Spar Group (SGRP) AI Stock Analysis

• Market Cap: $27.48M
• Dividend Yield: N/A
• Average Volume (3M): 86.52K
• Price to Earnings (P/E): 2.1
• Beta (1Y): -0.27
• Revenue Growth: -39.28%
• EPS Growth: -197.70%
• Country: US
• Employees: 1,384
• Sector: Industrials
• Sector Strength: 84
• Industry: Specialty Business Services
• EPS (TTM): 0.02
• Shares Outstanding: 23,489,752
• 10 Day Avg. Volume: 60,465
• 30 Day Avg. Volume: 86,516
• PEG Ratio: 0.08
• Price to Book (P/B): 1.88
• Price to Sales (P/S): 0.23
• P/FCF Ratio: -25.33
• Enterprise Value/Market Cap: 2.17
• Enterprise Value/Revenue: 0.37
• Enterprise Value/Gross Profit: 1.00
• Enterprise Value/Ebitda: 44.87
• 1Y Price Target: $1.00
• Price Target Upside: -14.53% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 48 Neutral
• Price Target: $1.00 ▼(-14.53% Downside)

Spar Group's overall stock score is primarily impacted by its financial performance challenges, including declining revenue and profitability issues. Technical analysis shows some positive momentum, but valuation concerns and negative corporate events further weigh down the score.

Spar Group Business Overview & Revenue Model

Company Description

SPAR Group, Inc., together with its subsidiaries, provides merchandising and brand marketing services worldwide. The company offers syndicated and dedicated merchandising services at the retail store level for retailers, manufacturers, and distributors; and project services, such as new product launches, special seasonal or promotional merchandising, product support, product recalls, and in-store product demonstrations and in-store product sampling, as well as kiosk product replenishment, inventory control, new and existing store resets, re-merchandising, remodels and category implementations, and under annual or stand-alone project contracts or agreements. It also provides retailer specific services consisting of in-store services, including new store openings, new store sets and existing store resets and remodels, and under annual or stand-alone project contracts or agreements. In addition, the company assembles furniture, grills, and other products in stores, homes, and offices; performs ongoing routed coverage at retail locations; and offers in-home and in-office assembly to customers who purchase their product from retailers. Further, it provides staff and distribution center experienced resources to retailers and consumer goods manufacturers; offers retail compliance and price audit services initiated by retailers and manufacturers and focuses on validating store promotions, auditing compliance with branding and signage, verifying product placement and displays, collecting inventory levels, and out-of-stock status; and competitive price intelligence gathering for retailers, as well as ensuring price accuracy and consistency within the retail itself. The company serves grocery and drug, discount, dollar, convenience, cash and carry, home improvement, consumer electronics, automotive, and office supply stores; pharmacies; and mass merchandisers. SPAR Group, Inc. was founded in 1967 and is headquartered in Auburn Hills, Michigan.

How the Company Makes Money

Spar Group generates revenue through multiple key streams, primarily by offering comprehensive merchandising and marketing services to consumer goods manufacturers and retailers. The company earns fees for its services, which include in-store product placement, promotional displays, and brand representation. Additionally, SGRP benefits from performance-based incentives tied to sales growth and product turnover. Strategic partnerships with major retail chains enhance its market presence, while its extensive network of field representatives enables efficient execution of marketing campaigns, driving both client satisfaction and repeat business.

Spar Group Financial Statement Overview

Summary

Spar Group faces financial challenges with declining revenue, profitability issues, and weak cash flow performance. The balance sheet shows moderate leverage, but negative return on equity and cash flow difficulties highlight the need for strategic improvements.

Income Statement

Spar Group's income statement reveals declining revenue with a negative growth rate of -14.0% in 2024, indicating a challenging business environment. The gross profit margin decreased to 19.5% from 21.1% in 2023, and the net profit margin turned negative at -1.6%, reflecting profitability issues. EBIT and EBITDA margins also declined significantly, suggesting operational inefficiencies.

Balance Sheet

The balance sheet shows a moderate debt-to-equity ratio of 0.78, indicating manageable leverage. However, the return on equity is negative at -12.96%, highlighting poor profitability. The equity ratio stands at 43.1%, suggesting a stable capital structure but with room for improvement in asset utilization.

