SideChannel (SDCH) AI Stock Analysis

• Market Cap: $9.65M
• Dividend Yield: N/A
• Average Volume (3M): 108.09K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.74
• Revenue Growth: -0.66%
• EPS Growth: 4.88%
• Country: US
• Employees: 20
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): -0.09
• Shares Outstanding: 4,467,207
• 10 Day Avg. Volume: 29,178
• 30 Day Avg. Volume: 108,088
• PEG Ratio: 179.01
• Price to Book (P/B): 363.48
• Price to Sales (P/S): 105.96
• P/FCF Ratio: -5.99K
• Enterprise Value/Market Cap: 1.16
• Enterprise Value/Revenue: 1.52
• Enterprise Value/Gross Profit: 3.19
• Enterprise Value/Ebitda: -14.85
• 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: 45 Neutral
• Price Target: $2.50 ▲(4066.67% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is held down primarily by weak financial performance (flat-to-down revenue, ongoing losses, and inconsistent cash flow) and bearish technicals (below key moving averages with negative MACD). Earnings call commentary provides some offset via a defined 2026 growth narrative for Enclave and added go-to-market leadership, but valuation support is limited with a negative P/E and no dividend.

Positive Factors

Sustainable Gross Margins

A near-48% gross margin for a services/software-infrastructure hybrid indicates durable pricing power and favorable service economics. High gross margins allow the company to invest in sales and product (Enclave) while providing a clearer path to operating leverage as revenue scales, supporting long-term profitability potential.

Low Financial Leverage

Having essentially zero debt materially lowers refinancing and interest-rate risk, giving management flexibility to fund strategic initiatives (product upgrades, go-to-market hires) without immediate debt servicing pressures. For a small cybersecurity firm, this structural conservatism preserves optionality during scaling.

Enclave Product & GTM Focus

Product enhancements for SaaS access, microsegmentation and IPv6/DNS features align with secular cloud and remote-work trends. Positioning Enclave as the growth engine, coupled with targeted marketing and enterprise sales hires, strengthens the long-term revenue mix toward higher-margin, differentiated platform deployments.

Negative Factors

Stagnant / Declining Revenue

Flat-to-declining top-line growth signals limited product-market traction and slow commercial scaling. For a small services and platform vendor, persistent revenue stagnation constrains the ability to absorb fixed operating costs, slows margin expansion, and makes long-term growth dependent on execution risk tied to Enclave adoption.

Inconsistent Cash Generation

Volatile operating cash flow reduces internal funding reliability for sales, product development, and channel investments. This inconsistency increases the probability of external financing or cost cuts to support growth initiatives, constraining steady investment behind Enclave and go-to-market expansion over the medium term.

Ongoing Losses and Eroding Equity

Sustained net losses that shrink equity reduce the firm’s capital cushion and limit runway for strategic actions. For a small firm, negative returns on equity and declining shareholder capital constrain scaling options, raise the risk of capital raises or dilution, and weaken resilience to competitive or macro shocks.

SideChannel Business Overview & Revenue Model

Company Description

SideChannel, Inc. provides cybersecurity solutions. It offers RealCISO, a software platform that helps companies to understand and manage cyber risk. The company also provides virtual chief information security officer (vCISO), virtual chief privacy officer, risk assessments, cybersecurity compliance, risk management, training and awareness, and team building and staffing services. It serves clients in healthcare (tech), life sciences/bio tech, energy, technology, infrastructure/industrial, research institutes, legal, finance, and DoD/defense industrial base sectors. The company was formerly known as Cipherloc Corporation and changed its name to SideChannel, Inc. in July 2022. SideChannel, Inc. was incorporated in 1953 and is based in Austin, Texas.

How the Company Makes Money

SideChannel makes money primarily through consulting fees and service contracts. By offering tailored cybersecurity solutions, the company earns revenue from ongoing advisory services and implementation of security measures. Key revenue streams include subscription-based contracts for continuous monitoring services, one-time fees for specific projects like security architecture design, and premium pricing for emergency incident response. SideChannel may also have strategic partnerships with technology vendors, which can provide additional revenue through joint service offerings or referral agreements.

SideChannel Financial Statement Overview

Summary

Operating fundamentals are the main drag: revenue has been flat to slightly down and the company remains unprofitable with negative net margins. Positives include a low-risk balance sheet with essentially no debt and improved (but still inconsistent) cash flow, with 2025 returning to modestly negative operating/free cash flow.

