SurgePays (SURG) AI Stock Analysis

• Market Cap: $50.42M
• Dividend Yield: N/A
• Average Volume (3M): 3.21M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.32
• Revenue Growth: -55.61%
• EPS Growth: -259.24%
• Country: US
• Employees: 130
• Sector: Technology
• Sector Strength: 55
• Industry: Software - Application
• EPS (TTM): -2.31
• Shares Outstanding: 20,411,549
• 10 Day Avg. Volume: 546,145
• 30 Day Avg. Volume: 3,210,575
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.32
• Price to Cash Flow (P/CF): -0.50
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $8.50
• Price Target Upside: 258.65% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

SurgePays' overall score reflects the company's significant financial struggles, including declining revenues and profitability issues, which weigh heavily on its financial health. While technical indicators suggest some positive momentum, the negative P/E ratio and lack of dividend yield are notable concerns. Strategic initiatives from the earnings call provide potential growth avenues, but are currently overshadowed by serious financial challenges.

Positive Factors

Growth Opportunities

LinkUp Mobile program could have monthly gross margins of ~$14/customer, and SURG is off to a promising start with this new offering.

New Revenue Streams

SurgePays Inc has signed up 100,000 of its ex-customers to the U.S. Government's Lifeline program, offering a new revenue stream albeit with lower margins.

Strategic Partnerships

The company recently signed a major agreement with AT&T to offer a full range of mobile wireless, voice, data, and messaging services on the nation's largest wireless network.

Negative Factors

Financial Performance

SurgePays Inc reported a net loss per share significantly below expectations due to continued service provision to ex-customers from the expired Affordable Connectivity Program without receiving revenue.

Market Uncertainty

Analyst maintains a Hold rating for SurgePays Inc due to the uncertainty and lower than expected estimates for LinkUp Mobile activations and revenue forecast well below initial guidance.

Revenue Impact

The expiration of the Affordable Connectivity Program created a significant revenue gap for SurgePays Inc as it was the source of 97% of the company's gross profit in 2023.

SurgePays Business Overview & Revenue Model

Company Description

SurgePays, Inc., a financial technology and telecommunications company, provides services to the underbanked community in the United States. Its blockchain platform utilizes a suite of financial and prepaid products to convert corner stores and bodegas into tech-hubs for underbanked neighborhoods. The company offers voice and SMS text messaging services to subsidized and direct retail prepaid customers, as well as to low-income consumers. It also offers subsidized mobile broadband services to consumers in California, Colorado, Florida, Illinois, Maryland, Mississippi, Missouri, Nevada, New Jersey, Ohio, Oklahoma, Rhode Island, Tennessee, and Texas, as well as prepaid wireless plans. In addition, the company provides marketing business intelligence, plaintiff generation, and case load management solutions primarily to law firms in the mass tort industry. Further, it operates a bilingual operations center offering the Company with sales support, customer service, IT infrastructure design, graphic media, database programming, software development, revenue assurance, lead generation, and other various operational support services. The company is headquartered in Bartlett, Tennessee.

How the Company Makes Money

SurgePays generates revenue through a diversified business model that includes selling prepaid wireless services and mobile data top-ups via a network of independent retailers. A significant portion of its earnings comes from the distribution of wireless and financial services through its proprietary SurgePays Network. This platform connects retail locations with telecom and financial services, providing a digital corridor for transactions. Additionally, SurgePays earns money by offering financial products such as prepaid debit cards and payment processing services. The company's key revenue streams are supported by partnerships with wireless carriers, financial service providers, and a broad retailer network, facilitating access to a large customer base in underserved markets.

SurgePays Financial Statement Overview

Summary

SurgePays is facing a challenging financial environment with declining revenues, negative profit margins, and cash flow constraints. The balance sheet shows manageable leverage but a reliance on liabilities. Cash flow is strained with negative operating cash flow, highlighting cash management issues.

Income Statement

SurgePays has experienced significant revenue volatility with a major decline from 2023 to 2024. Gross and net profit margins have turned negative, indicating a challenging profitability environment. The company faces substantial EBIT and EBITDA losses, which reflect operational difficulties and inefficiencies.

Balance Sheet

The balance sheet shows a moderate debt-to-equity ratio, suggesting manageable leverage. However, the equity ratio indicates a reliance on liabilities. The decline in stockholders' equity over recent periods is a concern, although the reduction in total debt is a positive aspect.

Cash Flow

The cash flow position is strained, with negative operating and free cash flow in 2024. This marks a sharp reversal from the previous year's positive cash flow, raising concerns about cash management and sustainability. The operating cash flow to net income ratio is negative, highlighting cash flow inefficiencies.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
60.88M	137.14M	121.54M	51.06M	54.41M
	Gross Profit
-14.32M	35.64M	13.47M	6.17M	2.47M
	EBIT
-41.78M	18.87M	873.66K	-5.99M	-8.40M
	EBITDA
-41.22M	20.08M	1.86M	-5.23M	-5.40M
	Net Income Common Stockholders
-45.73M	20.62M	-148.85K	-18.80M	-16.90M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
11.79M	14.62M	7.04M	6.28M	674.00K
	Total Assets
23.98M	41.93M	34.00M	19.50M	7.33M
	Total Debt
1.51M	5.44M	8.11M	7.68M	7.67M
	Net Debt
-10.28M	-9.18M	1.08M	1.40M	6.99M
	Total Liabilities
8.71M	13.52M	28.89M	15.95M	18.05M
	Stockholders Equity
15.32M	28.25M	4.99M	3.55M	-10.73M
Cash Flow		Free Cash Flow
-21.83M	10.01M	94.69K	-15.34M	-4.33M
	Operating Cash Flow
-21.31M	10.29M	793.27K	-15.29M	-4.33M
	Investing Cash Flow
-3.00M	-281.30K	-1.50M	-376.72K	8.35K
	Financing Cash Flow
22.48M	-2.42M	1.46M	21.27M	4.65M

SurgePays Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2.37
• 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 SURG, the sentiment is Positive. The current price of 2.37 is above the 20-day moving average (MA) of 2.09, above the 50-day MA of 1.63, and above the 200-day MA of 1.87, indicating a bullish trend. The MACD of 0.24 indicates Negative momentum. The RSI at 63.44 is Neutral, neither overbought nor oversold. The STOCH value of 60.44 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SURG.

SurgePays Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TTMI	61 Neutral	$1.91B	34.52	3.66%	―	9.41%	―
CLFD	59 Neutral	$374.63M	―	-3.20%	―	-22.61%	-173.59%
Sector *	58 Neutral	$11.04B	9.83	-6.56%	3.16%	7.59%	-10.43%
SURG	52 Neutral	$50.42M	―	-209.93%	―	-55.61%	-259.24%
RKDA	51 Neutral	$4.05M	―	-60.76%	―	-6.20%	64.07%
TPCS	36 Underperform	$23.89M	―	-76.24%	―	8.71%	-164.66%