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Smith Micro Software (SMSI)
NASDAQ:SMSI
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Smith Micro Software (SMSI) AI Stock Analysis

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SMSI

Smith Micro Software

(NASDAQ:SMSI)

Rating:43Neutral
Price Target:
$1.00
▲(33.33%Upside)
Smith Micro Software's overall stock score is primarily impacted by its financial struggles, including declining revenues and negative cash flow, which are compounded by bearish technical indicators. Although strategic initiatives like SafePath 8 offer potential growth, the significant revenue decline and Nasdaq non-compliance concerns weigh heavily. The new executive appointments provide a slight positive counterbalance, but substantial challenges remain.

Smith Micro Software (SMSI) vs. SPDR S&P 500 ETF (SPY)

Smith Micro Software Business Overview & Revenue Model

Company DescriptionSmith Micro Software (SMSI) develops software solutions for wireless and cable service providers, mobile device manufacturers, and enterprises. The company focuses on creating products that enhance the user experience and optimize network performance. Its core offerings include family safety and location services, secure data management, and internet of things (IoT) solutions that enable connected devices to interact seamlessly.
How the Company Makes MoneySmith Micro Software makes money primarily through the sale of its software solutions and services to service providers, device manufacturers, and enterprises. The company generates revenue by licensing its software and by providing maintenance and support services. Key revenue streams include subscriptions for family safety applications, fees for IoT solutions, and partnerships with wireless carriers and cable operators who integrate Smith Micro's technology into their offerings. Additionally, the company may benefit from strategic alliances that enhance its market reach and product offerings.

Smith Micro Software Earnings Call Summary

Earnings Call Date:May 07, 2025
(Q1-2025)
|
% Change Since: -27.88%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant advancements in product development, particularly with the upcoming launch of SafePath 8 and its AI features. The company also made strides in reducing operating expenses and improving gross margins. However, the overall sentiment is tempered by a notable decline in revenue across several segments and a continued net loss. Despite the challenges, the company's strategic initiatives and new engagements provide optimism for future growth.
Q1-2025 Updates
Positive Updates
SafePath 8 Launch and AI Features
The company announced the upcoming release of SafePath 8, which will introduce AI-centric features like social media intelligence, dynamic age-aware settings, and family AI assistance aimed at enhancing family safety and digital wellness.
CommSuite Revenue Increase
CommSuite revenue increased by approximately $100,000 compared to the first quarter of 2024.
Reduction in GAAP Operating Expenses
GAAP operating expenses for the first quarter of 2025 were $8.6 million, a 76% decrease compared to the first quarter of 2024, primarily due to a $24 million goodwill impairment charge recorded in 2024 and cost reduction activities.
Non-GAAP Operating Expenses Reduction
Non-GAAP operating expenses decreased by approximately $2 million or 24% compared to the first quarter of 2024.
Gross Margin Improvement
The gross margin improved to 73% for the quarter compared to 66% in the first quarter of 2024.
New Carrier Engagements and Trials
Smith Micro is involved in new trials with mobile operators throughout Europe and maintains strong engagements with key U.S. partners like AT&T and T-Mobile, which have shown interest in their expanded SafePath solutions.
Negative Updates
Overall Revenue Decline
Revenue decreased to $4.6 million, a decrease of approximately 20% compared to the first quarter of 2024, and a 7% decrease from the fourth quarter of 2024.
Family Safety Revenue Decline
Family Safety revenues were $3.8 million, a decrease of approximately $700,000 or 15% compared to the first quarter of the prior year, driven by the decline in legacy Sprint Safe & Found revenue.
ViewSpot Revenue Decline
ViewSpot revenue was approximately $100,000 for the first quarter of 2025, declining by approximately $600,000 compared to the first quarter of the prior year, due to the end of a ViewSpot contract.
Net Loss
GAAP net loss for the first quarter of 2025 was $5.2 million or $0.28 loss per share, though this was an improvement from a $31 million loss in the first quarter of 2024.
Company Guidance
During Smith Micro's first quarter 2025 earnings call, several key financial metrics and strategic initiatives were discussed. The company reported a revenue of $4.6 million, marking a 20% decrease from the previous year. Family Safety revenues were $3.8 million, a 15% decline attributed to the continued drop in legacy Sprint Safe & Found revenue. CommSuite revenue increased by $100,000 year over year to $700,000, while ViewSpot revenue fell by $600,000 to $100,000 due to the end of a contract. Gross profit was $3.4 million, with a gross margin of 73%. Operating expenses decreased significantly due to a prior goodwill impairment charge, with GAAP operating expenses at $8.6 million and non-GAAP expenses at $6.1 million. The GAAP net loss was $5.2 million, or $0.28 per share, while the non-GAAP net loss was $2.9 million, or $0.16 per share. Looking ahead, the company anticipates second-quarter revenues between $4.4 million and $4.8 million, with a gross margin ranging from 72% to 75%. Smith Micro is also focused on launching SafePath 8, which will integrate AI to enhance family safety solutions, and is optimistic about future growth prospects with new product developments and market opportunities.

