Sono-Tek (SOTK) AI Stock Analysis

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Sono-Tek

(NASDAQ:SOTK)

56Neutral

Sono-Tek's strong revenue growth and solid balance sheet provide a stable foundation, but challenges in operational efficiency and cash flow limit upside potential. Technical analysis indicates weak momentum, and the high P/E ratio suggests overvaluation risks. Corporate events support the growth narrative but are already reflected in the financial performance.

Sono-Tek (SOTK) vs. S&P 500 (SPY)

Market Cap

$55.92M

Dividend YieldN/A

Average Volume (3M)6.30K

Price to Earnings (P/E)50.8

Beta (1Y)0.73

Revenue Growth8.40%

EPS Growth-18.22%

CountryUS

Employees82

SectorTechnology

Sector Strength40

IndustryHardware, Equipment & Parts

Share Statistics

EPS (TTM)0.07

Shares Outstanding15,751,153

10 Day Avg. Volume5,977

30 Day Avg. Volume6,296

Financial Highlights & Ratios

PEG Ratio0.41

Price to Book (P/B)N/A

Price to Sales (P/S)2.88

Price to Cash Flow (P/CF)11.30

P/FCF Ratio13.50

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Sono-Tek Business Overview & Revenue Model

Company DescriptionSono-Tek Corporation designs and manufactures ultrasonic coating systems for applying on parts and components for the microelectronics/electronics, alternative energy, medical, industrial, and research and development/other markets worldwide. It also designs and manufactures custom-engineered ultrasonic coating systems; and provides nozzles and generators for manufacturers' equipment. The company's products include integrated multi-axis coating systems, integrated coating systems, fluxing systems, OEM systems, and other related systems. It markets and distributes its products through independent distributors and sales representatives. The company was incorporated in 1975 and is based in Milton, New York.

How the Company Makes MoneySono-Tek generates revenue primarily through the sale of its ultrasonic coating systems and related equipment. The company's key revenue streams include direct sales to manufacturers, integrators, and other businesses that require advanced coating solutions. Additionally, Sono-Tek offers technical support, maintenance, and consulting services, which provide recurring revenue. Significant partnerships with companies in sectors such as medical devices and electronics also contribute to its earnings by expanding market reach and enhancing product offerings. By focusing on innovation and customization, Sono-Tek maintains a competitive edge, allowing it to capture a diverse customer base across global markets.

Sono-Tek Financial Statement Overview

Summary

Sono-Tek exhibits strong revenue growth and a healthy balance sheet with no debt, which is a significant strength. However, there are challenges in operational efficiency and cash flow generation, as reflected by lower profit margins and cash flow ratios. Overall, the company's financial health is stable with potential for operational improvements.

Income Statement

Positive

Sono-Tek has demonstrated solid revenue growth with a Revenue Growth Rate of 32.2% from 2023 to 2024 TTM. The Gross Profit Margin for the TTM is 47.9%, indicating strong profitability, although slightly reduced from previous years. The Net Profit Margin stands at 5.5% TTM, reflecting some profitability challenges. The EBIT and EBITDA margins are 3.5% and 6.0% respectively, suggesting room for improvement in operational efficiency.

Balance Sheet

Very Positive

The company maintains a robust financial position with a Debt-to-Equity Ratio of 0, indicating no leverage risk. The Equity Ratio is 71.5% TTM, highlighting financial stability. Return on Equity (ROE) is 6.3% TTM, which shows a moderate return to shareholders. Overall, the balance sheet reflects strong equity and low financial risk.

Cash Flow

Positive

Free Cash Flow Growth Rate is 34.6% TTM, showing a positive trend in free cash generation. However, the Operating Cash Flow to Net Income Ratio of 0.8 TTM indicates less cash being generated from operations relative to net income. The Free Cash Flow to Net Income Ratio of 0.05 TTM is low, suggesting challenges in translating profits into free cash flow.

TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Breakdown
Income Statement		Total Revenue
20.15M	19.70M	15.06M	17.13M	14.83M	15.35M
	Gross Profit
9.65M	9.84M	7.65M	8.61M	7.00M	7.31M
	EBIT
709.65K	1.18M	682.99K	1.89M	1.34M	1.12M
	EBITDA
1.41M	1.78M	1.19M	2.32M	1.80M	1.52M
	Net Income Common Stockholders
1.10M	1.44M	635.90K	2.54M	1.12M	1.11M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.79M	11.85M	11.44M	10.71M	8.65M	7.88M
	Total Assets
5.18M	23.13M	20.17M	17.63M	16.42M	14.74M
	Total Debt
369.35K	0.00	0.00	0.00	1.00M	707.72K
	Net Debt
-1.42M	-2.13M	-3.35M	-4.84M	-3.08M	-2.95M
	Total Liabilities
1.51M	6.85M	5.54M	3.88M	5.47M	4.96M
	Stockholders Equity
3.67M	16.28M	14.63M	13.74M	10.95M	9.78M
Cash Flow		Free Cash Flow
49.70K	369.18K	769.17K	1.99M	374.83K	2.53M
	Operating Cash Flow
920.86K	1.16M	1.33M	2.32M	725.19K	3.25M
	Investing Cash Flow
4.20M	-2.38M	-2.81M	-1.63M	-594.58K	-2.58M
	Financing Cash Flow
0.00	0.00	0.00	68.78K	293.92K	-162.81K

Sono-Tek Technical Analysis

Technical Analysis Sentiment

Negative

Last Price3.55

Price Trends

50DMA

3.76

Negative

100DMA

4.07

Negative

200DMA

4.10

Negative

Market Momentum

MACD

-0.05

Negative

RSI

47.81

Neutral

STOCH

35.72

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SOTK, the sentiment is Negative. The current price of 3.55 is below the 20-day moving average (MA) of 3.63, below the 50-day MA of 3.76, and below the 200-day MA of 4.10, indicating a bearish trend. The MACD of -0.05 indicates Negative momentum. The RSI at 47.81 is Neutral, neither overbought nor oversold. The STOCH value of 35.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SOTK.

