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Star Equity Holdings, Inc. (STRR)
:STRR
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Star Equity Holdings
(NASDAQ:STRR)
48Neutral
Positive Factors
Acquisition
STRR announced a $12.7M acquisition of oilfield services company Alliance Drilling Tools, enhancing its portfolio.
Analyst Confidence
Analyst maintains a Buy rating and $8.00 price target, reflecting confidence in the company's future.
Financial Performance
Preliminary 4Q24 EBITDA exceeded forecasts, indicating strong financial performance.
Negative Factors
Investment Impairment
Net loss in 3Q24 due to investment impairment.
Star Equity Holdings (STRR) vs. S&P 500 (SPY)
Market Cap
$7.02M
Dividend YieldN/A
Average Volume (3M)9.32K
Price to Earnings (P/E)―
Beta (1Y)0.55
Revenue Growth-9.78%
EPS Growth-152.36%
CountryUS
Employees194
SectorHealthcare
Sector Strength76
IndustryMedical - Diagnostics & Research
Share Statistics
EPS (TTM)-3.92
Shares Outstanding3,205,832
10 Day Avg. Volume13,237
30 Day Avg. Volume9,323
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.15
Price to Cash Flow (P/CF)3.40
P/FCF Ratio4.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$8.00Price Target Upside265.30% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Star Equity Holdings Business Overview & Revenue Model
Company DescriptionStar Equity Holdings, Inc. (STRR) is a diversified holding company engaged in healthcare, construction, and investments. The company operates through its subsidiaries, offering a range of products and services including diagnostic imaging, building and construction materials, and investment management. Star Equity Holdings aims to deliver value through strategic acquisitions and operational improvements across its business segments.
How the Company Makes MoneyStar Equity Holdings generates revenue through multiple streams across its diverse business segments. In the healthcare sector, the company earns income from the sale and service of diagnostic imaging equipment. The construction segment contributes to revenue through the sale of construction materials and services for infrastructure projects. Additionally, the company benefits from investment income, which includes returns from strategic investments and financial management. Significant partnerships and acquisitions are crucial to expanding its market presence and enhancing its revenue streams.
Star Equity Holdings Financial Statement Overview
Summary
Star Equity Holdings exhibits financial challenges with declining revenues and persistent net losses impacting profitability. Despite some improvements in leverage, the balance sheet indicates potential financial stress due to high debt levels. Cash flow generation remains inconsistent, posing liquidity concerns. Continued focus on operational efficiency and cost management is essential for financial recovery.Income Statement
Star Equity Holdings has shown a declining trend in revenue, with a significant decrease from 2022 to 2023, although there was a slight recovery in 2024. Gross profit margins have also deteriorated, indicating potential cost management issues. The company has faced persistent net losses, with the net profit margin deeply negative in recent years, reflecting ongoing profitability challenges.35
Negative
Balance Sheet
The company's debt-to-equity ratio has improved over the years, indicating a reduction in leverage risk. However, Star Equity Holdings continues to carry a significant amount of debt relative to its equity. The equity ratio suggests a moderate level of financial stability, but the declining trend in stockholders' equity is concerning, which could indicate potential financial stress.50
Neutral
Cash Flow
Star Equity Holdings has faced challenges in generating consistent positive free cash flow, with negative free cash flow reported in 2024. Operating cash flow has fluctuated significantly, and the operating cash flow to net income ratio indicates inefficiencies in converting income into cash flow, posing liquidity risks.40
Negative
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 53.36M | 45.78M | 112.15M | 106.56M | 78.16M | Gross Profit |
