Socket Mobile (SCKT) AI Stock Analysis

• Market Cap: $8.38M
• Dividend Yield: N/A
• Average Volume (3M): 19.41K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.79
• Revenue Growth: -13.01%
• EPS Growth: -65.20%
• Country: US
• Employees: 59
• Sector: Technology
• Sector Strength: 88
• Industry: Computer Hardware
• EPS (TTM): -0.15
• Shares Outstanding: 7,976,462
• 10 Day Avg. Volume: 31,820
• 30 Day Avg. Volume: 19,408
• PEG Ratio: -0.40
• Price to Book (P/B): 0.55
• Price to Sales (P/S): 0.54
• P/FCF Ratio: -7.67
• Enterprise Value/Market Cap: 1.74
• Enterprise Value/Revenue: 0.87
• Enterprise Value/Gross Profit: 1.74
• Enterprise Value/Ebitda: -11.57
• 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: 47 Neutral
• Price Target: $1.00 ▼(-2.91% Downside)

Socket Mobile's overall stock score reflects significant financial challenges, including declining revenue and profitability, which are the most impactful factors. While technical indicators suggest short-term bullish momentum, the overbought condition raises caution. Valuation concerns due to negative earnings and lack of dividends further weigh on the score. The earnings call provides some optimism with strategic initiatives and cost management, but these are longer-term factors.

Positive Factors

Strategic Market Expansion

Socket Mobile's entry into industrial markets with orders from Fortune 50 companies diversifies its revenue base and reduces dependency on retail, potentially stabilizing long-term revenue streams.

Product Innovation

The launch of Capture SDK 2.0 enhances product compatibility and supports new Bluetooth technologies, positioning Socket Mobile for future growth in mobile data capture solutions.

Cost Management

Effective cost management with a 16% reduction in operating expenses demonstrates the company's ability to adapt to challenging financial conditions, improving long-term profitability prospects.

Negative Factors

Revenue Decline

A significant 20% revenue decline indicates challenges in maintaining sales momentum, which could impact the company's ability to invest in growth and innovation.

Sustained Operating Losses

Persistent operating losses highlight ongoing operational challenges, potentially limiting the company's ability to reinvest in business development and innovation.

Cash Flow Challenges

A declining cash position underscores liquidity concerns, which may restrict the company's operational flexibility and ability to respond to market opportunities.

Socket Mobile Business Overview & Revenue Model

Company Description

Socket Mobile, Inc. provides data capture and delivery solutions in the United States, Europe, Asia, and internationally. The company's products are incorporated into mobile applications used in point of sale, commercial services, asset tracking, manufacturing process and quality control, transportation and logistics, event management, medical, and education. It provides cordless data capture devices that connect over Bluetooth and work with applications running on smartphones, mobile computers, and tablets; and software developer kits to application developers to enable them to provide their users with its advanced barcode scanning features. The company's cordless data capture devices include DuraScan 700 series, including D700 1D linear imaging scanner; D730 1D laser barcode scanner; D740, D745, D750, D755, and D760 universal barcode scanners that reads all common 1D, stacked, 2D, and postal codes; and SocketScan 800 series cordless barcode scanners, including S800, a 1D linear imaging scanner, and S840 and S860 2D scanner that are attachable to smartphones, tablets, and other mobile devices. It also provides D600 contactless RFID/Near Field Communications reader writer that can read and write various types of electronic SmartTags or transfer data with near field communication; and S550, a contactless membership card reader/writer. The company offers SocketCare services program, which provides extended warranty and accidental breakage coverage for various products. It serves retail, commercial, industrial and manufacturing, transportation and logistics, healthcare, government, travel and hospitality, education, and agriculture and farming industries through a network of distributors, online resellers, and application providers, as well as online stores. The company was formerly known as Socket Communications, Inc. and changed its name to Socket Mobile, Inc. in April 2008. Socket Mobile, Inc. was incorporated in 1992 and is headquartered in Newark, California.

How the Company Makes Money

Socket Mobile generates revenue primarily through the sale of its mobile data capture hardware, including barcode scanners and RFID readers, which are often sold directly to end-users or through distribution partnerships. The company also earns revenue from software and services related to its hardware products, including application development and technical support. Key revenue streams include direct sales to businesses across various sectors, as well as recurring revenue from software licensing and maintenance contracts. Strategic partnerships with mobile device manufacturers and software developers further enhance their market reach and contribute to their earnings by integrating Socket Mobile's solutions into broader technology ecosystems.