Cash Flow

Cash flow analysis indicates significant challenges, with a negative free cash flow growth rate of -153.3% in 2024. The operating cash flow to net income ratio is negative, reflecting cash flow issues. Despite a high free cash flow to net income ratio, the overall cash flow position is weak, signaling liquidity concerns.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	162.16M	196.81M	262.75M	261.27M	255.72M	230.52M
Gross Profit	59.75M	38.46M	55.48M	51.01M	47.52M	45.19M
EBITDA	1.33M	2.91M	10.18M	8.55M	7.90M	14.14M
Net Income	-9.31M	-3.15M	3.90M	2.13M	2.00M	8.96M
Balance Sheet
Total Assets	70.16M	56.43M	90.28M	94.60M	89.02M	84.03M
Cash, Cash Equivalents and Short-Term Investments	17.94M	18.22M	10.72M	9.35M	13.47M	15.97M
Total Debt	23.15M	18.93M	23.37M	20.32M	13.52M	13.23M
Total Liabilities	45.46M	32.13M	50.03M	56.54M	51.67M	45.41M
Stockholders Equity	24.71M	24.31M	28.23M	22.43M	19.75M	22.16M
Cash Flow
Free Cash Flow	-6.56M	-1.80M	5.58M	-6.84M	907.00K	7.20M
Operating Cash Flow	-5.32M	-665.00K	6.82M	-5.04M	2.63M	8.80M
Investing Cash Flow	10.23M	9.88M	-2.27M	-1.80M	-1.72M	-1.60M
Financing Cash Flow	-3.71M	-1.66M	-3.02M	3.49M	1.33M	131.00K

Spar Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1.17
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SGRP, the sentiment is Positive. The current price of 1.17 is above the 20-day moving average (MA) of 1.12, above the 50-day MA of 1.06, and below the 200-day MA of 1.55, indicating a neutral trend. The MACD of 0.03 indicates Negative momentum. The RSI at 62.31 is Neutral, neither overbought nor oversold. The STOCH value of 65.45 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SGRP.

Spar Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DLHC	64 Neutral	$79.13M	17.36	4.12%	―	-10.30%	86.44%
Sector *	64 Neutral	$10.70B	16.30	6.50%	2.13%	2.67%	-20.48%
NTIP	57 Neutral	$32.67M	―	-5.10%	6.97%	-92.03%	-20.56%
OMEX	54 Neutral	$52.02M	―		―	-2.44%	―
CVEO	52 Neutral	$292.83M	19.41	-13.15%	4.29%	-10.60%	-201.64%
SGRP	48 Neutral	$27.48M	2.10	-32.31%	―	-39.28%	-197.70%
SST	42 Neutral	$53.75M	―	-84.85%	―	-12.76%	56.53%

Spar Group Corporate Events

Spar Group Faces Mixed Results at Annual Meeting

On June 12, 2025, Spar Group held its annual stockholders meeting where several key proposals were voted upon. The reelection of directors saw mixed results, with some directors receiving strong support while others faced significant opposition. Additionally, the proposal to ratify BDO USA, P.C. as the independent registered accounting firm for 2025 was narrowly approved. The advisory vote on executive compensation, however, did not pass, reflecting shareholder concerns. The decision on the frequency of compensation votes was overwhelmingly in favor of an annual vote. Lastly, the 2025 Stock Compensation Plan was not approved, indicating potential dissatisfaction with the proposed plan.

SPAR Group Faces Nasdaq Compliance Deadline

SPAR Group announced that it received a compliance notification from Nasdaq for its timely filing of Form 10-K for the period ended December 31, 2024, after initially failing to do so. However, the company also received a deficiency notice for not filing its Form 10-Q for the quarter ended March 31, 2025, on time. Nasdaq has given SPAR Group 60 days to submit a compliance plan to address this issue, which, if accepted, could extend the deadline to October 13, 2025. The deficiency notice does not immediately affect the trading of SPAR Group’s stock, and the company is actively working to resolve the issue.

Spar Group Terminates Merger Agreement with Highwire

On August 30, 2024, Spar Group entered into a Merger Agreement with Highwire Capital, LLC and its subsidiary, Highwire Merger Co. I, Inc., intending to merge and become a wholly owned subsidiary of Highwire Capital. However, the merger was not completed by the deadline of May 22, 2025, leading Spar Group to terminate the agreement on May 23, 2025. As a result of the termination, Highwire Capital is obligated to pay a termination fee to Spar Group by May 28, 2025.

Spar Group Appoints New Directors Amid Highwire Plans

On May 6, 2025, the Board of Directors of SGRP appointed Mr. James R. Brown, Sr. and Mr. Panagiotis Lazaretos to fill the vacant Brown Board Seats, as nominated by Mr. Robert G. Brown under the CIC Agreement. This move comes ahead of the company’s planned Highwire transaction and a potential shareholder meeting on June 12, 2025, highlighting the Board’s commitment to fulfilling its obligations under the agreement.