Socket Mobile (SCKT) AI Stock Analysis

• Market Cap: $10.34M
• Dividend Yield: N/A
• Average Volume (3M): 12.09K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.05
• Revenue Growth: 0.29%
• EPS Growth: -52.27%
• Country: US
• Employees: 59
• Sector: Technology
• Sector Strength: 67
• Industry: Computer Hardware
• EPS (TTM): -0.13
• Shares Outstanding: 7,952,988
• 10 Day Avg. Volume: 17,857
• 30 Day Avg. Volume: 12,087
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.33
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 1.46
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

Socket Mobile faces considerable financial hurdles, with declining revenues and negative margins weighing heavily on its outlook. While strategic moves into industrial markets and new product offerings present potential growth avenues, these are overshadowed by current operational inefficiencies and cash flow concerns. The stock's valuation is unattractive given the negative earnings and lack of dividends. Technical indicators offer no strong directional cues, reflecting market uncertainty. Overall, the risks currently outweigh the potential rewards.

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 data capture devices, including barcode scanners and RFID readers. Key revenue streams include direct sales to businesses and distribution through resellers and partners. The company also earns from software development kits (SDKs) that enable developers to integrate its hardware with mobile applications. Partnerships with mobile platform providers enhance its market reach and contribute to its earnings. Additionally, support and maintenance contracts provide a recurring revenue stream.

Socket Mobile Financial Statement Overview

Summary

Socket Mobile is encountering substantial financial challenges, particularly in revenue growth and cash flow management. The income statement reveals declining revenues and negative profit margins, indicating operational inefficiencies. Despite a conservative balance sheet with a manageable debt-to-equity ratio, the persistent losses raise concerns about long-term viability. Addressing these issues is crucial 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
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
18.76M	17.03M	21.24M	23.20M	15.70M
	Gross Profit
9.45M	8.46M	10.37M	12.44M	8.34M
	EBIT
-2.46M	-3.12M	-446.00K	2.00M	2.79M
	EBITDA
-1.40M	-1.73M	833.33K	3.52M	-2.63M
	Net Income Common Stockholders
-2.24M	-1.92M	86.93K	4.47M	-3.28M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.49M	2.83M	3.62M	6.10M	2.12M
	Total Assets
27.35M	28.74M	28.60M	25.57M	15.06M
	Total Debt
6.79M	6.28M	5.24M	2.23M	2.18M
	Net Debt
4.29M	3.45M	1.62M	-3.87M	61.00K
	Total Liabilities
9.19M	9.32M	8.28M	5.53M	4.44M
	Stockholders Equity
18.16M	19.42M	20.32M	20.05M	10.62M
Cash Flow		Free Cash Flow
-1.31M	-2.12M	-1.29M	1.45M	267.96K
	Operating Cash Flow
-521.49K	48.56K	-111.42K	2.14M	804.45K
	Investing Cash Flow
-715.52K	-2.16M	-1.18M	-691.77K	-536.48K
	Financing Cash Flow
902.34K	1.32M	-1.18M	2.52M	894.94K

Socket Mobile Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 1.23
• 50DMA: Positive
• 100DMA: Negative
• 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 1.23 is above the 20-day moving average (MA) of 1.17, above the 50-day MA of 1.16, and below the 200-day MA of 1.23, indicating a neutral trend. The MACD of 0.03 indicates Negative momentum. The RSI at 53.96 is Neutral, neither overbought nor oversold. The STOCH value of 76.80 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 *	60 Neutral	$10.93B	10.46	-6.70%	2.99%	7.54%	-12.22%
OSS	51 Neutral	$52.13M	―	-40.85%	―	-10.19%	-97.96%
INVE	49 Neutral	$78.74M	―	-21.97%	―	-63.51%	-326.18%
TACT	47 Neutral	$35.89M	―	-28.16%	―	-40.27%	-306.30%
SCKT	46 Neutral	$10.34M	―	-14.72%	―	0.29%	-52.27%
QMCO	41 Neutral	$73.03M	―	33.98%	―	-17.08%	-223.70%
UAVS	38 Underperform	$12.10M	―	-1414.23%	―	-2.54%	80.26%