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Socket Mobile (SCKT)
NASDAQ:SCKT
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Socket Mobile (SCKT) AI Stock Analysis

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SCKT

Socket Mobile

(NASDAQ:SCKT)

Rating:44Neutral
Price Target:
$1.00
▼(-9.91%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.

Socket Mobile (SCKT) vs. SPDR S&P 500 ETF (SPY)

Socket Mobile Business Overview & Revenue Model

Company DescriptionSocket Mobile, Inc. is a leading provider of data capture and delivery solutions for mobile applications. The company specializes in designing and manufacturing barcode scanners, NFC/RFID readers, and other mobile accessories that enhance the data collection process across various industries. With a focus on creating reliable and efficient tools, Socket Mobile serves sectors such as retail, healthcare, logistics, and hospitality, enabling businesses to streamline their operations and improve productivity.
How the Company Makes MoneySocket Mobile generates revenue primarily through the sale of its data capture products, including handheld barcode scanners and NFC/RFID readers. These products are sold directly to businesses, often through distribution partners and resellers, which allows the company to reach a wide customer base. Additionally, Socket Mobile benefits from software development kits (SDKs) that integrate its hardware with customer applications, creating additional value for its products. The company also engages in strategic partnerships with software developers and platform providers to ensure compatibility and expand its market reach, thereby enhancing its revenue streams.

Socket Mobile Earnings Call Summary

Earnings Call Date:Jul 31, 2025
(Q2-2025)
|
% Change Since: -0.89%|
Next Earnings Date:Oct 23, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a challenging quarter with a significant revenue decline and increased operating loss. However, there are positive signs with successful product deployments and improved financial management. The company's expansion into new markets and cost control measures present a potential for future growth, though short-term challenges remain significant.
Q2-2025 Updates
Positive Updates
Successful XtremeScan Deployment
Delivered first XtremeScan products to a large industrial customer with flawless deployment, indicating positive potential for future sales.
Cost Control Measures
Operating expenses decreased to $2.7 million from $3.1 million in Q2 2024, reflecting effective cost management.
Expansion into New Markets
Investments in industrial scanning and handheld computing markets are beginning to show results, with interest from multiple Fortune 50 companies.
Improved EBITDA
EBITDA loss reduced to $100,000 from $481,000 in Q1 2025, showing improvement in financial performance.
Negative Updates
Revenue Decline
Revenue for Q2 decreased by 20% year-over-year to $4 million, reflecting continued softness in customer demand.
Operating Loss Increase
Operating loss increased to $700,000 from $500,000 in Q2 2024, indicating financial challenges.
Delayed Deployment
Significant portion of XtremeScan deployment delayed to 2026, affecting short-term revenue potential.
Continued Business Environment Uncertainty
Uncertainty in the business environment led to delayed or postponed projects, impacting revenue.
Company Guidance
During the Q2 2025 earnings call, Socket Mobile provided guidance indicating a challenging financial period, with revenue declining by 20% to $4 million compared to Q2 2024. The company reported a slight decrease in gross margins to 50% and an operating loss of $700,000, compared to a $500,000 loss the previous year. However, there was a marked improvement in EBITDA, which showed a loss of $100,000, a significant improvement from the $481,000 loss in Q1 2025. The company attributed these results to a weak business environment and postponed projects, though there were positive developments with the XtremeScan product line, which was successfully delivered to a large industrial customer. Despite these challenges, Socket Mobile aims to be EBITDA neutral in the second half of 2025, focusing on cost control and strategic investments in research and development, particularly in new market segments like ruggedized mobile handheld computing. Cash balance as of June 30 was $2.6 million, bolstered by a $1.5 million convertible note financing, while inventory management efforts resulted in a reduction to $4.8 million.

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
35
Negative
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
60
Neutral
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
40
Negative
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue17.75M18.76M17.03M21.24M23.20M15.70M
Gross Profit8.94M9.45M8.46M10.37M12.44M8.33M
EBITDA-1.20M-881.60K-1.73M833.33K3.41M-2.63M
Net Income-2.68M-2.24M-1.92M86.93K4.47M-3.28M
Balance Sheet
Total Assets27.16M27.35M28.74M28.60M25.58M15.61M
Cash, Cash Equivalents and Short-Term Investments1.71M2.49M2.83M3.62M6.10M2.12M
Total Debt6.66M6.79M6.28M5.24M2.23M2.18M
Total Liabilities9.92M9.19M9.32M8.28M5.53M4.44M
Stockholders Equity17.24M18.16M19.42M20.32M20.05M11.17M
Cash Flow
Free Cash Flow-1.94M-1.31M-2.12M-1.29M1.45M267.96K
Operating Cash Flow-1.16M-521.49K48.56K-111.42K2.14M804.45K
Investing Cash Flow-784.19K-715.52K-2.16M-1.18M-691.77K-536.48K
Financing Cash Flow878.59K902.34K1.32M-1.18M2.52M894.94K

Socket Mobile Technical Analysis

Technical Analysis Sentiment
Negative
Last Price1.11
Price Trends
50DMA
1.15
Negative
100DMA
1.16
Negative
200DMA
1.25
Negative
Market Momentum
MACD
>-0.01
Positive
RSI
40.33
Neutral
STOCH
27.78
Neutral
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 1.11 is below the 20-day moving average (MA) of 1.19, below the 50-day MA of 1.15, and below the 200-day MA of 1.25, indicating a bearish trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 40.33 is Neutral, neither overbought nor oversold. The STOCH value of 27.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SCKT.

Socket Mobile Risk Analysis

Socket Mobile disclosed 27 risk factors in its most recent earnings report. Socket Mobile 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

Socket Mobile Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
62
Neutral
$34.53B6.79-11.66%2.11%6.09%-7.36%
60
Neutral
$37.74M-25.34%-25.06%-1624.61%
57
Neutral
$116.37M-44.43%-4.34%-82.08%
53
Neutral
$81.48M-22.95%-77.64%-243.23%
45
Neutral
$62.52M-327.53%-3.17%90.94%
44
Neutral
$8.87M-16.13%-5.39%-54.90%
41
Neutral
$52.28M33.98%-17.08%-223.70%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SCKT
Socket Mobile
1.11
0.11
11.00%
INVE
Identiv
3.45
-0.33
-8.73%
QMCO
Quantum
7.53
0.53
7.57%
TACT
Transact Technologies
3.84
0.13
3.50%
UAVS
AgEagle Aerial Systems
1.92
-19.32
-90.96%
OSS
One Stop Systems
4.93
2.77
128.24%

Socket Mobile Corporate Events

Private Placements and Financing
Socket Mobile Extends Convertible Notes Maturity Date
Neutral
Aug 1, 2025

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.

Executive/Board ChangesShareholder Meetings
Socket Mobile Holds 2025 Annual Stockholders Meeting
Neutral
Jun 4, 2025

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.

Private Placements and FinancingBusiness Operations and Strategy
Socket Mobile Completes Convertible Note Financing
Positive
Jun 2, 2025

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.

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.Date of analysis: Aug 02, 2025