The balance sheet is heavily leveraged, with no equity in the latest year, increasing financial risk. Cash flow is inconsistent, with significant periods of negative cash flow, posing liquidity concerns. Strategic restructuring is essential to improve financial health and investor confidence.

Income Statement

Lendway's income statement reveals significant challenges. The company has struggled with consistent losses, evident from the negative net income and EBIT across multiple years, including the latest year. Revenue growth in 2024 was strong, but margins remain poor, with negative EBIT and EBITDA margins in the most recent year. This indicates operational inefficiencies and a need for strategic improvements.

Balance Sheet

The balance sheet exhibits high financial risk, with total debt significantly outweighing stockholders' equity in 2024, indicating a negative equity position. The debt-to-equity ratio is undefined due to zero equity, highlighting severe leverage issues. Over time, the equity has dwindled, raising concerns about the company's financial stability and ability to sustain operations.

Cash Flow

Cash flow analysis shows erratic patterns. Free cash flow has significantly decreased, and operating cash flow in 2024 was non-existent, pointing to liquidity issues. Although there was a positive free cash flow in 2022, the lack of consistent positive cash flow trends highlights sustainability challenges.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	46.97M	71.24M	0.00	0.00	19.50M	17.48M
Gross Profit	8.64M	18.56M	0.00	0.00	3.23M	2.86M
EBITDA	152.00K	11.25M	-3.51M	-2.38M	-3.40M	-4.30M
Net Income	-4.30M	2.99M	2.41M	10.05M	-3.53M	-4.62M
Balance Sheet
Total Assets	105.03M	99.98M	16.67M	20.97M	10.65M	14.29M
Cash, Cash Equivalents and Short-Term Investments	1.84M	1.76M	16.08M	14.44M	3.85M	7.13M
Total Debt	78.61M	75.55M	7.00K	0.00	184.00K	1.11M
Total Liabilities	93.51M	88.09M	1.14M	7.57M	7.46M	7.62M
Stockholders Equity	9.32M	9.84M	15.53M	13.40M	3.19M	6.67M
Cash Flow
Free Cash Flow	-4.20M	-5.22M	479.00K	10.66M	-3.11M	-1.64M
Operating Cash Flow	-3.40M	-4.05M	518.00K	10.66M	-3.00M	-1.58M
Investing Cash Flow	-791.00K	-35.15M	1.51M	-29.00K	-90.00K	139.00K
Financing Cash Flow	4.21M	24.88M	-473.00K	39.00K	-187.00K	1.06M

Lendway Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 3.60
• 50DMA: Negative
• 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 LDWY, the sentiment is Negative. The current price of 3.6 is below the 20-day moving average (MA) of 3.92, below the 50-day MA of 4.49, and below the 200-day MA of 4.56, indicating a bearish trend. The MACD of -0.25 indicates Negative momentum. The RSI at 42.71 is Neutral, neither overbought nor oversold. The STOCH value of 71.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LDWY.

Lendway Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
LDWY	40 Underperform	$7.34M	-2.86	―	―	95.23%	34.97%
TNMG	40 Underperform	$8.15M	-0.09	-164.27%	―	4.59%	-920.35%
DRCT	39 Underperform	$4.60M	―	―	―	-62.46%	-12.90%
CNET	38 Underperform	$5.37M	-1.06	-50.26%	―	-66.59%	67.63%
YDKG	25 Underperform	$9.92M	―	-113.86%	―	2482.80%	-169.59%