Northern Technologies International (NTIC) AI Stock Analysis

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Northern Technologies International

(NASDAQ:NTIC)

63Neutral

NTIC's stock score reflects stable financial performance with strong profitability and leverage, but faces challenges in revenue growth and cash flow management. Technical indicators suggest the stock is oversold, which might present a buying opportunity if fundamentals improve. The valuation is supported by a reasonable P/E ratio and high dividend yield. Earnings call insights indicate challenges but also potential for recovery, particularly through strategic investments and improvements in specific markets.

Northern Technologies International (NTIC) vs. S&P 500 (SPY)

Market Cap

$71.91M

Dividend Yield3.69%

Average Volume (3M)38.91K

Price to Earnings (P/E)19.7

Beta (1Y)<0.01

Revenue Growth2.11%

EPS Growth-17.52%

CountryUS

Employees262

SectorBasic Materials

Sector Strength59

IndustryChemicals - Specialty

Share Statistics

EPS (TTM)0.39

Shares Outstanding9,474,363

10 Day Avg. Volume66,805

30 Day Avg. Volume38,905

Financial Highlights & Ratios

PEG Ratio0.36

Price to Book (P/B)N/A

Price to Sales (P/S)1.22

Price to Cash Flow (P/CF)11.00

P/FCF Ratio10.50

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$13.00

Price Target Upside74.03% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering1

Northern Technologies International Business Overview & Revenue Model

Company DescriptionNorthern Technologies International Corporation develops and markets rust and corrosion inhibiting products and services in North America, South America, Europe, Asia, the Middle East and internationally. It offers rust and corrosion inhibiting products, such as plastic and paper packaging, liquids, coatings, rust removers, cleaners, diffusers, and engineered solutions designed for the oil and gas industry under the ZERUST brand. The company also provides a portfolio of bio-based and certified compostable polymer resin compounds and finished products under the Natur-Tec brand. In addition, it offers on-site and technical consulting for rust and corrosion prevention issues. The company sells its products and services to automotive, electronics, electrical, mechanical, military, retail consumer, and oil and gas markets through direct sales force, network of independent distributors and agents, manufacturer's sales representatives, strategic partners, and joint venture. Northern Technologies International Corporation was founded in 1970 and is headquartered in Circle Pines, Minnesota.

How the Company Makes MoneyNTIC generates revenue through the sale of its proprietary corrosion-prevention products under the Zerust brand, which are used extensively by manufacturers and industrial clients to protect metal products from rust and corrosion. Additionally, the company capitalizes on the growing demand for environmentally friendly products through its Natur-Tec line of bioplastics, offering sustainable alternatives to conventional plastics. NTIC also forms strategic alliances and joint ventures to expand its market reach and enhance its product offerings, contributing significantly to its income. These partnerships often involve localized production and distribution agreements, allowing NTIC to penetrate international markets and leverage local expertise.

Northern Technologies International Financial Statement Overview

Summary

NTIC demonstrates a stable financial profile with strong profitability margins and prudent leverage. The company faces minor revenue growth challenges but offsets this with solid equity and controlled debt levels. Cash flow management could be improved to enhance financial flexibility.

Income Statement

Positive

NTIC's TTM revenue shows a slight decrease compared to the previous annual report. However, the company maintains a healthy gross profit margin of 39.2% and a net profit margin of 4.5% for the TTM period, indicating strong cost management. The EBIT and EBITDA margins are 6.0% and 5.2% respectively, reflecting moderate operational efficiency.

Balance Sheet

Positive

The company's debt-to-equity ratio is low at 0.07, indicating conservative leverage. The return on equity (ROE) is modest at 5.2% based on TTM data, but the equity ratio is strong at 78.8%, highlighting a solid equity base and financial stability.

Cash Flow

Positive

NTIC's free cash flow growth rate is challenging to assess due to fluctuations in capital expenditures. The operating cash flow to net income ratio is 0.90, which is reasonable. However, the free cash flow to net income ratio is lower at 0.21, suggesting potential cash flow constraints.

TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Breakdown
Income Statement		Total Revenue
84.45M	85.06M	79.90M	74.16M	56.49M	47.64M
	Gross Profit
33.07M	33.79M	27.80M	23.07M	19.57M	16.03M
	EBIT
5.06M	7.87M	6.02M	3.63M	8.32M	687.68K
	EBITDA
4.42M	9.74M	1.20M	1.99M	1.97M	-1.61M
	Net Income Common Stockholders
3.81M	5.41B	2.91M	6.32M	6.28M	-934.76K
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
5.09M	4.95M	5.41M	5.34M	7.69M	11.95M
	Total Assets
93.70M	94.68M	89.34M	86.19M	74.37M	66.07M
	Total Debt
5.51M	7.54M	6.79M	6.46M	376.44K	658.79K
	Net Debt
424.08K	2.58M	1.38M	1.12M	-7.30M	-5.74M
	Total Liabilities
19.85M	19.50M	18.65M	18.95M	8.62M	6.37M
	Stockholders Equity
73.85M	71.19M	66.36M	63.60M	62.37M	56.66M
Cash Flow		Free Cash Flow
817.56K	2.46M	2.18M	-557.75K	-2.75M	4.10M
	Operating Cash Flow
3.44M	5.88M	5.54M	1.15M	2.89M	4.91M
	Investing Cash Flow
-4.49M	-3.42M	-3.34M	-7.11M	-103.32K	-2.78M
	Financing Cash Flow
1.48M	-2.96M	-2.05M	3.19M	-1.52M	-1.52M

