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Algorhythm Holdings (RIME)
NASDAQ:RIME
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Algorhythm Holdings
(NASDAQ:RIME)
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Rating:40Underperform
Price Target:
$2.00
▼(-25.09% Downside)
Algorhythm Holdings faces significant financial and valuation challenges, with negative equity and profitability issues being the most critical factors. Technical indicators suggest a bearish trend, further weighing on the stock's outlook. While the earnings call provided some optimism regarding future growth, the immediate financial risks overshadow these prospects.
Algorhythm Holdings (RIME) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.71M
Dividend YieldN/A
Average Volume (3M)488.51K
Price to Earnings (P/E)―
Beta (1Y)0.12
Revenue GrowthN/A
EPS GrowthN/A
CountryUS
Employees25
SectorTechnology
Sector Strength88
IndustryConsumer Electronics
Share Statistics
EPS (TTM)-0.24
Shares Outstanding2,514,571
10 Day Avg. Volume91,746
30 Day Avg. Volume488,506
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap0.94
Enterprise Value/Revenue0.27
Enterprise Value/Gross Profit1.17
Enterprise Value/Ebitda-0.27
Forecast
1Y Price Target
$2.00Price Target Upside-25.09% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering1
Algorhythm Holdings Business Overview & Revenue Model
Company DescriptionAlgorhythm Holdings, Inc., together with its subsidiaries, engages in the development, marketing, and sale of consumer karaoke audio equipment, accessories, and musical recordings in North America, Australia, the United Kingdom, Europe, and internationally. It offers karaoke products under the Singing Machine brand; licensed karaoke microphone products under the Carpool Karaoke brand; microphone and accessories, and portable Bluetooth microphones under the Party Machine brand; music entertainment singing machines for children under the brand Singing Machine Kids; connected vehicle karaoke devices; and karaoke music subscription services for the iOS and Android platforms, as well as a web-based download store and integrated streaming services for hardware. The company primarily sells its products to retailers, including national chains, warehouse clubs, department stores, lifestyle merchants, specialty stores, and direct mail catalogs and showrooms. The company was formerly known as The Singing Machine Company, Inc. and changed its name to Algorhythm Holdings, Inc. in September 2024. Algorhythm Holdings, Inc. was incorporated in 1982 and is headquartered in Fort Lauderdale, Florida.
How the Company Makes MoneyAlgorhythm Holdings generates revenue through a combination of software licensing, subscription fees, and consulting services. The company charges clients for access to its proprietary analytics platforms, which are offered on a subscription basis, allowing businesses to leverage data-driven insights on an ongoing basis. Additionally, Algorhythm Holdings earns revenue from providing customized consulting services that help clients implement and optimize their analytics solutions. Key partnerships with major technology firms and healthcare providers further enhance its market reach and contribute to its overall earnings by facilitating access to a broader client base and enhancing product offerings.
Algorhythm Holdings Earnings Call Summary
Earnings Call Date:Aug 20, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 19, 2025
Earnings Call Sentiment Positive
The call highlighted the strategic pivot from the Singing Machine to the high-growth SemiCab business, showcasing significant operational improvements and growth potential. However, challenges with Singing Machine sales and the need for additional capital were noted. Overall, the focus on future growth and improved financial metrics provided an optimistic outlook.Q2-2025 Updates
Positive Updates
Strategic Sale of Singing Machine
The company strategically sold its Singing Machine business, generating $4.5 million in total consideration and reducing liabilities by approximately $4 million, strengthening the balance sheet and reducing ongoing cash burn.
Significant Growth in SemiCab Business
SemiCab reported a breakthrough quarter with 5 new contracts and 4 existing clients expanding their geographic lanes and volume by over 100% to 200%. The fleet expanded from 140 to 450 trucks, with an annualized revenue run rate increase of almost 300% to approximately $7 million.
Improvement in Gross Profit and Margin
Gross profit for the quarter increased to $954,000 from $324,000, with gross margin improving to 35% from 13% due in part to onetime adjustments.
Reduction in Net Loss
Net loss decreased significantly to $809,000 from $6.2 million in the comparable period last year, primarily due to the sale of Singing Machine and reduced general and administrative expenses.
Negative Updates
Decline in Singing Machine Sales
Singing Machine sales were negatively impacted by increased inflation and tariffs, with all products manufactured in China. The business faced declining sales year-over-year due to market headwinds.
Need for Additional Capital
The company acknowledged the need to raise more capital to finance SemiCab's growth, potentially through equity sales, which could dilute current shareholders.
