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Northern Technologies International (NTIC)
NASDAQ:NTIC
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Northern Technologies International
(NASDAQ:NTIC)
Rating:63Neutral
Price Target:―
Northern Technologies International (NTIC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$68.50M
Dividend Yield3.04%
Average Volume (3M)33.40K
Price to Earnings (P/E)18.8
Beta (1Y)0.09
Revenue Growth2.11%
EPS Growth-17.52%
CountryUS
Employees262
SectorBasic Materials
Sector Strength64
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)-0.03
Shares Outstanding9,474,363
10 Day Avg. Volume27,848
30 Day Avg. Volume33,401
Financial Highlights & Ratios
PEG Ratio-0.74
Price to Book (P/B)0.99
Price to Sales (P/S)0.00
P/FCF Ratio84.25
Enterprise Value/Market Cap1.05
Enterprise Value/Revenue0.21
Enterprise Value/Gross Profit2.18
Enterprise Value/Ebitda3.15
Forecast
1Y Price Target
$13.00Price Target Upside79.81% 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 shows strong profitability margins and prudent leverage with a low debt-to-equity ratio. However, it faces minor revenue growth challenges and cash flow management could be enhanced to improve financial flexibility.Income Statement
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.75
Positive
Balance Sheet
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.80
Positive
Cash Flow
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.68
Positive
| Breakdown | |||||
| TTM | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|
| 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 |
| 6.18M | 9.74M | 1.20M | 1.99M | 1.97M | -1.61M | Net Income Common Stockholders |
| 3.81M | 5.41M | 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 |
| 8.40M | 7.54M | 6.79M | 6.46M | 376.44K | 658.79K | Net Debt |
| 3.31M | 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 |
| 69.75M | 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
Negative
7.23
Price Trends
8.55
Negative
10.23
Negative
11.53
Negative
Market Momentum
-0.28
Negative
33.00
Neutral
27.81
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 7.23 is below the 20-day moving average (MA) of 7.32, below the 50-day MA of 8.55, and below the 200-day MA of 11.53, indicating a bearish trend. The MACD of -0.28 indicates Negative momentum. The RSI at 33.00 is Neutral, neither overbought nor oversold. The STOCH value of 27.81 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 1 New Risks
1.
The installation of a new Enterprise Resource Planning software system and related equipment could cause disruption to NTIC's business, and NTIC may not be able to effectively realize the benefits of this new system. Q3, 2024
Northern Technologies International Peers Comparison
Overall Rating
UnderperformOutperform
Sector (50)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
63 Neutral | $68.50M | 18.76 | 5.51% | 3.04% | 2.11% | -17.52% | |
63 Neutral | $58.05M | 24.97 | 6.19% | ― | -3.23% | -2.01% | |
50 Neutral | $1.99B | -1.06 | -21.34% | 3.71% | 2.03% | -30.65% | |
49 Neutral | $275.33M | ― | -12.34% | ― | -19.82% | -34.91% | |
48 Neutral | $8.34M | ― | -34.69% | ― | -74.50% | 7.21% | |
45 Neutral | $74.89M | ― | -24.43% | ― | -17.27% | -112.62% | |
38 Underperform | $48.57M | ― | -449.80% | ― | 5.45% | -155.56% |
* Basic Materials Sector Average
Performance Comparison
NTIC
Northern Technologies International
7.23
-10.46
-59.13%
FSI
Flexible Solutions International
4.59
2.48
117.54%
GPRE
Green Plains
4.21
-13.83
-76.66%
GURE
Gulf Resources
0.62
-0.99
-61.49%
ALTO
Alto Ingredients
0.97
-0.52
-34.90%
LOOP
Loop Industries
1.02
-1.53
-60.00%
Northern Technologies International Earnings Call Summary
Earnings Call Date:Apr 10, 2025
(Q2-2025)
| % Change Since: -25.69%|
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.Q2-2025 Updates
Positive Updates
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.
Negative Updates
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.