Neonode (NEON) AI Stock Analysis

• Market Cap: $31.89M
• Dividend Yield: N/A
• Average Volume (3M): 1.44M
• Price to Earnings (P/E): 3.5
• Beta (1Y): 1.54
• Revenue Growth: -48.54%
• EPS Growth: N/A
• Country: US
• Employees: 40
• Sector: Technology
• Sector Strength: 88
• Industry: Hardware, Equipment & Parts
• EPS (TTM): 0.83
• Shares Outstanding: 16,782,923
• 10 Day Avg. Volume: 497,098
• 30 Day Avg. Volume: 1,436,721
• PEG Ratio: 0.53
• Price to Book (P/B): 7.95
• Price to Sales (P/S): 42.03
• P/FCF Ratio: -23.21
• Enterprise Value/Market Cap: 13.02
• Enterprise Value/Revenue: 188.99
• Enterprise Value/Gross Profit: 195.76
• Enterprise Value/Ebitda: 49.44
• 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: 56 Neutral
• Price Target: $2.00 ▲(5.26% Upside)

The score is primarily supported by an improved TTM profit profile and a strong, low-debt balance sheet, but it is capped by persistent cash burn and contracting revenue. Technicals are bearish (below major moving averages with negative MACD), while a low P/E provides some offset on valuation.

Positive Factors

Low Debt Levels

Neonode's low debt levels provide a cushion against financial instability, allowing more flexibility in managing operations and pursuing growth opportunities.

Innovative Technology

Neonode's focus on innovative touch and gesture technologies positions it well to capitalize on growing demand for advanced human-machine interfaces, particularly in automotive and electronics.

Strategic Partnerships

Strategic partnerships in automotive and electronics sectors provide stable revenue streams and potential for expanding market reach, supporting long-term growth.

Negative Factors

Declining Revenues

Declining revenues indicate potential loss of market share or demand, which could hinder long-term growth and profitability if not addressed.

Negative Cash Flow

Consistently negative cash flow suggests operational inefficiencies and reliance on external funding, which could impact financial stability and growth prospects.

Operational Inefficiencies

Operational inefficiencies, reflected in negative profitability metrics, could limit Neonode's ability to invest in growth and innovation, affecting long-term competitiveness.

Neonode Business Overview & Revenue Model

Company Description

Neonode Inc., together with its subsidiaries, develops optical sensing solutions for contactless touch, touch, and gesture sensing in the United States, Japan, South Korea, China, and internationally. It also offers software solutions for scene analysis using advanced machine learning algorithms to detect and track persons and objects in video streams for cameras and other types of imagers. In addition, the company licenses its technology to original equipment manufacturers (OEMs) and Tier 1 suppliers. Further, it provides embedded sensors modules to OEMs, original design manufacturers, and systems integrators; and engineering consulting services. Additionally, the company sells Neonode branded sensor products, such as AirBar products through distributors. It serves office equipment, automotive, industrial automation, medical, military, and avionics markets. Neonode Inc. was incorporated in 1997 and is headquartered in Stockholm, Sweden.

How the Company Makes Money

Neonode generates revenue primarily through licensing its proprietary zForce technology to manufacturers and developers in various sectors. The company earns money by charging licensing fees for the integration of its touch and gesture technology into third-party products, allowing partners to enhance their devices with intuitive user interfaces. Additionally, Neonode may have significant revenue streams from partnerships and collaborations with major companies in the automotive and electronics industries, where they provide their technology for use in vehicles and consumer products. The company also explores opportunities for direct sales of its technology and services to end-users in specific markets, further contributing to its earnings.

Neonode Financial Statement Overview

Summary

Neonode's financial performance is challenged by declining revenues, inconsistent gross profit margins, and negative EBIT and net profit margins. The balance sheet shows some stability with a low debt-to-equity ratio, but decreasing stockholders' equity and total assets are concerning. Persistent negative cash flow indicates potential liquidity issues and reliance on external funding.

Income Statement

Neonode's income statement reveals significant challenges. The company has experienced declining revenues with a notable drop from 2023 to 2024. Gross profit margins are positive but have been inconsistent, with a sharp decline in 2023. The company struggles with profitability, evidenced by negative EBIT and net profit margins, indicating operational inefficiencies and high expenses relative to revenue.

Balance Sheet

The balance sheet reflects some financial stability, with equity outweighing debt, resulting in a low debt-to-equity ratio. However, stockholders' equity has been decreasing over the years. The equity ratio is relatively healthy, but the company's total assets have been on a downward trend, which could impact future financial flexibility.

Cash Flow

Cash flow analysis shows persistent negative free cash flow, indicating potential liquidity issues. Operating cash flow is consistently negative, and the free cash flow to net income ratio is unfavorable. Financing activities have been crucial in maintaining cash levels, suggesting reliance on external funding to support operations.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.20M	3.11M	3.83M	5.67M	5.84M	5.98M
Gross Profit	2.12M	2.99M	3.82M	4.87M	4.88M	4.91M
EBITDA	8.40M	-6.41M	-5.58M	-4.77M	-5.97M	-5.02M
Net Income	8.98M	-6.47M	-10.12M	-4.88M	-6.45M	-5.61M
Balance Sheet
Total Assets	32.82M	18.38M	19.01M	21.20M	22.99M	16.57M
Cash, Cash Equivalents and Short-Term Investments	11.59M	16.43M	16.16M	14.82M	17.38M	10.47M
Total Debt	394.00K	546.00K	10.00K	259.00K	865.00K	1.75M
Total Liabilities	6.02M	1.94M	1.85M	1.78M	3.15M	4.68M
Stockholders Equity	26.80M	16.44M	17.16M	19.42M	23.88M	15.11M
Cash Flow
Free Cash Flow	-5.89M	-5.63M	-6.43M	-6.86M	-7.75M	-5.81M
Operating Cash Flow	-5.80M	-5.59M	-6.31M	-6.81M	-7.68M	-5.75M
Investing Cash Flow	-91.00K	152.00K	-123.00K	-52.00K	-67.00K	-58.00K
Financing Cash Flow	-10.00K	5.78M	7.78M	4.51M	14.57M	13.61M

Neonode Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1.90
• 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 NEON, the sentiment is Negative. The current price of 1.9 is below the 20-day moving average (MA) of 1.91, below the 50-day MA of 2.10, and below the 200-day MA of 10.51, indicating a bearish trend. The MACD of -0.10 indicates Negative momentum. The RSI at 39.29 is Neutral, neither overbought nor oversold. The STOCH value of 51.16 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NEON.

Neonode Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CPSH	65 Neutral	$86.48M	-133.74	-3.84%	―	38.22%	70.68%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
NEON	56 Neutral	$31.89M	3.53	38.72%	―	-48.54%	―
LGL	55 Neutral	$35.18M	39.00	2.33%	―	14.07%	153.24%
MVIS	43 Neutral	$278.22M	-2.42	-112.89%	―	-67.66%	13.39%
WBX	43 Neutral	$43.16M	-0.29	-184.98%	―	-11.22%	6.15%