Smith Micro Software Financial Statement Overview

Summary
Smith Micro Software faces significant financial challenges with declining revenues and persistent net losses impacting profitability and shareholder value. Despite a strong capital structure with low debt, the company struggles with cash flow generation, necessitating strategic measures to improve operational efficiency and enhance financial stability.
Income Statement
45
Neutral
Smith Micro Software has experienced declining revenues with a significant drop from $48.5M in 2022 to $19.4M TTM. The gross profit margin stands at 72.1% TTM, indicating effective cost management, but the company faces challenges with profitability as highlighted by a net profit margin of -118.0% TTM. The EBIT and EBITDA margins are also negative, reflecting underlying operational inefficiencies affecting profitability.
Balance Sheet
50
Neutral
The company's debt-to-equity ratio is low at 0.06 TTM, suggesting limited leverage which is favorable. However, the return on equity (ROE) is negative at -62.6% TTM due to losses, indicating the company is not generating returns for shareholders. The equity ratio remains strong at 84.3% TTM, reflecting a solid capital structure with low reliance on debt.
Cash Flow
40
Negative
Smith Micro Software's free cash flow is negative at -$13.6M TTM, showing challenges in generating cash from operations. The operating cash flow to net income ratio is 0.59 TTM, suggesting cash burn issues despite reduced operational losses. The company needs to improve cash generation to support its operations and growth.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue20.55M40.86M48.51M58.42M51.30M
Gross Profit14.43M30.30M34.30M45.72M46.11M
EBITDA-42.31M-10.49M-17.67M-7.24M3.52M
Net Income-48.70M-24.40M-29.28M-31.04M4.17M
Balance Sheet
Total Assets48.05M85.58M103.58M115.36M72.90M
Cash, Cash Equivalents and Short-Term Investments2.81M7.13M14.03M16.08M25.75M
Total Debt2.57M3.26M13.42M5.87M6.24M
Total Liabilities7.29M10.19M27.20M14.80M14.19M
Stockholders Equity40.76M75.39M76.38M100.56M58.72M
Cash Flow
Free Cash Flow-14.31M-6.98M-19.31M-13.75M6.60M
Operating Cash Flow-14.29M-6.97M-19.26M-12.92M7.92M
Investing Cash Flow178.00K132.00K115.00K-57.50M-14.68M
Financing Cash Flow9.80M-60.00K17.09M60.74M4.24M

Smith Micro Software Technical Analysis

Technical Analysis Sentiment
Negative
Last Price0.75
Price Trends
50DMA
0.89
Negative
100DMA
0.90
Negative
200DMA
1.00
Negative
Market Momentum
MACD
-0.02
Positive
RSI
37.15
Neutral
STOCH
7.46
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SMSI, the sentiment is Negative. The current price of 0.75 is below the 20-day moving average (MA) of 0.92, below the 50-day MA of 0.89, and below the 200-day MA of 1.00, indicating a bearish trend. The MACD of -0.02 indicates Positive momentum. The RSI at 37.15 is Neutral, neither overbought nor oversold. The STOCH value of 7.46 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SMSI.

Smith Micro Software Risk Analysis

Smith Micro Software disclosed 28 risk factors in its most recent earnings report. Smith Micro Software reported the most risks in the "Tech & Innovation" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Smith Micro Software Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
63
Neutral
$34.70B5.15-11.38%1.67%5.54%-17.15%
59
Neutral
$7.57M-21.35%-4.85%43.93%
58
Neutral
$53.25M86.76%9.71%-1.97%
51
Neutral
$11.64M163.42%-30.70%82.02%
49
Neutral
$15.77M-501.24%141.65%60.23%
43
Neutral
$15.79M-55.77%-45.77%67.69%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SMSI
Smith Micro Software
0.79
-1.78
-69.26%
DTSS
Datasea
2.06
-0.69
-25.09%
KPLT
Katapult Holdings
12.88
-6.91
-34.92%
MITQ
Moving iMage Technologies
0.76
0.10
15.15%
HUBC
Hub
3.55
-3.70
-51.03%

Smith Micro Software Corporate Events

Private Placements and FinancingRegulatory Filings and Compliance
Smith Micro Software Announces Securities Purchase Agreement
Neutral
Jul 18, 2025

On July 17, 2025, Smith Micro Software, Inc. announced a securities purchase agreement with institutional and accredited investors for a registered direct offering and concurrent private placement, resulting in gross proceeds of approximately $1.5 million. The offering included 1,612,903 shares of common stock and unregistered warrants to purchase an equal number of shares, with the proceeds intended for working capital and general corporate purposes. The transaction, which closed on July 18, 2025, is expected to impact the company’s operations by providing additional financial resources, while also adhering to Nasdaq listing standards by seeking stockholder approval for certain issuance limitations.

The most recent analyst rating on (SMSI) stock is a Buy with a $5.00 price target. To see the full list of analyst forecasts on Smith Micro Software stock, see the SMSI Stock Forecast page.

Delistings and Listing ChangesRegulatory Filings and Compliance
Smith Micro Software Faces Nasdaq Non-Compliance Notice
Negative
Jun 24, 2025

On June 23, 2025, Smith Micro Software received a notice from Nasdaq indicating non-compliance with the minimum bid price requirement, as its stock price had been below $1.00 for 30 consecutive business days. The company has until December 22, 2025, to regain compliance, with the possibility of an additional 180-day period if certain conditions are met. Smith Micro intends to monitor its stock price and explore options to meet the listing requirements, although there is no assurance of compliance.

The most recent analyst rating on (SMSI) stock is a Buy with a $5.00 price target. To see the full list of analyst forecasts on Smith Micro Software stock, see the SMSI Stock Forecast page.

Executive/Board Changes
Smith Micro Software Appoints New COO and CFO
Positive
May 27, 2025

On May 27, 2025, Smith Micro Software announced the appointment of Timothy C. Huffmyer as Vice President, Chief Operating Officer, and Chief Financial Officer, effective June 9, 2025. Huffmyer, who previously served as the company’s CFO, will succeed James M. Kempton and bring his extensive experience from Urgent.ly Inc. and Black Box Corporation to drive Smith Micro’s growth and profitability.

The most recent analyst rating on (SMSI) stock is a Buy with a $5.00 price target. To see the full list of analyst forecasts on Smith Micro Software stock, see the SMSI Stock Forecast page.

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: Jul 24, 2025