SmartKem (SMTK) AI Stock Analysis

• Market Cap: $9.32M
• Dividend Yield: N/A
• Average Volume (3M): 345.23K
• Price to Earnings (P/E): ―
• Beta (1Y): -0.43
• Revenue Growth: 345.00%
• EPS Growth: -13.31%
• Country: US
• Employees: 27
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): -0.45
• Shares Outstanding: 5,479,787
• 10 Day Avg. Volume: 406,804
• 30 Day Avg. Volume: 345,225
• PEG Ratio: 0.02
• Price to Book (P/B): 1.43
• Price to Sales (P/S): 115.30
• P/FCF Ratio: -1.16
• Enterprise Value/Market Cap: 0.82
• Enterprise Value/Revenue: 43.05
• Enterprise Value/Gross Profit: -69.04
• Enterprise Value/Ebitda: -0.60
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 41 Neutral
• Price Target: $1.50 ▼(-11.76% Downside)

SmartKem's overall stock score is primarily impacted by its poor financial performance and valuation. The company faces significant profitability and cash flow challenges, reflected in its negative P/E ratio and reliance on external financing. Technical analysis provides mixed signals, with bearish momentum indicated by moving averages and MACD. The lack of earnings call data and negative sentiment from recent corporate events further weigh on the score.

Positive Factors

Revenue Growth

The significant revenue increase indicates potential market acceptance and growth opportunities in the organic semiconductor sector.

Low Debt Levels

Low debt levels provide financial flexibility and reduce risk, enabling SmartKem to invest in growth and innovation without heavy interest burdens.

Strategic Partnerships

Potential partnerships could enhance market reach and technological capabilities, supporting long-term growth and competitive positioning.

Negative Factors

Cash Flow Challenges

Ongoing cash flow issues indicate difficulties in sustaining operations and funding growth, potentially leading to increased reliance on external financing.

Profitability Issues

Persistent losses highlight challenges in achieving profitability, which could impact long-term viability and investor confidence.

Operational Constraints

Operational reductions and payment delays suggest financial distress, potentially affecting supply chain relationships and operational efficiency.

SmartKem Business Overview & Revenue Model

Company Description

SmartKem, Inc. engages in the development of materials and processes for organic thin-film transistors backplanes for the manufacture of flexible electronics. Its transistor stacks are used in various applications, including bendable smart-phone displays, curved automotive displays, e-paper displays, wearables, fingerprint sensors, and printed biosensors. SmartKem, Inc. was founded in 2009 and is headquartered in Manchester, the United Kingdom.

How the Company Makes Money

SmartKem generates revenue through the sale of its proprietary organic semiconductor materials and technologies. The company's revenue model is primarily based on direct sales of its products to manufacturers of electronic devices, as well as licensing agreements that allow partners to utilize its technology in their own products. Key revenue streams include contract manufacturing, R&D collaborations with major players in the electronics industry, and partnerships with universities and research institutions aimed at advancing organic electronics. Additionally, SmartKem may benefit from joint ventures and strategic alliances that enhance its market reach and product development capabilities.

SmartKem Financial Statement Overview

Summary

SmartKem is experiencing financial difficulties, marked by ongoing losses and cash flow challenges. While there is some revenue growth and manageable debt levels, persistent net losses and negative cash flows indicate the company is struggling to achieve profitability. The reliance on financing activities for cash flow support raises concerns about sustainable operations in the semiconductor industry.

Income Statement

SmartKem shows a trend of volatile and negative net income over recent years, with a significant net loss of -$10.33M in 2024. Revenue growth is inconsistent, with a notable increase from $27K in 2023 to $82K in 2024, but gross profit margins are low, indicating cost challenges. EBIT and EBITDA margins are negative, further highlighting profitability issues.

Balance Sheet

The company's balance sheet reflects a low debt-to-equity ratio due to minimal total debt and a positive stockholders' equity of $6.59M in 2024. However, the equity ratio is weakened by decreasing total assets over the years. The company maintains a strong cash position, with cash and short-term investments covering liabilities, but overall financial stability is compromised by historical losses.