| 11.05M | 11.93M | 25.88M | 15.24M | 13.99M | EBIT |
| -8.41M | -4.35M | -3.10M | -9.08M | -6.77M | EBITDA |
| -8.41M | -1.69M | -1.35M | -3.03M | 6.15M | Net Income Common Stockholders |
| -12.48M | 25.13M | -5.25M | -8.93M | -5.29M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 4.00M | 23.16M | 8.15M | 4.54M | 3.26M | Total Assets |
| 83.05M | 75.50M | 73.30M | 68.05M | 88.29M | Total Debt |
| 12.68M | 3.61M | 17.03M | 17.42M | 26.21M | Net Debt |
| 8.67M | -14.72M | 12.37M | 12.88M | 22.98M | Total Liabilities |
| 28.71M | 10.20M | 31.55M | 32.31M | 48.36M | Stockholders Equity |
| 54.34M | 65.30M | 41.76M | 35.74M | 39.93M |
| Cash Flow | Free Cash Flow | |||
| -8.04M | 2.00M | -5.05M | -7.24M | -6.45M | Operating Cash Flow |
| -5.18M | 2.70M | -3.86M | -6.45M | -4.95M | Investing Cash Flow |
| -12.04M | 16.18M | -5.09M | 17.80M | -1.33M | Financing Cash Flow |
| 3.91M | -3.07M | 8.94M | -9.97M | 8.06M |
Star Equity Holdings Technical Analysis
Negative
2.19
Price Trends
2.24
Negative
2.42
Negative
3.29
Negative
Market Momentum
0.06
Negative
51.17
Neutral
30.81
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STRR, the sentiment is Negative. The current price of 2.19 is below the 20-day moving average (MA) of 2.33, below the 50-day MA of 2.24, and below the 200-day MA of 3.29, indicating a bearish trend. The MACD of 0.06 indicates Negative momentum. The RSI at 51.17 is Neutral, neither overbought nor oversold. The STOCH value of 30.81 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for STRR.
Star Equity Holdings Risk Analysis
Star Equity Holdings disclosed 33 risk factors in its most recent earnings report. Star Equity Holdings 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
Star Equity Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (48)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $9.89B | 21.97 | 24.52% | 0.65% | 11.91% | 28.47% | |
70 Outperform | $8.74B | 30.04 | 27.12% | 0.32% | 7.37% | 11.17% | |
69 Neutral | $2.74B | 19.95 | 14.15% | 3.36% | -0.85% | -23.40% | |
62 Neutral | $3.59B | ― | -3.53% | 4.25% | -6.05% | -1677.05% | |
61 Neutral | $1.44B | 14.22 | 10.79% | 2.63% | 15.25% | 51.77% | |
48 Neutral | $6.36B | 1.09 | -49.92% | 2.63% | 17.17% | 0.95% | |
48 Neutral | $7.02M | ― | -17.45% | ― | -9.78% | -152.36% |
* Healthcare Sector Average
Performance Comparison
STRR
Star Equity Holdings
2.19
-2.55
-53.80%
CHE
Chemed
597.34
-23.62
-3.80%
EHC
Encompass Health
97.96
16.23
19.86%
NHC
National Healthcare
92.89
3.03
3.37%
PDCO
Patterson Companies
30.94
5.58
22.00%
PRGO
Perrigo Company
26.31
-4.21
-13.79%
Star Equity Holdings Earnings Call Summary
Earnings Call Date: Mar 20, 2025 | % Change Since: -0.90% | Next Earnings Date: May 14, 2025
Earnings Call Sentiment Neutral
The earnings call presents a mixed picture. While there were significant revenue and gross profit increases in Q4 and a promising acquisition in Alliance Drilling Tools, the company faced challenges with a full-year gross profit decline, increased SG&A expenses, and a net loss from continuing operations. Additionally, there was increased debt and reduced cash flow. The sentiment is balanced with both positive developments and notable challenges.Highlights
Revenue Increase
In the fourth quarter of 2024, revenue increased by 21.1% to $17.1 million versus $14.1 million in the fourth quarter of 2023. For the full year 2024, revenue increased 16.5% to $53.4 million from $45.8 million in 2023.
Gross Profit Growth in Q4
Fourth quarter 2024 gross profit increased 55.3% to $4.5 million versus $2.9 million in Q4 2023, driven by the inclusion of gross profit from Timber Technologies.
Positive Momentum in Building Solutions
Momentum shifted in the second half of 2024, with several large projects receiving approvals and production starting. The signed backlog stood at $17.2 million at year-end, indicating building demand.
Alliance Drilling Tools Acquisition
The acquisition of Alliance Drilling Tools established a new Energy Services division, expected to contribute significantly to consolidated results with revenue of approximately $10.5 million and gross margin of 48%.