Income Statement

Revenue has been roughly flat to slightly down in the latest year (2025 revenue down ~1.6% after modest growth in 2024), suggesting limited near-term momentum. Gross margin is steady around the high-40% range, which is a positive sign of pricing/cost consistency. However, the company remains unprofitable with negative operating and net margins in 2024–2025 (net loss ~12% of revenue), and while losses improved materially versus 2022–2023, the business has not yet demonstrated sustained operating profitability.

Balance Sheet

The balance sheet is conservatively levered with essentially no debt in recent years (2024–2025 total debt of $0 and debt-to-equity of 0), reducing financial risk and refinancing pressure. That said, equity has declined from 2023 to 2025 (roughly $3.0M to $2.1M), consistent with ongoing losses, and returns on equity remain meaningfully negative in the latest period—highlighting that the capital base is not currently generating profits.

Cash Flow

Cash generation is mixed. 2024 showed positive operating and free cash flow (about $0.3M), but 2025 slipped back to modestly negative operating and free cash flow (about -$0.13M), indicating volatility and limited consistency in funding operations internally. The large improvement versus 2023’s deeply negative operating cash flow is encouraging, but the latest-year reversal keeps cash flow quality and predictability below average.

Breakdown
Income Statement
Total Revenue
Gross Profit
EBITDA
Net Income
Balance Sheet
Total Assets
Cash, Cash Equivalents and Short-Term Investments
Total Debt
Total Liabilities
Stockholders Equity
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SideChannel Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.06
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SDCH, the sentiment is Negative. The current price of 0.06 is below the 20-day moving average (MA) of 2.39, below the 50-day MA of 2.75, and below the 200-day MA of 3.65, indicating a bearish trend. The MACD of -0.17 indicates Negative momentum. The RSI at 39.50 is Neutral, neither overbought nor oversold. The STOCH value of 83.31 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SDCH.

SideChannel 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%
BNAI	50 Neutral	$164.52M	-4.85	-218.30%	―	-24.72%	53.60%
AUID	46 Neutral	$21.55M	-0.89	-150.91%	―	141.81%	-21.61%
SDCH	45 Neutral	$9.65M	-8.78	-29.22%	―	-0.66%	4.88%
INTZ	42 Neutral	$18.07M	-1.42	-132.37%	―	33.49%	82.01%
ARQQ	42 Neutral	$256.53M	-6.66	-181.44%	―	80.89%	68.29%

SideChannel Corporate Events

SideChannel Reports Q1 Results, CEO Haugli Named Chairman

SideChannel held its 2026 annual meeting of stockholders on February 12, 2026, where shareholders elected five directors to the board and ratified RBSM, LLP as the independent auditor for the fiscal year ending September 30, 2026. The company also confirmed that a 1-for-52 reverse stock split, effective January 22, 2026 and approved at the 2025 annual meeting, did not change voting rights or vote tabulation at the 2026 meeting, with a quorum reached as 78.08% of eligible shares were represented.

In first-quarter FY 2026 results for the period ended December 31, 2025, reported on February 17, 2026, SideChannel posted revenue of $1.8 million, down 7% year over year, though gross margin improved to 51.2% while a 21.2% rise in operating expenses pushed net loss to $396,000 and reduced cash, equivalents and short-term investments to $595,000. Management highlighted marketing-led efforts to address declining revenue and support Enclave growth, alongside planned annual operating cost reductions of $930,000, and announced that CEO Brian Haugli became chairman on February 12, 2026, with director Anna Seacat joining the audit committee after the retirement of former chair Deborah MacConnel.

The most recent analyst rating on (SDCHD) stock is a Hold with a $2.00 price target. To see the full list of analyst forecasts on SideChannel stock, see the SDCHD Stock Forecast page.

SideChannel enhances Enclave platform for secure SaaS access

On January 27, 2026, SideChannel announced expanded capabilities for its Enclave platform aimed at reducing risk around software-as-a-service access as organizations continue shifting to cloud-based applications and remote work. The enhancements focus on preventing unauthorized access to critical SaaS applications, including email, by enforcing controls that only allow trusted users on approved devices and locations to connect, even when attackers possess valid credentials or have bypassed multi-factor authentication. The update introduces strengthened egress routing, IPv6 support, enhanced DNS features and extended microsegmentation, enabling organizations to secure modern, cloud-centric networks without disruptive redesigns or added operational complexity, which is intended to reduce security teams’ alert fatigue and improve overall risk management for customers.

The most recent analyst rating on (SDCHD) stock is a Hold with a $2.50 price target. To see the full list of analyst forecasts on SideChannel stock, see the SDCHD Stock Forecast page.