Sono-Tek Risk Analysis

Sono-Tek disclosed 35 risk factors in its most recent earnings report. Sono-Tek 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 0 New Risks

Sono-Tek Peers Comparison

Overall Rating

UnderperformOutperform

Sector (57)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ONTO	70 Outperform	$5.15B	25.72	11.01%	―	21.01%	65.27%
MKSI	65 Neutral	$4.07B	21.45	7.93%	1.46%	-0.99%	―
FORM	63 Neutral	$1.86B	27.24	7.50%	―	15.16%	-15.16%
Sector *	57 Neutral	$18.54B	9.84	-14.38%	2.71%	5.07%	-23.65%
SOTK	56 Neutral	$55.92M	50.79	6.59%	―	8.40%	-18.22%
KLIC	50 Neutral	$1.55B	245.95	0.31%	2.78%	-4.92%	-85.39%
COHU	46 Neutral	$622.71M	―	-7.73%	―	-36.86%	-351.11%

* Technology Sector Average

Performance Comparison

SOTK

Sono-Tek

3.55

-0.97

-21.46%

COHU

Cohu

13.38

-19.04

-58.73%

FORM

Formfactor

24.17

-22.81

-48.55%

KLIC

Kulicke & Soffa

29.12

-18.61

-38.99%

MKSI

MKS Instruments

60.29

-67.18

-52.70%

ONTO

Onto Innovation

104.44

-85.44

-45.00%

Sono-Tek Earnings Call Summary

Earnings Call Date: Jan 13, 2025 | % Change Since: -9.44% | Next Earnings Date: May 22, 2025

Earnings Call Sentiment Positive

Sono-Tek's earnings call demonstrated strong growth and strategic success, especially in the clean energy sector, with record backlog and significant order sizes. Despite challenges in certain geographical regions and market segments, the company's investments and strategic shifts are yielding positive results.

Highlights

Record Backlog and Largest Orders in History

Sono-Tek reported a record backlog of $11.7 million, a 26% increase from the end of last year and the highest in the company's history. Additionally, they received two orders of $2.95 million each, the largest in Sono-Tek's history.

Significant Growth in Clean Energy Sector

Sales to the alternative clean energy market grew by 37% in Q2 over the prior year quarter and 80% in the first 6 months compared to the prior year. This growth is driven by transitions from R&D to production scale systems.

10% Revenue Growth in First Half

Sono-Tek experienced a 10% growth in revenue for the first half of fiscal year 2025, strongly influenced by the clean energy sector.

Increased Investments Paying Off

Investments in R&D and market expansion have resulted in higher average selling prices for systems and expanded market reach.

Lowlights

Decreased Sales in APAC and Latin America

APAC sales decreased by 32% in Q2 and 21% for the first half of fiscal 2025. Latin America sales were down 78% in Q2 and 65% in the first half, primarily due to non-repeating large orders from the previous year.

Decline in Fluxing Systems and OEM Sales

Fluxing systems saw a decline due to softening activity in the printed circuit board sector and the struggling Chinese economy. OEM sales were also lower, attributed to excess inventory build-up and declining sales in China.

Decreased Medical Sales

Medical sales declined by 7% in the first half of FY 2025, driven by lower demand for stent and balloon coating systems.

Company Guidance

During the earnings call for Sono-Tek's fiscal second quarter and first half of 2025, the company reported a 10% increase in total sales, reaching approximately $10.2 million, largely driven by the delivery of three integrated coating systems totaling $2.19 million to the clean energy sector. The backlog increased by 26% to a record $11.7 million, signaling strong future prospects, particularly in clean energy applications such as solar cells and carbon capture. Despite an 8% decrease in net sales for the quarter compared to the previous year, sequential growth of 3% aligned with prior guidance. The company also saw a 13% increase in net income for the first half, reflecting strategic investments in high ASP systems. As Sono-Tek continues to focus on production applications and new markets, it anticipates sustained growth and profitability for the full fiscal year 2025.

Sono-Tek Corporate Events

Business Operations and StrategyFinancial Disclosures

Sono-Tek Reports Strong Revenue and Growth in 2025

Positive

Jan 13, 2025

Sono-Tek Corporation reported financial results for the third quarter and nine months of fiscal 2025, highlighting a consistent revenue stream exceeding $5 million for the third consecutive quarter and a 3% year-over-year growth in the first nine months. Despite lower sales in certain regions, the company maintained a strong backlog of $10.6 million, with expectations for over $20 million in revenue and continued profitability for the fiscal year, driven by increased demand in the alternative/clean energy market and advancements in multi-axis coating systems.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.