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Star Equity Holdings (STRR)
NASDAQ:STRR
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Star Equity Holdings
(NASDAQ:STRR)
Rating:51Neutral
Price Target:
$2.00
▼(-1.96%Downside)
Positive Factors
Acquisitions
STRR acquired oilfield services company ADT, which contributes to revenue and diversifies the business.
Backlog and Profit Margin
A strong 62% quarter-over-quarter increase in backlog and gross profit margin above our estimate.
Valuation
STRR is currently trading at an attractive EV/EBITDA multiple of 6.3x, suggesting potential value for investors.
Negative Factors
Cost Management
Lower revenue forecasts and higher corporate costs reduce the 2025 EBITDA estimate.
Revenue
STRR reported 1Q25 results with revenue and EBITDA below our forecast due to modular construction delays.
Star Equity Holdings (STRR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.56M
Dividend YieldN/A
Average Volume (3M)50.85K
Price to Earnings (P/E)―
Beta (1Y)0.57
Revenue Growth34.33%
EPS Growth-153.90%
CountryUS
Employees194
SectorHealthcare
Sector Strength55
IndustryMedical - Diagnostics & Research
Share Statistics
EPS (TTM)-0.37
Shares Outstanding3,209,340
10 Day Avg. Volume38,634
30 Day Avg. Volume50,855
Financial Highlights & Ratios
PEG Ratio0.15
Price to Book (P/B)1.51
Price to Sales (P/S)0.00
P/FCF Ratio-12.48
Enterprise Value/Market Cap11.48
Enterprise Value/Revenue0.36
Enterprise Value/Gross Profit6.29
Enterprise Value/Ebitda-2.86
Forecast
1Y Price Target
$5.00Price Target Upside145.10% 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 Earnings Call Summary
Earnings Call Date:May 14, 2025
(Q1-2025)
| % Change Since: -9.33%|
Next Earnings Date:Aug 08, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong revenue growth, improved gross margins, and a record backlog, indicating positive business momentum. However, challenges include a net loss from operations, increased SG&A expenses, and a reduced cash balance. While there are notable achievements and positive trends, the financial challenges and net losses suggest a balanced outlook.Q1-2025 Updates
Positive Updates
Significant Revenue Growth
First quarter revenue increased by 41.7% over the first quarter of 2024, driven by acquisitions and increased demand.
Improved Gross Margin
Gross margin improved to 24.3% versus 17.3% in the same quarter last year.
Record Backlog in Building Solutions
Building Solutions division backlog hit a record $27.9 million at quarter end compared to $14.8 million at the end of Q1 2024.
Establishment of Energy Services Division
Acquisition of Alliance Drilling Tools marked the establishment of the Energy Services division.
Positive Cash Flow from Operations
Consolidated cash flow from operations was an inflow of $0.6 million versus an outflow of $2.4 million in Q1 2024.
Negative Updates
Net Loss from Continuing Operations
Reported a net loss from continuing operations of $1.2 million in Q1 2025 compared to a net loss of $2.2 million in Q1 2024.
SG&A Expenses Increase
SG&A increased by $1.2 million or 28.5% versus Q1 2024 due to integration and M&A activity.
Reduced Unrestricted Cash Balance
Unrestricted cash balance decreased to $1.9 million from $4.0 million at the end of 2024, primarily due to acquisition costs.
Company Guidance
During the Star Equity Holdings First Quarter 2025 Results Conference Call, the company provided several key financial metrics and insights into its performance and future outlook. The first quarter revenue rose by 41.7% compared to the same period in 2024, primarily due to the acquisition of Timber Technologies and Alliance Drilling Tools. The gross margin improved to 24.3% from 17.3% the previous year. The Building Solutions segment saw a 32.9% increase in revenue. The division's backlog reached a record $27.9 million at quarter-end, up from $14.8 million a year earlier. The company's gross profit nearly doubled, reaching $3.1 million, while SG&A expenses increased by 28.5%, yet decreased as a percentage of revenue. The net loss from continuing operations improved to $1.2 million from $2.2 million the previous year. Non-GAAP adjusted EBITDA showed a reduced loss of $0.8 million. Positive cash flow from operations was reported at $0.6 million, compared to a $2.4 million outflow in Q1 2024. The company's unrestricted cash balance stood at $1.9 million at the end of the quarter.Star Equity Holdings Financial Statement Overview
Summary
Star Equity Holdings faces significant profitability and cash flow challenges, despite a modest revenue growth trend. The balance sheet is relatively stable, but the company's inability to generate profits and positive cash flows is a major concern going forward.Income Statement
Star Equity Holdings' revenue showed a positive growth trajectory, with a 7.13% increase in the latest TTM period. However, profitability is a significant concern. The company reported negative EBIT and EBITDA margins, indicating operational challenges. The net profit margin is also negative, suggesting the company is unable to convert sales into profits effectively.45