Improved Non-GAAP Adjusted EBITDA
Non-GAAP adjusted EBITDA from continuing operations increased to $1.1 million in Q4 from a negative $0.1 million in Q4 of 2023.
Lowlights
Full Year Gross Profit Decline
Full year 2024 gross profit declined 7.2% due to a one-time $574,000 purchase price accounting adjustment related to the Timber Technologies acquisition and lower revenues in the KBS and EBGL businesses.
Net Loss from Continuing Operations
In Q4, the net loss from continuing operations was $2.5 million versus net income from continuing operations of $1.8 million in Q4 of 2023.
Increased SG&A Expenses
SG&A increased by $1 million or 31.7% versus Q4 of 2023, largely due to the full year impacts of the Timber Technologies and Big Lake Lumber acquisitions.
Cash Flow From Operations Outflow
Q4 2024 cash flow from consolidated operations was an outflow of $1.5 million compared to an inflow of $28,000 for the same period in the prior year.
Increased Debt and Reduced Cash Balance
Outstanding balance on interest-bearing debt was $11.3 million versus $2.0 million at the end of December 2023. Cash balance, including restricted cash, stood at $5.6 million, down from $18.9 million at the end of 2023.
Company Guidance
During the Star Equity Holdings fourth quarter 2024 results conference call, the company provided a comprehensive overview of its financial performance and strategic initiatives. The call highlighted a 21.1% increase in revenue to $17.1 million for the fourth quarter, compared to $14.1 million in the same period of 2023. For the full year 2024, revenue rose by 16.5% to $53.4 million. The increase was largely driven by mergers and acquisitions, notably the acquisition of Timber Technologies and Big Lake Lumber. Fourth quarter gross profit soared by 55.3% to $4.5 million, and the company's backlog of committed projects and orders stood at $17.2 million at year-end, reflecting strong demand momentum continuing into 2025. The company also discussed its efforts to mitigate risks from tariffs on Canadian lumber and highlighted its strategic acquisition of Alliance Drilling Tools, which generated $10.5 million in revenue with a gross margin of 48% in 2024. Despite a fourth-quarter net loss from continuing operations of $2.5 million, adjustments led to an adjusted net income of $0.5 million or $0.15 per diluted share, showcasing resilience and strategic growth focus.Star Equity Holdings Corporate Events
Executive/Board Changes
Star Equity Holdings Approves 2024 Executive Bonuses
Neutral
Mar 11, 2025
On March 7, 2025, Star Equity Holdings, Inc. approved the payment of annual incentive bonuses to its named executive officers under the 2024 Executive Incentive Plan. These bonuses, determined by the achievement of financial targets and other objectives, are payable in cash and restricted stock units, with vesting over three years. Additionally, the Board set performance targets for 2025 bonuses.
Private Placements and FinancingM&A TransactionsBusiness Operations and Strategy
Star Equity Holdings Acquires Alliance Drilling Tools
Positive
Mar 4, 2025
On March 3, 2025, Star Equity Holdings, Inc. completed the acquisition of Alliance Drilling Tools, LLC, a company specializing in drilling equipment supply and repair for various industries, including oil and gas. This acquisition, valued at $12.65 million, marks a significant step in Star’s growth strategy by establishing a new Energy Services division. The transaction was funded through a combination of cash, debt financing, and preferred stock issuance. The acquisition is expected to enhance Star’s operational capacity and provide a scalable growth platform, benefiting shareholders by expanding the company’s portfolio and leveraging ADT’s industry expertise.
Executive/Board ChangesBusiness Operations and Strategy
Star Equity Holdings Approves Annual Bonus Plans
Positive
Feb 18, 2025
On February 13, 2025, Star Equity Holdings, Inc.’s Board of Directors approved two annual bonus plans for senior employees of its subsidiaries, KBS Builders, Inc. (KBS) and EdgeBuilder, Inc. and Glenbrook Building Supply, Inc. (EGBL). The bonus plans are tied to the achievement of adjusted EBITDA targets, with bonuses being paid in cash and Series A Preferred Stock, subject to vesting over three years. These plans, effective from 2025, reflect the company’s efforts to incentivize performance and align employee interests with financial growth objectives.
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.