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Safeguard Scientifics (SFES)
OTHER OTC:SFES
US Market

Safeguard Scientifics (SFES) AI Stock Analysis

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Safeguard Scientifics

(OTC:SFES)

Rating:42Neutral
Price Target:
The overall score is primarily impacted by the weak financial performance, characterized by a lack of revenue and profitability, and negative cash flow. Technical analysis provides some positive momentum, but the near-overbought indicators suggest caution. Valuation remains unattractive due to negative earnings and no dividend yield.

Safeguard Scientifics (SFES) vs. SPDR S&P 500 ETF (SPY)

Safeguard Scientifics Business Overview & Revenue Model

Company DescriptionSafeguard Scientifics, Inc. no longer investing. It is a private equity and venture capital firm specializing in expansion financings, growth capital, management buyouts, recapitalizations, industry consolidations, corporate spinouts, growth stage, and early stage financings. It initially invests in a Series A-C round and opportunistically in a seed round. The firm prefers to make investments in companies engaged in the technology, financial services, and healthcare sector. Within the technology sector, it invests in software as a service, adtech / digital media, Internet of Everything, enhanced security, predictive analytics, machine learning, artificial intelligence, enterprise software, technology enabled services, internet/new media, financial technology, cloud, mobile, social, big data, in memory, and selected business services with capital requirements of up to $25 million. Within healthcare sector, the firm invests in molecular and point-of-care diagnostics, medical devices, regenerative medicine, medical technology, digital health, healthcare technology, specialty pharmaceuticals, and selected healthcare services. It invests throughout the United States with a focus on Mid-Atlantic region, and Southeastern Canada. The firm primarily invests between $5 million and $25 million in growth equity financing and between $5 million and $10 million in early-stage financing. It typically invests in the capital structures including owner financed and bootstrapped companies, corporate division or business unit, and venture capital-backed seeking a growth partner. The firm prefers to be the largest shareholder in its portfolio companies, with ownership in the range of 20 percent to 50 percent. However, it may occasionally take a majority or smaller stake in its portfolio companies. It prefers to invest in companies having proprietary technology and intellectual property. The firm prefers to take a Board seat in its portfolio companies. The company was founded in 1953 as Lancaster Corporation and changed its name to Safeguard Scientifics, Inc. in 1981. Safeguard Scientifics, Inc. is based in Radnor, Pennsylvania with additional office in Weston, Massachusetts.
How the Company Makes MoneySafeguard Scientifics makes money primarily through the capital appreciation of its investments in portfolio companies. The company's revenue model involves acquiring equity stakes in healthcare, financial services, and digital media companies, and then working closely with these businesses to enhance their value. Safeguard's earnings are realized through exits, such as mergers, acquisitions, or public offerings, where they sell their equity stakes at a profit. Additionally, the company may earn revenue from management fees associated with its investment activities. Significant partnerships with entrepreneurs and other investors contribute to its ability to identify promising investment opportunities and optimize the growth potential of its portfolio.

Safeguard Scientifics Financial Statement Overview

Summary
Safeguard Scientifics is facing significant challenges across all financial verticals. The lack of revenue and profitability is a major concern, as reflected in the negative income statement metrics. While the balance sheet shows low leverage, diminishing equity and assets raise stability concerns. The cash flow statement highlights cash generation issues, with consistent negative free cash flow. Overall, the financial health appears to be weak, with critical areas needing strategic improvement.
Income Statement
20
Very Negative
The company has consistently had zero revenue over the years, leading to negative gross profit, EBIT, and EBITDA. The net income has also been negative, indicating a lack of profitability. Revenue growth is non-existent due to the absence of revenue, resulting in poor overall performance on the income statement.
Balance Sheet
45
Neutral
The company has maintained a relatively low debt-to-equity ratio over the years, indicating low leverage. However, the continuous decline in stockholders' equity suggests potential risks. The equity ratio is relatively healthy, but the declining asset base and shrinking equity are concerning.
Cash Flow
30
Negative
There is a consistent negative free cash flow, and the operating cash flow has been negative across all reported years, reflecting poor cash generation capabilities. The lack of free cash flow growth and negative operating cash flow to net income ratios indicate cash flow challenges.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue0.000.000.000.000.000.00
Gross Profit-319.00K-374.00K-319.00K-271.00K-229.00K-311.00K
EBITDA-5.64M-10.01M-9.51M-13.99M27.23M-37.30M
Net Income-7.19M-10.38M-9.83M-14.26M27.00M-37.62M
Balance Sheet
Total Assets18.19M11.30M22.84M37.69M54.03M69.03M
Cash, Cash Equivalents and Short-Term Investments7.21M6.82M9.52M20.17M24.76M15.60M
Total Debt1.01M760.00K1.25M1.68M2.05M2.38M
Total Liabilities1.69M1.48M2.86M3.12M3.46M6.16M
Stockholders Equity16.50M9.83M19.98M34.58M50.57M62.88M
Cash Flow
Free Cash Flow-3.60M-2.98M-3.31M-3.26M-8.15M-8.14M
Operating Cash Flow-3.60M-2.98M-3.31M-3.26M-8.15M-8.14M
Investing Cash Flow2.47M285.00K5.72M-4.66M58.11M-1.27M
Financing Cash Flow-5.93M-9.00K-6.25M-3.49M-40.80M-40.00K

Safeguard Scientifics Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price0.81
Price Trends
50DMA
0.86
Negative
100DMA
0.84
Negative
200DMA
0.86
Negative
Market Momentum
MACD
-0.01
Negative
RSI
50.88
Neutral
STOCH
63.98
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SFES, the sentiment is Neutral. The current price of 0.81 is above the 20-day moving average (MA) of 0.79, below the 50-day MA of 0.86, and below the 200-day MA of 0.86, indicating a neutral trend. The MACD of -0.01 indicates Negative momentum. The RSI at 50.88 is Neutral, neither overbought nor oversold. The STOCH value of 63.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SFES.

Safeguard Scientifics Risk Analysis

Safeguard Scientifics disclosed 28 risk factors in its most recent earnings report. Safeguard Scientifics 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 3 New Risks
1.
We have undertaken actions to effect a "going dark" transaction, including delisting our common stock from trading on The Nasdaq Stock Market LLC ("Nasdaq"), terminating the registration of our common stock under Sections 12(b) and 12(g) of the Exchange Act and suspending our reporting obligations under Section 15(d) of the Exchange Act. Q4, 2023
2.
We are managed by a third-party service provider and our success in executing our strategy is dependent on such service provider. Q4, 2023
3.
Non-performance by the subtenant of our previous office space could adversely affect us. Q4, 2023

Safeguard Scientifics Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
64
Neutral
$6.65B10.946.59%5.05%24.65%0.99%
49
Neutral
$11.12M-16.53%918.11%-230.11%
47
Neutral
$23.75M108.82-2.51%0.16%141.03%90.61%
PWPWM
43
Neutral
$12.88M
42
Neutral
$13.55M-67.22%-3.54%
CWCWD
42
Neutral
$4.74M-5013.15%-57.33%-27.24%
34
Underperform
$2.49M-538.85%78.84%97.65%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SFES
Safeguard Scientifics
0.81
0.00
0.00%
MAAS
Highest Performances Holdings
3.35
-33,206.65
-99.99%
RMCO
Royalty Management Holding
1.59
0.77
93.90%
BENF
Beneficient
0.29
-3.64
-92.62%
CWD
CaliberCos, Inc. Class A
3.59
-13.14
-78.54%
PWM
Prestige Wealth, Inc.
0.41
-0.48
-53.93%
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: May 02, 2025