Socket Mobile Financial Statement Overview

Summary

Socket Mobile is facing significant challenges in revenue growth, profitability, and cash flow generation. Despite maintaining a conservative balance sheet with a reasonable debt-to-equity ratio, persistent negative margins and declining stockholders' equity raise concerns about long-term financial health. Addressing operational inefficiencies and improving cash flow are critical for future stability and growth.

Income Statement

Socket Mobile has faced declining revenue over the past few years, with a significant drop from $23.2 million in 2021 to $18.8 million in 2024. Gross profit margin has decreased from 53.6% in 2021 to 50.4% in 2024, indicating pressure on profitability. The net profit margin has also been negative in recent years, with a -11.9% margin in 2024, reflecting ongoing losses. The EBIT and EBITDA margins have deteriorated further into negative territory, showing operational inefficiencies and challenges in managing operating expenses.

Balance Sheet

The balance sheet of Socket Mobile shows a manageable debt-to-equity ratio of 0.37 in 2024, which indicates a conservative leverage position. However, stockholders' equity has declined from $20 million in 2021 to $18.2 million in 2024, reflecting the impact of sustained losses. The equity ratio has remained relatively stable at 66.4% in 2024, suggesting a solid asset base relative to liabilities. Despite this stability, the declining equity position is a concern.

Cash Flow

Socket Mobile's cash flow situation is concerning, with operating cash flow falling to zero in 2024 from $48,562 in 2023, indicating challenges in cash generation from core operations. Free cash flow has been negative in recent years, highlighting issues in covering capital expenditures and potential liquidity constraints. The lack of cash flow growth and a negative free cash flow to net income ratio indicate cash flow management issues.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	16.71M	18.76M	17.03M	21.24M	23.20M	15.70M
Gross Profit	8.38M	9.45M	8.46M	10.37M	12.44M	8.33M
EBITDA	-1.26M	-881.60K	-1.73M	833.33K	3.41M	-2.63M
Net Income	-2.86M	-2.24M	-1.92M	86.93K	4.47M	-3.28M
Balance Sheet
Total Assets	26.97M	27.35M	28.74M	28.60M	25.58M	15.61M
Cash, Cash Equivalents and Short-Term Investments	2.61M	2.49M	2.83M	3.62M	6.10M	2.12M
Total Debt	8.03M	6.79M	6.28M	5.24M	2.23M	2.18M
Total Liabilities	10.29M	9.19M	9.32M	8.28M	5.53M	4.44M
Stockholders Equity	16.68M	18.16M	19.42M	20.32M	20.05M	11.17M
Cash Flow
Free Cash Flow	-1.89M	-1.31M	-2.12M	-1.29M	1.45M	267.96K
Operating Cash Flow	-1.08M	-521.49K	48.56K	-111.42K	2.14M	804.45K
Investing Cash Flow	-809.71K	-715.52K	-2.16M	-1.18M	-691.77K	-536.48K
Financing Cash Flow	2.38M	902.34K	1.32M	-1.18M	2.52M	894.94K

Socket Mobile Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 1.03
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SCKT, the sentiment is Neutral. The current price of 1.03 is below the 20-day moving average (MA) of 1.07, below the 50-day MA of 1.13, and below the 200-day MA of 1.11, indicating a neutral trend. The MACD of -0.03 indicates Negative momentum. The RSI at 48.99 is Neutral, neither overbought nor oversold. The STOCH value of 63.30 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SCKT.

Socket Mobile Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
TACT	51 Neutral	$41.36M	-5.09	-23.00%	―	8.27%	-308.63%
KTCC	50 Neutral	$28.78M	-2.49	-9.78%	―	-20.03%	-485.19%
SCKT	47 Neutral	$8.38M	-2.90	-17.53%	―	-13.01%	-65.20%
INVE	47 Neutral	$85.04M	-4.39	-12.36%	―	-66.00%	28.84%
EBON	46 Neutral	$22.51M	-1.16	-7.04%	―	154.52%	47.31%
ZSPC	42 Neutral	$15.97M	-0.55	―	―	-24.20%	1.31%