Socket Mobile (SCKT) AI Stock Analysis

• Market Cap: $8.04M
• Dividend Yield: N/A
• Average Volume (3M): 14.85K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.73
• Revenue Growth: -5.39%
• EPS Growth: -54.90%
• Country: US
• Employees: 59
• Sector: Technology
• Sector Strength: 85
• Industry: Computer Hardware
• EPS (TTM): -0.10
• Shares Outstanding: 7,961,462
• 10 Day Avg. Volume: 6,810
• 30 Day Avg. Volume: 14,848
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.81
• Enterprise Value/Revenue: 0.82
• Enterprise Value/Gross Profit: 1.63
• Enterprise Value/Ebitda: -12.16
• 1Y Price Target: $1.00
• Price Target Upside: -1.96% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 44 Neutral
• Price Target: $1.00 ▼(-1.96% Downside)

Socket Mobile's overall score is primarily influenced by its weak financial performance and negative valuation. While technical analysis also indicates bearish trends, some optimism arises from strategic moves like the convertible note financing and potential growth in new markets. However, these positives are overshadowed by significant financial challenges and uncertain business conditions.

Positive Factors

Strategic Financing

The successful financing round boosts liquidity, enabling strategic investments and operational flexibility, which is crucial for long-term growth.

Market Expansion

Entering new markets with interest from Fortune 50 companies suggests potential for significant revenue growth and diversification.

Cost Management

Effective cost control measures improve profitability and operational efficiency, supporting financial stability in challenging times.

Negative Factors

Revenue Decline

A significant drop in revenue indicates ongoing demand challenges, potentially impacting long-term growth and market position.

Negative Cash Flow

Inability to generate positive cash flow from operations raises concerns about liquidity and the ability to fund future growth.

Declining Equity

A declining equity base reflects sustained losses, which could limit financial resilience and investor confidence over time.

Socket Mobile Business Overview & Revenue Model

Company Description

Socket Mobile (SCKT) is a leading provider of mobile data capture solutions, primarily serving sectors such as retail, healthcare, and logistics. The company specializes in the development of Bluetooth barcode scanners and NFC (Near Field Communication) solutions, which enable businesses to improve inventory management, streamline operations, and enhance customer engagement. Socket Mobile's core products include handheld scanners and mobile point-of-sale (mPOS) solutions, designed to work seamlessly with various mobile devices and platforms.

How the Company Makes Money

Socket Mobile generates revenue through the sale of its hardware products, including barcode scanners and NFC devices, which are marketed to businesses in various industries. Key revenue streams include direct sales to end-users, distribution agreements with third-party resellers, and partnerships with software developers that integrate Socket Mobile's devices into their applications. The company also benefits from recurring revenue through ongoing support services, accessories, and software updates, which enhance the value of its products. Additionally, strategic partnerships with technology companies and participation in industry-specific events contribute to brand visibility and customer acquisition, further bolstering its earnings.

Socket Mobile Financial Statement Overview

Summary

Socket Mobile is facing significant challenges in terms of revenue growth, profitability, and cash flow generation. Despite a conservative balance sheet, the 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.

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	17.75M	18.76M	17.03M	21.24M	23.20M	15.70M
Gross Profit	8.94M	9.45M	8.46M	10.37M	12.44M	8.33M
EBITDA	-1.20M	-881.60K	-1.73M	833.33K	3.41M	-2.63M
Net Income	-2.68M	-2.24M	-1.92M	86.93K	4.47M	-3.28M
Balance Sheet
Total Assets	27.16M	27.35M	28.74M	28.60M	25.58M	15.61M
Cash, Cash Equivalents and Short-Term Investments	1.71M	2.49M	2.83M	3.62M	6.10M	2.12M
Total Debt	6.66M	6.79M	6.28M	5.24M	2.23M	2.18M
Total Liabilities	9.92M	9.19M	9.32M	8.28M	5.53M	4.44M
Stockholders Equity	17.24M	18.16M	19.42M	20.32M	20.05M	11.17M
Cash Flow
Free Cash Flow	-1.94M	-1.31M	-2.12M	-1.29M	1.45M	267.96K
Operating Cash Flow	-1.16M	-521.49K	48.56K	-111.42K	2.14M	804.45K
Investing Cash Flow	-784.19K	-715.52K	-2.16M	-1.18M	-691.77K	-536.48K
Financing Cash Flow	878.59K	902.34K	1.32M	-1.18M	2.52M	894.94K

Socket Mobile Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1.02
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SCKT, the sentiment is Negative. The current price of 1.02 is below the 20-day moving average (MA) of 1.04, below the 50-day MA of 1.09, and below the 200-day MA of 1.22, indicating a bearish trend. The MACD of -0.01 indicates Negative momentum. The RSI at 44.52 is Neutral, neither overbought nor oversold. The STOCH value of 15.37 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	$36.69B	12.42	-10.20%	1.85%	8.50%	-7.32%
TACT	60 Neutral	$46.63M	―	-24.73%	―	-9.09%	-1586.89%
OSS	60 Neutral	$122.12M	―	-44.58%	―	4.65%	-79.75%
INVE	53 Neutral	$87.53M	―	-23.11%	―	-73.87%	-115.50%
SCKT	44 Neutral	$8.04M	―	-16.13%	―	-5.39%	-54.90%
QMCO	41 Neutral	$94.77M	―	33.98%	―	-8.07%	-86.20%
UAVS	39 Underperform	$63.30M	―	-164.37%	―	1.90%	93.50%

Socket Mobile Corporate Events

Socket Mobile Extends Convertible Notes Maturity Date

Socket Mobile, Inc. completed a secured subordinated convertible note financing of $1,530,000 on August 31, 2020. The company has extended the maturity date of these notes multiple times, with the latest extension on July 31, 2025, pushing the maturity date to August 30, 2027. This extension agreement was approved by the company’s disinterested directors due to the involvement of related parties, including key executives and board members.

Socket Mobile Holds 2025 Annual Stockholders Meeting

On June 4, 2025, Socket Mobile, Inc. held its virtual 2025 Annual Meeting of Stockholders where six directors were elected, executive compensation policies were approved, and Sadler, Gibb & Associates LLC was ratified as the independent public accountants for the fiscal year 2025. The meeting saw a quorum with 68.1% of total shares voted, resulting in the election of all nominated directors, approval of executive compensation with 91.3% affirmative votes, and ratification of the accounting firm with 94.3% affirmative votes.

Socket Mobile Completes Convertible Note Financing

On May 30, 2025, Socket Mobile, Inc. completed a $1,500,000 secured subordinated convertible note financing to enhance its working capital. The notes, maturing in 2028, offer a 10% annual interest rate and are convertible into common stock, with key company executives participating in the financing. This move underscores the company’s efforts to strengthen its financial position and involves significant insider participation, reflecting confidence in its strategic direction.