Sono-Tek (SOTK) AI Stock Analysis

• Market Cap: $66.45M
• Dividend Yield: N/A
• Average Volume (3M): 18.53K
• Price to Earnings (P/E): 42.3
• Beta (1Y): 0.63
• Revenue Growth: -0.21%
• EPS Growth: -0.41%
• Country: US
• Employees: 82
• Sector: Technology
• Sector Strength: 88
• Industry: Hardware, Equipment & Parts
• EPS (TTM): 0.02
• Shares Outstanding: 15,710,389
• 10 Day Avg. Volume: 21,366
• 30 Day Avg. Volume: 18,533
• PEG Ratio: -3.88
• Price to Book (P/B): 3.28
• Price to Sales (P/S): 2.84
• P/FCF Ratio: 1.04K
• Enterprise Value/Market Cap: 0.92
• Enterprise Value/Revenue: 3.00
• Enterprise Value/Gross Profit: 6.01
• Enterprise Value/Ebitda: 23.09
• 1Y Price Target: $5.00
• Price Target Upside: 18.20% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1
• EPS Forecast (FY): 0.1
• Revenue Forecast (FY): $21.90M

• Rating: 57 Neutral
• Price Target: $4.00 ▼(-5.44% Downside)
• Action: Reiterated Date: 02/12/26
• Date: Action: Reiterated 02/12/26

The score is held back primarily by weakened recent cash generation and a sharp reported TTM revenue decline, partially offset by a very strong, debt-free balance sheet. Technical signals are neutral-to-soft, and valuation is a headwind due to a high P/E with no dividend support.

Positive Factors

Balance sheet strength

A debt-free balance sheet and rising equity provide durable financial flexibility: the company can fund operations, invest in product development, and absorb cyclical downturns without near-term refinancing risk. This underpins strategic shifts into higher-margin systems and supports opportunistic M&A or capex.

High and stable gross margins

Consistently strong gross margins indicate durable product-level economics and pricing power for ultrasonic coating solutions. Combined with improved operating profitability, this supports reinvestment in R&D and systems sales, helping sustain long-term profitability even if revenue is lumpy.

Backlog and higher-ASP system demand

A record backlog concentrated in high-ASP production systems and growth verticals (medical, electronics) provides near-term revenue visibility and supports the company’s strategic pivot toward higher-margin systems. This structural demand mix should raise average selling prices and stabilize future margin contribution.

Negative Factors

Weakened cash generation

A reversal to negative operating and free cash flow is a durable concern: sustained cash outflows reduce internal funding for working capital, capex, and product development. Even with no debt, prolonged negative cash conversion could force equity raises or constrain growth investments, limiting strategic options.

Revenue volatility and recent decline

Material revenue volatility and a recent sharp TTM decline undermine predictability of earnings and free cash flow. The business depends on sporadic large system orders across end markets, which makes scaling, budgeting, and sustaining consistent margin expansion more challenging over the medium term.

End-market & policy sensitivity

Concentration in policy-sensitive and cyclical end-markets (clean energy, regional swings) creates structural demand risk. Adverse policy or capital-spending shifts can depress orders for high-ASP systems, amplifying revenue lumpiness and making long-term growth contingent on deeper diversification by market or geography.

Sono-Tek Business Overview & Revenue Model

Company Description

Sono-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 Money

Sono-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

Mixed fundamentals: strong debt-free balance sheet and rising equity (low financial risk), but the latest TTM shows a sharp reported revenue decline and negative operating/free cash flow despite still-positive profitability and solid gross margins.

Income Statement

Profitability is solid and fairly consistent at the gross level (~47–51% gross margin across periods), while operating profitability has improved versus earlier years but remains moderate in the most recent results (TTM (Trailing-Twelve-Months) net margin ~7.7% and EBITDA margin ~11.5%). Revenue has been volatile: strong growth in FY2024 and modest growth in FY2025, but TTM (Trailing-Twelve-Months) shows a sharp reported revenue decline, which raises questions about near-term demand/ordering momentum. Overall, the business remains profitable, but the latest growth signal and only mid-level operating margins keep the score in the middle range.

Balance Sheet

The balance sheet is a clear strength: total debt is reported at 0 in the latest periods (and very low historically), resulting in essentially no leverage risk and strong financial flexibility. Equity has grown steadily (from ~$11.0M in FY2021 to ~$19.1M in TTM (Trailing-Twelve-Months)), supporting a stronger capital base. Returns on equity are positive and generally healthy (roughly ~7–9% recently, with a higher peak earlier), though not consistently high enough to be best-in-class. Overall: very low balance-sheet risk with improving net worth.

Cash Flow

Cash generation has weakened materially in the latest period: TTM (Trailing-Twelve-Months) operating cash flow and free cash flow are both negative, a meaningful deterioration from positive operating and free cash flow in prior years. While earlier periods showed adequate cash conversion (operating cash flow positive and generally supportive of earnings), the recent reversal indicates higher working-capital needs and/or heavier investment spending that is currently outpacing internally generated cash. The lack of debt reduces near-term funding pressure, but sustained negative free cash flow would be a key risk to monitor.