Cash Flow

SmartKem's cash flow situation is concerning, with negative free cash flow reported at -$8.17M in 2024. Operating cash flow is also negative, indicating cash generation issues, while significant financing activities suggest reliance on external funding. The lack of free cash flow growth underscores ongoing cash management challenges.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	178.00K	82.00K	27.00K	40.00K	18.00K	94.00K
Gross Profit	-111.00K	50.00K	4.00K	7.00K	10.00K	39.00K
EBITDA	-12.79M	-9.86M	-9.50M	-9.23M	-16.66M	-15.93M
Net Income	-11.15M	-10.33M	-8.50M	-11.49M	-17.14M	-23.13M
Balance Sheet
Total Assets	3.25M	8.90M	11.27M	7.53M	15.06M	2.95M
Cash, Cash Equivalents and Short-Term Investments	881.00K	7.14M	8.84M	4.24M	12.23M	763.81K
Total Debt	650.00K	72.00K	249.00K	465.00K	125.00K	244.10K
Total Liabilities	6.20M	2.31M	3.16M	1.64M	1.54M	1.10M
Stockholders Equity	-2.95M	6.59M	8.11M	5.88M	13.52M	1.85M
Cash Flow
Free Cash Flow	-7.50M	-8.17M	-8.05M	-9.13M	-10.88M	-4.20M
Operating Cash Flow	-7.39M	-8.10M	-8.04M	-9.05M	-10.54M	-4.08M
Investing Cash Flow	-107.75K	-75.00K	-18.00K	-79.00K	-341.00K	-118.00K
Financing Cash Flow	6.53M	6.53M	12.69M	1.83M	22.20M	4.59M

SmartKem Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1.70
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SMTK, the sentiment is Positive. The current price of 1.7 is above the 20-day moving average (MA) of 1.51, below the 50-day MA of 1.85, and above the 200-day MA of 1.68, indicating a neutral trend. The MACD of -0.03 indicates Negative momentum. The RSI at 54.25 is Neutral, neither overbought nor oversold. The STOCH value of 82.54 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SMTK.

SmartKem 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%
VLN	51 Neutral	$162.76M	-5.50	-23.56%	―	7.53%	-15.00%
PRSO	51 Neutral	$9.74M	-1.11	-180.20%	―	2.15%	94.29%
PXLW	46 Neutral	$38.14M	-1.29	―	―	-38.72%	16.01%
LEDS	45 Neutral	$14.89M	-13.26	-45.37%	―	729.81%	61.92%
SQNS	43 Neutral	$92.77M	―	-18.19%	―	2.80%	―
SMTK	41 Neutral	$9.32M	-0.37	―	―	345.00%	-13.31%

SmartKem Corporate Events

SmartKem Extends Exclusivity Period with Jericho Energy

SmartKem, Inc. announced an amendment to its non-binding letter of intent with Jericho Energy Ventures Inc. regarding a potential business combination. The amendment extends the exclusivity period for negotiations to February 3, 2026, and the deadline for SmartKem to purchase $500,000 of Jericho’s common shares to December 31, 2025, impacting the timeline and conditions of the proposed transaction.

SmartKem Enters Securities Purchase Agreement for Capital

On October 31, 2025, SmartKem, Inc. entered into a securities purchase agreement involving the issuance of Senior Secured Notes and Warrants to raise capital. The company has significantly reduced its operations and delayed vendor payments due to capital constraints, leading to increased accounts payable since June 30, 2025. SmartKem requires additional capital to pay vendors and resume normal operations.

SmartKem Amends Agreement to Lower Issuance Price

On October 13, 2025, SmartKem entered into an Amendment Agreement with certain holders of securities from its June 2023 private placement. The agreement amends the Purchase Agreement to lower the price at which a Lower Price Issuance would occur from $4.00 to $2.75, potentially impacting the company’s financial strategy and stakeholder interests.

SmartKem Announces Investor Relations Agreements

On October 7, 2025, SmartKem, Inc. announced agreements with two consulting firms to provide investor relations services, issuing up to 500,000 shares of common stock as compensation, exempt from registration under the Securities Act. Additionally, SmartKem entered into a non-binding letter of intent with Jericho Energy Ventures Inc. on October 6, 2025, for a potential all-stock business combination, which would result in Jericho stockholders owning 65% of the combined company. The proposed transaction is subject to significant conditions and requires additional capital, with no assurance of completion.