Surge Components (SPRS) AI Stock Analysis

• Market Cap: $19.63M
• Dividend Yield: N/A
• Average Volume (3M): 3.10K
• Price to Earnings (P/E): 22.0
• Beta (1Y): 0.28
• Revenue Growth: 16.01%
• EPS Growth: 82.95%
• Country: US
• Employees: 42
• Sector: Technology
• Sector Strength: 88
• Industry: Technology Distributors
• EPS (TTM): 0.08
• Shares Outstanding: 5,706,732
• 10 Day Avg. Volume: 5,331
• 30 Day Avg. Volume: 3,102
• PEG Ratio: 0.00
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.05
• Enterprise Value/Revenue: 0.57
• Enterprise Value/Gross Profit: 1.98
• Enterprise Value/Ebitda: 15.63
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 65 Neutral
• Price Target: $3.50 ▲(4.79% Upside)
• Action: Reiterated Date: 02/28/26
• Date: Action: Reiterated 02/28/26

The score is driven primarily by solid financial stability (low leverage and positive free cash flow) but tempered by weaker recent profitability and cash generation versus prior peak years. Technicals are supportive with an upward bias, while valuation looks only fair given thin margins and no dividend yield support.

Positive Factors

Conservative leverage / strong balance sheet

Very low debt and steadily growing equity give Surge durable financial flexibility. A conservative capital structure reduces refinancing risk, supports working capital for distribution, and permits opportunistic investments or weathering cyclical downturns without stressing liquidity over the next several months.

Consistent positive free cash flow

Positive free cash flow across reported years underpins operational health for a distributor with inventory needs. Persistent FCF supports supplier payments, inventory funding, and self-funded growth or buyback/dividend optionality, reducing reliance on external financing over the medium term.

Stable gross margins

Stable gross margins indicate durable product economics and consistent distributor markups on passive components. That stability provides a margin floor insulating gross profitability from input cost swings and supports margin recovery if operating expenses are controlled over subsequent quarters.

Negative Factors

Weakening operating cash flow

A sharp decline in operating cash flow signals deteriorating cash generation tied to inventory, receivables, or margin pressure. For a distribution business, weakened OCF reduces the ability to fund working capital and capital expenditures internally and increases sensitivity to supplier/customer credit terms over coming quarters.

Revenue volatility and earnings visibility

Material swings in revenue reduce predictability of demand and complicate inventory and supplier planning for a reseller. Volatility undermines forecasting, can inflate working capital needs, and limits management’s ability to commit to long-term investments or margin-improving initiatives reliably.

Lower returns on equity / capital efficiency

Declining ROE indicates the company is generating significantly less profit from its equity base than in prior years. Reduced capital efficiency may reflect competitive margin pressure or suboptimal asset utilization, limiting capacity to generate shareholder value without operational improvements.

Surge Components Business Overview & Revenue Model

Company Description

Surge Components, Inc., together with its subsidiaries, supplies electronic products and components. The company offers capacitors, which are electrical energy storage devices; and discrete semiconductor components, such as rectifiers, transistors, diodes, and circuit protection devices. It also provides audible components, including audible transducers, buzzers, speakers, microphones, resonators, alarms, chimes, filters, and discriminators, as well as fuses, printed circuit boards, and switches. The company's products are used in the electronic circuitry of various industries, including automotive, computer, communications, cellular telephones, consumer electronics, garage door openers, security equipment, audio equipment, telecom products, computer related products, power supply products, utility meters, and household appliances. It sells its products to original equipment manufacturers and distributors through independent sales representatives or organizations in the United States, Canada, China, other Asian countries, South America, and Europe. The company was incorporated in 1981 and is headquartered in Deer Park, New York.

How the Company Makes Money

Surge Components makes money through the distribution and sale of electronic components to manufacturers and producers within various industries. The company's primary revenue streams are derived from the sale of capacitors and discrete semiconductors. By maintaining a diverse inventory and leveraging relationships with manufacturers and suppliers, Surge Components is able to provide its customers with timely and reliable access to necessary components. Key factors contributing to its earnings include strategic partnerships with component manufacturers, a broad customer base across multiple industries, and the ability to adapt to the changing demands of the electronics market.