Company Guidance
During the Algorhythm Holdings Second Quarter 2025 Earnings Call, CEO Gary Atkinson highlighted the strategic divestiture of the Singing Machine, generating $4.5 million and reducing liabilities by $4 million, which strengthens the company's balance sheet. This move allows Algorhythm to focus on its AI logistics platform, SemiCab, which operates in a massive addressable market. SemiCab has recently secured five new contracts with India's largest consumer goods companies, expanded existing client volumes by over 100-200%, and increased its fleet from 140 to 450 trucks, boosting the annualized revenue run rate to $23 million. CFO Alex Andre reported a revenue increase to $2.7 million for the quarter ending June 30, 2025, with gross profit rising to $954,000 and a decrease in net loss to $809,000. Future growth is anticipated with SemiCab's revenue run rate projected to rise to between $15 million and $20 million over the next 12 months.Algorhythm Holdings Financial Statement Overview
Summary
Algorhythm Holdings is facing significant financial challenges, including declining revenues, negative profitability, and cash flow issues. The negative equity and high leverage pose substantial risks, necessitating strategic interventions to stabilize and improve financial performance.Income Statement
Algorhythm Holdings has experienced declining revenue from $47.5M in 2022 to $23.5M in 2024, indicating significant revenue contraction. The gross profit margin has also decreased, reflecting reduced profitability. Net profit margins are negative due to substantial net losses, with EBIT and EBITDA margins also negative, indicating operational challenges.45
Neutral
Balance Sheet
The company has a negative stockholders' equity of -$9.5M in 2024, indicating financial distress. The debt-to-equity ratio is not meaningful due to negative equity, and the equity ratio is negative, highlighting a highly leveraged position with potential solvency risks.30
Negative
Cash Flow
Operating cash flow has turned negative in 2024, and free cash flow is also negative, reflecting cash flow challenges. The free cash flow to net income ratio is not favorable, indicating inefficiencies in converting income into cash.40
Negative
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 23.34M | 23.49M | 38.93M | 39.30M | 47.51M | 45.80M |
| Gross Profit | 5.41M | 4.78M | 8.25M | 9.21M | 10.81M | 12.30M |
| EBITDA | -23.67M | -22.02M | -7.81M | -2.18M | 1.11M | 3.40M |
| Net Income | -23.74M | -23.26M | -8.53M | -4.64M | 230.00K | 2.17M |
Balance Sheet | ||||||
| Total Assets | 12.70M | 18.30M | 27.71M | 16.65M | 22.67M | 16.76M |
| Cash, Cash Equivalents and Short-Term Investments | 1.13M | 7.55M | 6.70M | 2.90M | 2.29M | 396.58K |
| Total Debt | 1.03M | 650.00K | 4.01M | 735.65K | 4.42M | 3.42M |
| Total Liabilities | 9.88M | 28.82M | 20.14M | 6.32M | 12.63M | 8.85M |
| Stockholders Equity | 2.81M | -9.48M | 7.58M | 10.33M | 10.04M | 7.91M |
Cash Flow | ||||||
| Free Cash Flow | -10.29M | -8.63M | 457.33K | -574.00K | -2.13M | -30.14K |
| Operating Cash Flow | -10.20M | -8.56M | 548.00K | -330.00K | -2.01M | 171.02K |
| Investing Cash Flow | -2.84M | -2.25M | -18.67K | -244.00K | -118.00K | -201.16K |
| Financing Cash Flow | 11.31M | 11.65M | 4.55M | 1.18M | 4.02M | 81.52K |
Algorhythm Holdings Technical Analysis
Positive
2.67
Price Trends
2.30
Positive
2.45
Positive
4.91
Negative
Market Momentum
0.08
Negative
68.55
Neutral
87.01
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RIME, the sentiment is Positive. The current price of 2.67 is above the 20-day moving average (MA) of 2.21, above the 50-day MA of 2.30, and below the 200-day MA of 4.91, indicating a neutral trend. The MACD of 0.08 indicates Negative momentum. The RSI at 68.55 is Neutral, neither overbought nor oversold. The STOCH value of 87.01 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RIME.
Algorhythm Holdings Risk Analysis
Algorhythm Holdings disclosed 46 risk factors in its most recent earnings report. Algorhythm Holdings 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 3 New Risks
1.
If we do not continue to satisfy the nasdaq capital market continued listing requirements, our common stock could be delisted from the nasdaq capital market. Q1, 2023
2.
Certain provisions of our certificate of incorporation allow concentration of voting power, which may, among other things, delay or frustrate the removal of incumbent directors or a takeover attempt, even if such events may be beneficial to our stockholders. Q1, 2023
3.
Certain provisions of our certificate of incorporation, bylaws and delaware law make it more difficult for a third party to acquire us and make a takeover more difficult to complete, even if such a transaction were in the stockholders' interest. Q1, 2023
Algorhythm Holdings Peers Comparison
UnderperformOutperform
Sector (61)
RIME
Algorhythm Holdings
2.67
-91.53
-97.17%
MSN
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FOXX
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4.89
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WLDS
Wearable Devices Ltd.
4.95
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FEBO
Fenbo Holdings Limited
0.72
-5.14
-87.71%
Algorhythm Holdings Corporate Events
Executive/Board ChangesPrivate Placements and Financing
Algorhythm Holdings Enters $20M Securities Agreement
Neutral
Aug 27, 2025
On August 21, 2025, Algorhythm Holdings, Inc. entered into a securities purchase agreement with Streeterville Capital, LLC to issue and sell shares of its common stock for up to $20 million. The proceeds are intended for working capital and other corporate purposes. The agreement includes an initial pre-paid purchase of $4.39 million and allows for additional purchases over a two-year period, subject to certain conditions. The company is required to file a registration statement for the resale of shares and obtain stockholder approval for issuing shares beyond a certain threshold. Additionally, Joseph Kling resigned from the board of directors on the same date, with no disagreements regarding company operations.
The most recent analyst rating on (RIME) stock is a Hold with a $2.00 price target. To see the full list of analyst forecasts on Algorhythm Holdings stock, see the RIME Stock Forecast page.
Business Operations and StrategyM&A Transactions
Algorhythm Holdings Sells Karaoke Business to Stingray
Positive
Aug 7, 2025
On August 1, 2025, Algorhythm Holdings sold its Singing Machine karaoke business to Stingray Music USA, a subsidiary of Stingray Group, for $4.5 million. This transaction, which eliminated approximately $4 million in liabilities and reduced annual cash outflows by over 70%, allows Algorhythm to focus on its AI freight platform, SemiCab. The sale marks a strategic shift for Algorhythm, enabling it to concentrate resources on SemiCab’s growth, which has significantly increased its revenue run rate since January 2025.
The most recent analyst rating on (RIME) stock is a Buy with a $5.00 price target. To see the full list of analyst forecasts on Algorhythm Holdings stock, see the RIME Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.