Neutral
Balance Sheet
The balance sheet reflects a moderate risk profile, with a debt-to-equity ratio of 0.37, indicating a conservative leverage approach. However, the return on equity is negative, pointing to inefficiencies in generating returns for shareholders. The equity ratio of 63.02% suggests a solid equity base relative to total assets, but profitability remains a concern.55
Neutral
Cash Flow
Cash flow analysis reveals a concerning trend, with negative free cash flow indicating cash burn. The operating cash flow to net income ratio is negative, reflecting poor cash generation against reported losses. Although there is a slight improvement in free cash flow growth, the overall cash flow position remains strained.40
Negative
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 57.16M | 53.36M | 45.78M | 112.15M | 106.56M | 78.16M | Gross Profit |
| 11.98M | 11.05M | 11.93M | 25.88M | 15.24M | 13.99M | EBIT |
| -7.71M | -8.41M | -4.35M | -3.10M | -9.08M | -6.77M | EBITDA |
| -5.39M | -4.81M | -1.69M | -1.35M | -3.03M | 6.15M | Net Income Common Stockholders |
| -13.77M | -10.44M | 25.13M | -5.25M | -8.93M | -5.29M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 1.89M | 7.37M | 23.16M | 8.15M | 4.54M | 3.26M | Total Assets |
| 94.84M | 83.05M | 75.50M | 73.30M | 68.05M | 88.29M | Total Debt |
| 22.18M | 20.08M | 3.61M | 17.03M | 17.42M | 26.21M | Net Debt |
| 20.29M | 16.08M | -14.72M | 12.37M | 12.88M | 22.98M | Total Liabilities |
| 35.07M | 28.71M | 10.20M | 31.55M | 32.31M | 48.36M | Stockholders Equity |
| 59.77M | 54.34M | 65.30M | 41.76M | 35.74M | 39.93M |
| Cash Flow | Free Cash Flow | ||||
| -5.21M | -8.04M | 2.00M | -5.05M | -7.24M | -6.45M | Operating Cash Flow |
| -2.23M | -5.18M | 2.70M | -3.86M | -6.45M | -4.95M | Investing Cash Flow |
| -15.74M | -12.04M | 16.18M | -5.09M | 17.80M | -1.33M | Financing Cash Flow |
| 6.18M | 3.91M | -3.07M | 8.94M | -9.97M | 8.06M |
Star Equity Holdings Technical Analysis
Negative
2.04
Price Trends
2.14
Negative
2.19
Negative
2.77
Negative
Market Momentum
-0.03
Positive
44.56
Neutral
11.79
Positive
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 2.04 is below the 20-day moving average (MA) of 2.18, below the 50-day MA of 2.14, and below the 200-day MA of 2.77, indicating a bearish trend. The MACD of -0.03 indicates Positive momentum. The RSI at 44.56 is Neutral, neither overbought nor oversold. The STOCH value of 11.79 is Positive, 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 (54)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
65 Neutral | $17.22M | ― | -25.29% | ― | 26.67% | 44.02% | |
63 Neutral | $12.61M | ― | -126.34% | ― | 3.87% | 91.76% | |
54 Neutral | $5.38B | 3.31 | -45.11% | 3.29% | 16.82% | 0.04% | |
51 Neutral | $6.56M | ― | -15.34% | ― | 34.33% | -153.90% | |
42 Neutral | $2.41M | ― | -141.39% | ― | -58.46% | 47.98% | |
42 Neutral | $8.48M | ― | -290.85% | ― | 78.40% | 22.41% |
* Healthcare Sector Average
Performance Comparison
STRR
Star Equity Holdings
2.04
-2.12
-50.96%
APDN
Applied DNA Sciences
5.07
-393.41
-98.73%
PRPO
Precipio
11.26
5.47
94.47%
INBS
Intelligent Bio Solutions
1.90
-0.26
-12.04%
BIAF
bioAffinity Technologies, Inc.
0.30
-1.81
-85.78%
Star Equity Holdings Corporate Events
M&A TransactionsBusiness Operations and Strategy
Star Equity Holdings Announces Merger with Hudson Global
Positive
May 22, 2025
On May 21, 2025, Star Equity Holdings, Inc. and Hudson Global, Inc. announced a definitive merger agreement where Star will merge with a wholly owned subsidiary of Hudson. The merger aims to create a larger multi-sector holding company, NewCo, with pro-forma annualized revenues of $210 million, enhancing growth potential and shareholder value. The merger, pending regulatory and shareholder approvals, is expected to close in the second half of 2025. It will result in Hudson shareholders owning approximately 79% of NewCo, while Star shareholders will own about 21%. The merger is anticipated to bring cost savings, revenue diversification, and improved market capitalization, benefiting both companies’ shareholders.
The most recent analyst rating on (STRR) stock is a Buy with a $8.00 price target. To see the full list of analyst forecasts on Star Equity Holdings stock, see the STRR Stock Forecast page.
DividendsBusiness Operations and Strategy
Star Equity Holdings Declares Cash Dividend for Preferred Stock
Positive
May 20, 2025
On May 20, 2025, Star Equity Holdings, Inc. announced a cash dividend of $0.25 per share for its 10% Series A Cumulative Perpetual Preferred Stock, with a record date of June 1, 2025, and a payment date of June 10, 2025. This dividend declaration reflects the company’s commitment to providing returns to its preferred stockholders and may impact its financial strategy and liquidity, considering its need to manage debt and pursue growth opportunities.
The most recent analyst rating on (STRR) stock is a Buy with a $8.00 price target. To see the full list of analyst forecasts on Star Equity Holdings stock, see the STRR Stock Forecast page.
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.