Surge Components Financial Statement Overview

Summary

Balance sheet strength is a key positive (low leverage and steadily growing equity), but operating performance is mixed: revenue has been volatile with only a 2025 rebound after declines, margins are thin versus prior peak levels, and operating cash flow has weakened in 2025 despite still-positive free cash flow.

Income Statement

Revenue has been volatile (strong growth in 2021–2022, declines in 2023–2024, then a rebound in 2025), which reduces earnings visibility. Profitability is positive but thin in the most recent year: 2025 net margin is ~3.1% (up from ~2.6% in 2024, but well below ~7.2% in 2022). Gross margin has been relatively stable around ~27–29%, suggesting the main pressure is operating/other costs rather than product economics. Overall: improving from 2024, but well below prior peak profitability.

Balance Sheet

Leverage appears conservative with low debt relative to equity (debt-to-equity improves to ~0.05 in 2025 from ~0.12 in 2021), giving the company flexibility and lowering financial risk. Equity has grown steadily over the period provided, supporting balance-sheet resilience. Returns on equity are currently modest (~5.3% in 2025) versus much stronger levels in 2021–2022, signaling that the company is using its capital less efficiently today even though the balance sheet remains strong.

Cash Flow

Free cash flow remains positive across the years shown, which is a key support to earnings quality. However, cash generation has weakened recently: operating cash flow fell from ~2.19M (2023) and ~1.82M (2024) to ~0.92M in 2025, and 2025 free cash flow growth is down ~13%. Cash flow is tracking net income closely (free cash flow roughly matches net income in 2025 and ~1.0x in prior years), but the overall downward trend in cash generation is a near-term concern.

Breakdown	Nov 2025	Nov 2024	Nov 2023	Feb 2023	Feb 2022
Income Statement
Total Revenue	36.32M	31.21M	36.28M	51.91M	39.83M
Gross Profit	10.46M	8.90M	9.93M	14.32M	10.89M
EBITDA	1.33M	1.31M	1.70M	4.80M	3.67M
Net Income	1.14M	825.68K	972.11K	3.74M	2.51M
Balance Sheet
Total Assets	0.00	25.44M	24.68M	24.62M	21.75M
Cash, Cash Equivalents and Short-Term Investments	0.00	12.74M	10.84M	8.69M	6.51M
Total Debt	1.08M	1.21M	1.49M	1.47M	1.62M
Total Liabilities	5.72M	5.96M	6.11M	7.12M	8.57M
Stockholders Equity	21.40M	19.49M	18.57M	17.50M	13.18M
Cash Flow
Free Cash Flow	916.15K	1.81M	2.15M	2.19M	2.13M
Operating Cash Flow	916.15K	1.82M	2.19M	2.24M	2.33M
Investing Cash Flow	-1.35M	-3.83M	-3.25M	-48.35K	-194.91K
Financing Cash Flow	0.00	0.00	0.00	-8.49K	-8.47K

Surge Components Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3.34
• 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 SPRS, the sentiment is Positive. The current price of 3.34 is above the 20-day moving average (MA) of 3.32, above the 50-day MA of 3.25, and above the 200-day MA of 2.76, indicating a bullish trend. The MACD of 0.02 indicates Negative momentum. The RSI at 58.28 is Neutral, neither overbought nor oversold. The STOCH value of 65.71 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SPRS.

Surge Components Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SPRS	65 Neutral	$19.63M	21.98	4.49%	―	16.01%	82.95%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
TAIT	56 Neutral	$9.63M	-9.91	-4.12%	14.21%	―	―
IZM	56 Neutral	$10.04M	7.83	7.76%	―	5.12%	―

Surge Components Corporate Events

Surge Components Holds Annual Meeting, Elects Directors

On November 25, 2025, Surge Components held its Annual Meeting where six directors were elected to serve until the 2026 Annual Meeting. Additionally, the appointment of Seligson & Giannattasio, LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025, was ratified. The company also ratified an amendment to extend the rights plan for three years. These decisions reflect the company’s ongoing governance and strategic planning efforts.