Sono-Tek (SOTK) AI Stock Analysis

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Sono-Tek

(NASDAQ:SOTK)

Rating:56Neutral

Price Target:―

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. SPDR S&P 500 ETF (SPY)

Market Cap

$58.51M

Dividend YieldN/A

Average Volume (3M)6.67K

Price to Earnings (P/E)46.5

Beta (1Y)0.61

Revenue Growth8.40%

EPS Growth-18.22%

CountryUS

Employees82

SectorTechnology

Sector Strength84

IndustryHardware, Equipment & Parts

Share Statistics

EPS (TTM)0.02

Shares Outstanding15,727,702

10 Day Avg. Volume6,498

30 Day Avg. Volume6,667

Financial Highlights & Ratios

PEG Ratio-2.05

Price to Book (P/B)3.56

Price to Sales (P/S)0.00

P/FCF Ratio1.25K

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 ConsensusHold

Number of Analyst Covering1

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 Earnings Call Summary

Earnings Call Date:May 28, 2025

(Q4-2025)

% Change Since: -3.63%|

Next Earnings Date:Jul 10, 2025

Earnings Call Sentiment Neutral

Sono-Tek reported consistent revenue growth and strong backlog with significant orders in the clean energy sector. While the company faces challenges in medical sales, certain geographic regions, and has seen a decrease in gross profit margins, it maintains a strong financial position and continues to focus on high ASP product development. The overall sentiment indicates a cautious optimism with potential for growth despite current uncertainties.

Q4-2025 Updates

Positive Updates

Record Order Backlog

The company reported a solid equipment and service-related backlog of $8.6 million, including the largest orders in Sono-Tek’s history at $2.95 million each.

Revenue Growth

Sono-Tek experienced a 4% annual revenue growth, with the fourth quarter marking the fourth consecutive quarter of revenue over $5 million.

Strong Sales in Clean Energy Sector

Sales to the alternative clean energy market grew by 64% over the prior fiscal year, driven by production scale systems for advanced solar cells and other clean energy applications.

Increased Focus on High ASP Products

The company has shifted towards high ASP (average selling price) products, with sales of these systems totaling $6 million in fiscal 2025.

Strong Financial Position

Sono-Tek maintains a strong cash position with $11.9 million in cash, cash equivalents, and marketable securities, and continues to have no debt.

Negative Updates

Decline in Medical Sales

Medical sales declined by 22% for FY 2025, primarily driven by lower demand for stent and balloon coating systems.

Challenges in Latin America and Asia

Sales in Latin America decreased by 34%, and Asian sales declined by 16%, with weak demand from China contributing to a reduction in sales to $522,000 from $775,000 in fiscal 2024.

Decreased Gross Profit Margin

Gross profit percentage decreased from 50% to 47.5% due to product mix and reallocation of specific labor expenses.

Limited Visibility into Full-Year Revenue

Visibility into full-year revenue remains limited due to evolving conditions in the clean energy sector and potential impacts of international tariffs.

Company Guidance

In the Sono-Tek earnings call for the fiscal year 2025, the company reported a 4% annual revenue growth, marking the fourth consecutive quarter with revenues exceeding $5 million. The full-year net income was $1.3 million, similar to the prior year. A solid backlog of $8.6 million was noted, and the company anticipates continued revenue growth and profitability in the first half of fiscal 2026. The strategic shift to complex solutions expanded the addressable market, with larger machines selling for over $300,000, and system prices reaching $1 million. The clean energy sector showed transformative results, although a decline in orders is anticipated later in the year. Sales in the alternative clean energy market grew by 64%, while medical sales declined by 22%. Geographically, 61% of sales were to U.S. and Canadian customers. Gross profit increased slightly to $9.74 million, with operating expenses growing marginally to $8.73 million. The company maintains a strong cash position with $11.9 million in cash and marketable securities and no debt.

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
11.85M	11.85M	11.44M	10.71M	8.65M	7.88M
	Total Assets
23.13M	23.13M	20.17M	17.63M	16.42M	14.74M
	Total Debt
0.00	0.00	0.00	0.00	1.00M	707.72K
	Net Debt
-2.13M	-2.13M	-3.35M	-4.84M	-3.08M	-2.95M
	Total Liabilities
6.85M	6.85M	5.54M	3.88M	5.47M	4.96M
	Stockholders Equity
16.28M	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 Price3.72

Price Trends

50DMA

3.81

Negative

100DMA

3.79

Negative

200DMA

4.05

Negative

Market Momentum

MACD

-0.04

Positive

RSI

45.88

Neutral

STOCH

43.28

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 3.72 is below the 20-day moving average (MA) of 3.79, below the 50-day MA of 3.81, and below the 200-day MA of 4.05, indicating a bearish trend. The MACD of -0.04 indicates Positive momentum. The RSI at 45.88 is Neutral, neither overbought nor oversold. The STOCH value of 43.28 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 (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ELTK	70 Outperform	$69.89M	20.17	8.80%	1.82%	1.05%	-51.90%
MIND	62 Neutral	$49.57M	31.64	12.53%	―	22.59%	―
Sector *	62 Neutral	$11.96B	10.09	-7.50%	3.10%	7.33%	-8.11%
SOTK	56 Neutral	$58.51M	46.47	7.47%	―	8.40%	-18.22%
LINK	54 Neutral	$53.86M	―	-18.75%	―	-18.62%	-112.68%
LPTH	54 Neutral	$127.84M	―	-24.86%	―	2.59%	-48.02%
WRAP	51 Neutral	$85.98M	―	-166.89%	―	-44.97%	75.63%

* Technology Sector Average

Performance Comparison

SOTK

Sono-Tek

3.75

-0.31

-7.64%

ELTK

Eltek

10.46

0.51

5.13%

LPTH

Lightpath Technologies

2.94

1.72

140.98%

MIND

MIND Technology

5.88

1.68

40.00%

LINK

Interlink Electronics

5.50

1.43

35.14%

WRAP

Wrap Technologies

1.63

0.05

3.16%

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

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.