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Surgepays Inc (SURG)
:SURG
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SurgePays
(NASDAQ:SURG)
Rating:52Neutral
Price Target:―
Positive Factors
Customer Transition
SURG has successfully transitioned 80K of its 250K former ACP customers into the U.S. government's Lifeline program.
Market Opportunity
There are ~100 million adults in the U.S. that are underbanked, representing a significant market opportunity for SurgePays’s products.
Strategic Partnership
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
Earnings Forecast
Analyst's next-12-month revenue forecast of about $120M is well below reaffirmed guidance of over $200M.
Revenue Gap
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.
Service Provision Loss
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.
SurgePays (SURG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$56.74M
Dividend YieldN/A
Average Volume (3M)195.69K
Price to Earnings (P/E)―
Beta (1Y)0.33
Revenue Growth-70.08%
EPS Growth-330.51%
CountryUS
Employees130
SectorTechnology
Sector Strength82
IndustrySoftware - Application
Share Statistics
EPS (TTM)-0.38
Shares Outstanding20,411,549
10 Day Avg. Volume93,504
30 Day Avg. Volume195,690
Financial Highlights & Ratios
PEG Ratio0.01
Price to Book (P/B)3.67
Price to Sales (P/S)0.00
P/FCF Ratio-2.68
Enterprise Value/Market Cap0.88
Enterprise Value/Revenue0.13
Enterprise Value/Gross Profit-3.43
Enterprise Value/Ebitda-1.13
Forecast
1Y Price Target
$8.75Price Target Upside214.75% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
SurgePays Business Overview & Revenue Model
Company DescriptionSurgePays, Inc. (SURG) is a technology and telecommunications company that primarily focuses on providing financial and mobile services to underserved communities. The company operates in sectors such as fintech and telecommunications, offering a range of products including prepaid wireless services, mobile top-ups, and financial services like prepaid debit cards. SurgePays aims to enhance connectivity and financial inclusion for its customers, particularly targeting multi-cultural and rural markets.
How the Company Makes MoneySurgePays 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 Earnings Call Summary
Earnings Call Date:May 13, 2025
(Q1-2025)
| % Change Since: -17.26%|
Next Earnings Date:Aug 20, 2025
Earnings Call Sentiment Neutral
The earnings call presented a balanced view of SurgePays' current position. While there were notable achievements such as strategic partnerships, new product launches, and significant revenue growth in platform services, these were countered by substantial revenue declines and increased losses attributed to the cessation of federal ACP funding.Q1-2025 Updates
Positive Updates
Strategic Partnership with AT&T
SurgePays launched a multi-year partnership with AT&T, completing full integration, including network migration and SIM activation rollout in less than six months.
Launch of New Phone in a Box Concept
The new Phone in a Box concept sold out 2,600 units in under 30 days, indicating strong market demand and paving the way for exponential growth.
Significant Inventory and Distribution Expansion
SurgePays has shipped over 210,000 SIM cards, with 250,000 more arriving soon, supporting both retail and wholesale channels through a network of over 9,000 stores.
Growth in Platform Service Revenue
Platform service revenue grew significantly to $8.3 million in Q1 2025 from $2.5 million in Q1 2024.
Non-Dilutive Financing Secured
Secured $6 million in non-dilutive financing from Cable Car, providing a long runway for growth with a 15% interest rate and a 24-month maturity.
Promotion of Derron Winfrey
Derron Winfrey was promoted to President of Sales and Operations, leveraging his experience to drive growth and operations.
Negative Updates
Decrease in Total Revenue
Total revenue for Q1 2025 was $10.6 million, a significant decrease from $31.4 million in Q1 2024, primarily due to the shutdown of ACP federal funding.
Gross Profit Decline
Reported a gross profit loss of $2.9 million in Q1 2025 compared to $8.2 million profit in Q1 2024, attributed to the ACP funding shutdown.
Increased Net Loss
Net loss for Q1 2025 was $7.6 million, with a loss per share of negative $0.38, impacted by the cessation of federal ACP funding.
Reduced Cash Reserves
Cash and cash equivalents decreased to $5.4 million as of March 31, 2025, from $11.8 million as of December 31, 2024.