Northern Technologies International Technical Analysis

Technical Analysis Sentiment

Negative

Last Price7.47

Price Trends

50DMA

10.15

Negative

100DMA

11.53

Negative

200DMA

12.14

Negative

Market Momentum

MACD

-0.96

Positive

RSI

29.66

Positive

STOCH

55.93

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NTIC, the sentiment is Negative. The current price of 7.47 is below the 20-day moving average (MA) of 8.54, below the 50-day MA of 10.15, and below the 200-day MA of 12.14, indicating a bearish trend. The MACD of -0.96 indicates Positive momentum. The RSI at 29.66 is Positive, neither overbought nor oversold. The STOCH value of 55.93 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NTIC.

Northern Technologies International Risk Analysis

Northern Technologies International disclosed 55 risk factors in its most recent earnings report. Northern Technologies International 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

Northern Technologies International Peers Comparison

Overall Rating

UnderperformOutperform

Sector (49)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NTIC	63 Neutral	$71.91M	19.70	5.51%	3.69%	2.11%	-17.52%
FSI	61 Neutral	$48.43M	15.79	8.30%	―	-0.23%	9.23%
Sector *	49 Neutral	$1.95B	-1.50	-21.97%	3.79%	0.66%	-27.21%
GURE	48 Neutral	$7.72M	―	-33.78%	―	-74.50%	7.21%
GPRE	46 Neutral	$231.73M	―	-9.65%	―	-25.69%	18.54%
ALTO	41 Neutral	$68.18M	―	-23.38%	―	-21.07%	-104.32%
LOOP	38 Underperform	$51.91M	―	-449.80%	―	5.45%	-155.56%

* Basic Materials Sector Average

Performance Comparison

NTIC

Northern Technologies International

7.47

-9.49

-55.96%

FSI

Flexible Solutions International

3.87

1.78

85.17%

GPRE

Green Plains

3.58

-17.82

-83.27%

GURE

Gulf Resources

0.68

-0.84

-55.26%

ALTO

Alto Ingredients

0.89

-1.05

-54.12%

LOOP

Loop Industries

1.13

-1.71

-60.21%

Northern Technologies International Earnings Call Summary

Earnings Call Date: Apr 10, 2025 | % Change Since: -23.31% | Next Earnings Date: Jul 10, 2025

Earnings Call Sentiment Neutral

The earnings call reflected challenges with decreased sales and profitability across various segments, especially in the European market, but also highlighted strategic investments and improvements in the Chinese market, positioning NTIC for potential recovery and growth in the latter half of the fiscal year.

Highlights

Improvement in NTIC China Sales

Fiscal 2025 second quarter net sales at NTIC China increased by 8.1% to $3.7 million, indicating stabilization and growth in this geographic area.

Strategic Investments in Oil and Gas Sales Infrastructure

Strategic investments were made to expand the oil and gas sales infrastructure to support expected accelerated sales in the second half of fiscal 2025.

Positive Trailing 12-Month Growth in Zerust Oil and Gas

On a trailing 12-month basis, Zerust Oil and Gas sales increased by 7.2% to $8.6 million.

Strong Cash Position

NTIC maintains a solid cash position with over $5 million in cash and cash equivalents in the U.S. and $13 million of additional cash at international joint ventures.

Lowlights

Decrease in Consolidated Net Sales

Total consolidated net sales decreased by 8.5% to $19.1 million year-over-year, including a 28.5% decrease in Zerust Oil and Gas net sales and an 11.8% decrease in Natur-Tec net sales.

Decline in Joint Venture Sales

Joint venture sales decreased by 15.7% year-over-year due to high energy prices and regional economic pressures in the European economy.

Reduced Gross Profit Margin

Gross profit as a percentage of net sales declined to 35.6% from 40.0% in the prior year period, largely due to a less profitable sales mix.

Decrease in Net Income

Net income for the fiscal 2025 second quarter was $434,000, down from $1.7 million in the fiscal 2024 second quarter.

Challenges in the European Market

The European economy is suffering due to high energy costs stemming from the Ukraine crisis, negatively impacting EXCOR Germany and the broader European market.

Company Guidance

During the Northern Technologies International Corporation's second quarter 2025 earnings call, the company provided guidance indicating challenges due to economic headwinds, such as changes in U.S. trade policies, affecting their business units. The company emphasized a decrease in total consolidated net sales by 8.5% to $19.1 million, with Zerust Oil and Gas sales down by 28.5%, Natur-Tec sales down by 11.8%, and Zerust Industrial sales by 3.7%. Joint venture sales also saw a 15.7% decline to $19.8 million. Despite these challenges, NTIC expects a rebound in their Natur-Tec and Zerust Oil and Gas segments in the second half of the fiscal year, supported by a solid cash position of over $5 million, with $13 million additional cash in international joint ventures. The company is focusing on debt reduction and expects sales growth driven by new customer demand and strategic investments in their oil and gas infrastructure. The gross profit margin decreased from 40% to 35.6% due to a less profitable sales mix, and net income fell to $434,000 from $1.7 million in the previous year. The company is addressing these challenges through strategic cash management and adjustments in quarterly dividends to position for future growth opportunities.

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.