Breakdown	TTM	Feb 2025	Feb 2024	Feb 2023	Feb 2022	Feb 2021
Income Statement
Total Revenue	20.42M	20.50M	19.70M	15.06M	17.13M	14.83M
Gross Profit	10.19M	9.74M	9.84M	7.65M	8.61M	7.00M
EBITDA	2.65M	2.23M	2.34M	1.30M	3.34M	1.85M
Net Income	1.58M	1.27M	1.44M	635.90K	2.54M	1.12M
Balance Sheet
Total Assets	23.93M	23.41M	23.13M	20.17M	17.63M	16.42M
Cash, Cash Equivalents and Short-Term Investments	11.72M	11.93M	11.85M	11.44M	10.71M	8.65M
Total Debt	0.00	0.00	0.00	0.00	0.00	1.00M
Total Liabilities	4.80M	5.62M	6.85M	5.54M	3.88M	5.47M
Stockholders Equity	19.13M	17.79M	16.28M	14.63M	13.74M	10.95M
Cash Flow
Free Cash Flow	-811.23K	56.22K	369.18K	769.17K	1.99M	374.83K
Operating Cash Flow	-564.64K	525.02K	1.16M	1.33M	2.32M	725.19K
Investing Cash Flow	-1.99M	2.55M	-2.38M	-2.81M	-1.63M	-594.58K
Financing Cash Flow	-148.38K	-7.87K	0.00	0.00	68.78K	293.92K

Sono-Tek Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4.23
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SOTK, the sentiment is Positive. The current price of 4.23 is above the 20-day moving average (MA) of 4.16, above the 50-day MA of 4.12, and above the 200-day MA of 3.93, indicating a bullish trend. The MACD of 0.03 indicates Negative momentum. The RSI at 53.88 is Neutral, neither overbought nor oversold. The STOCH value of 37.44 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SOTK.

Sono-Tek Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ACFN	72 Outperform	$57.01M	8.59	178.77%	―	30.11%	481.67%
MIND	66 Neutral	$72.03M	20.77	9.37%	―	2.21%	-15.60%
CPSH	64 Neutral	$84.86M	-116.26	-3.84%	―	38.22%	70.68%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
SOTK	57 Neutral	$66.45M	42.26	8.45%	―	-0.21%	-0.41%
OPTX	49 Neutral	$276.90M	-92.36	-27.25%	―	-44.83%	-296.14%
REFR	44 Neutral	$34.66M	-18.33	-87.36%	―	-16.49%	-59.21%

Sono-Tek Corporate Events

Sono-Tek Posts Strong Q3 Profitability Amid Flat Sales

On January 13, 2026, Sono-Tek reported its fiscal third-quarter and nine-month 2026 results for the period ended November 30, 2025, showing stable revenue but significantly improved profitability and margins. Quarterly net sales edged down 4% to $5.0 million yet marked a seventh straight quarter above the $5 million mark, while gross margin expanded to 50% and net income rose 24% to $340,000; for the first nine months, sales were essentially flat at $15.3 million, but gross margin improved to 51% and net income climbed 32% to $1.25 million. The company ended the quarter debt-free with $11.7 million in cash and securities and a record $12.26 million backlog, reflecting strong order momentum driven by high-ASP production systems, medical, electronics and industrial demand, even as policy-driven softness in U.S. alternative energy and electrolysis markets weighed on some product categories and regions. Management highlighted strong growth in in-line coating, OEM and fluxing systems, robust medical and industrial sales, and a mixed geographic picture with higher North American sales offset by declines in Asia Pacific, Latin America and EMEA, underscoring Sono-Tek’s strategic shift toward higher-margin systems and its reinforced positioning for continued, if modest, top-line growth.

The most recent analyst rating on (SOTK) stock is a Hold with a $4.50 price target. To see the full list of analyst forecasts on Sono-Tek stock, see the SOTK Stock Forecast page.

Sono-Tek Reports Strong Q2 2026 Financial Results

On October 14, 2025, Sono-Tek Corporation announced its financial results for the second quarter and first half of fiscal year 2026, reporting a sixth consecutive quarter with revenues exceeding $5 million. The company experienced a 150% annual increase in medical market sales, a 35% rise in net income for the first half, and a 50% sequential increase in backlog, reflecting strong order momentum. Sono-Tek updated its fiscal year 2026 guidance, anticipating modest revenue growth due to increasing demand in the medical device market, despite challenges in the clean energy sector. The company remains focused on its long-term growth strategy, supported by a strong balance sheet and robust customer demand.

Sono-Tek Restructures Executive Agreements for Key Officers

On November 5, 2025, Sono-Tek Corporation restructured its executive agreements with key officers, including the CEO, Executive Chairman, CFO, and COO. The new agreements, which replace the original ones, maintain similar terms but include an expanded definition of ‘Resignation for Good Reason’ and other modifications, potentially impacting the company’s leadership stability and stakeholder confidence.