Company Guidance
During the first quarter of 2025 earnings call, SurgePays provided guidance that highlights significant growth projections and strategic initiatives. The company is targeting $200 million in revenue for the 12-month period leading up to April 1, 2025, and expects to exit the year with positive operating cash flow. SurgePays has launched a multi-year partnership with AT&T, resulting in the shipment of over 210,000 SIM cards and a further 290,000 in inventory, with an additional 250,000 SIMs expected by the end of May. The company operates a robust retail network of over 9,000 stores and aims to expand to 100,000 locations. As a Mobile Virtual Network Enabler (MVNE), SurgePays has onboarded three MVNOs and has two more in the pipeline, aiming to serve hundreds of thousands of subscribers. This is part of a high-margin, recurring revenue model. The company recently secured $6 million in financing from Cable Car with a 24-month convertible note, providing financial flexibility to achieve its growth objectives. SurgePays anticipates being cash flow positive by December 2025.SurgePays Financial Statement Overview
Summary
SurgePays is experiencing a challenging financial environment with declining revenues, substantial EBIT and EBITDA losses, and cash flow constraints. The balance sheet shows moderate leverage, but the decline in stockholders' equity is concerning. Positive aspects include reductions in total debt.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.40
Negative
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.55
Neutral
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.35
Negative
| 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 |
| 4.59M | 5.44M | 8.11M | 7.68M | 7.67M | Net Debt |
| -7.20M | -9.18M | 1.08M | 1.40M | 6.99M | Total Liabilities |
| 8.95M | 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
Neutral
2.78
Price Trends
2.73
Positive
2.08
Positive
1.90
Positive
Market Momentum
0.03
Positive
48.36
Neutral
19.70
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SURG, the sentiment is Neutral. The current price of 2.78 is below the 20-day moving average (MA) of 2.93, above the 50-day MA of 2.73, and above the 200-day MA of 1.90, indicating a neutral trend. The MACD of 0.03 indicates Positive momentum. The RSI at 48.36 is Neutral, neither overbought nor oversold. The STOCH value of 19.70 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SURG.
SurgePays Risk Analysis
SurgePays disclosed 20 risk factors in its most recent earnings report. SurgePays 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
SurgePays Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
62 Neutral | $11.90B | 10.64 | -7.50% | 2.90% | 7.41% | -8.19% | |
61 Neutral | $47.46M | ― | -10.79% | ― | 3.21% | -550.35% | |
61 Neutral | $93.58M | ― | -189.13% | ― | 89.27% | 26.30% | |
52 Neutral | $56.74M | ― | -170.91% | ― | -70.08% | -330.51% | |
51 Neutral | $112.92M | ― | -4.57% | ― | 5.78% | 54.19% | |
37 Underperform | $74.83M | ― | -19.87% | ― | ― | ― |
* Technology Sector Average
Performance Comparison
SURG
SurgePays
2.78
-1.13
-28.90%
IDN
Intellicheck Mobilisia
5.69
1.73
43.69%
PHUN
Phunware
3.71
-2.07
-35.81%
DUOT
Duos Technologies Group
8.03
4.82
150.16%
INLX
Intellinetics
11.82
4.71
66.24%
SurgePays Corporate Events
Executive/Board ChangesShareholder Meetings
SurgePays Confirms Directors and Ratifies Accounting Firm
Neutral
May 20, 2025
On May 15, 2025, SurgePays, Inc. held its annual meeting of stockholders where approximately 69.86% of the company’s shares were represented, establishing a quorum. During the meeting, the election of five directors was confirmed, the selection of Rodefer Moss & Co., PLLC as the independent accounting firm was ratified, and the executive compensation was approved on a non-binding basis.
The most recent analyst rating on (SURG) stock is a Buy with a $9.50 price target. To see the full list of analyst forecasts on SurgePays stock, see the SURG Stock Forecast page.
Private Placements and FinancingBusiness Operations and Strategy
SurgePays Secures $7M Convertible Note for Expansion
Positive
May 16, 2025
On May 12, 2025, SurgePays, Inc. entered into a $7 million senior secured convertible note agreement with an institutional shareholder to accelerate its growth strategy. The financing will support the nationwide launch of LinkUp Mobile and expand its MVNE wholesale business, with management projecting revenues to exceed $200 million over the next 12 months and achieving positive cash flow by the end of 2025.
The most recent analyst rating on (SURG) stock is a Buy with a $9.50 price target. To see the full list of analyst forecasts on SurgePays stock, see the SURG 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.