SWK Holdings (SWKH) AI Stock Analysis

• Market Cap: $173.49M
• Dividend Yield: N/A
• Average Volume (3M): 34.64K
• Price to Earnings (P/E): 9.6
• Beta (1Y): 0.13
• Revenue Growth: 18.18%
• EPS Growth: 54.41%
• Country: US
• Employees: 24
• Sector: Financial
• Sector Strength: 82
• Industry: Asset Management
• EPS (TTM): 0.66
• Shares Outstanding: 12,269,614
• 10 Day Avg. Volume: 22,022
• 30 Day Avg. Volume: 34,641
• PEG Ratio: 0.37
• Price to Book (P/B): 0.60
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 4.48
• Enterprise Value/Market Cap: 1.02
• Enterprise Value/Revenue: 1.13
• Enterprise Value/Gross Profit: 5.40
• Enterprise Value/Ebitda: 1.85
• 1Y Price Target: $18.00
• Price Target Upside: 27.30% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 76 Outperform
• Price Target: $16.00 ▲( 13.15% Upside)

SWK Holdings demonstrates solid financial performance with strong liquidity and low leverage. Positive earnings call sentiment and strategic corporate events support a favorable outlook. However, mixed technical signals and the lack of a dividend yield slightly temper the overall score.

Positive Factors

Credit Quality

The resolution of three troublesome non-accrual loans has contributed to an improvement in SWKH's earnings outlook.

Earnings

SWKH reported GAAP EPS of $0.37, surpassing the estimate of $0.23, indicating an improved earnings outlook.

Stock Recommendation

The analyst reiterates a Buy rating, anticipating stock price appreciation of about 22% to the $21 price target.

Negative Factors

Earnings Power

Management's substantial portfolio moves to improve credit quality and monetize its royalties portfolio are expected to decrease the investment portfolio size by about 17%, lowering earnings power in the near term.

Investment Portfolio

The sale of the entire portfolio of pharma royalties at a slight premium to book value will increase cash materially, but earnings power should be reduced in the near term due to a smaller investment portfolio.

Tangible Book Value

The sale of most of its pharma royalty portfolio and $4/share special dividend has decreased the tangible book value of SWKH's healthcare finance segment.

SWK Holdings Business Overview & Revenue Model

Company Description

SWK Holdings Corporation, a specialty finance company that focuses on the healthcare sector. It operates in two segments, Finance Receivables and Pharmaceutical Development. The company provides customized financing solutions to a range of life science companies, including companies in the biotechnology, medical device, medical diagnostics and related tools, animal health, and pharmaceutical industries, as well as institutions and inventors. It also offers non-discretionary investment advisory services to institutional clients in separately managed accounts to invest in life science finance. In addition, the company engages in the pharmaceutical development, formulation and manufacturing, and licensing business through the Peptelligence platform. Further, it intends to out-license its internal product pipeline to create novel formulations using its proprietary technology to develop treatments for patients and caregivers. The company was formerly known as Kana Software, Inc. and changed its name to SWK Holdings Corporation in December 2009. SWK Holdings Corporation was founded in 1996 and is headquartered in Dallas, Texas.

How the Company Makes Money

SWK Holdings makes money through its core business of providing financing solutions to healthcare companies. The company earns revenue primarily from interest income on its debt investments and potential equity gains from its equity investments. By offering tailored financing options, SWK Holdings can charge interest and fees on the loans it provides, thereby generating a steady income stream. Additionally, any appreciation in the value of its equity investments contributes to the company's earnings. The company's focus on the healthcare sector allows it to leverage its expertise and relationships in this field, which can lead to more lucrative investment opportunities and partnerships.

SWK Holdings Financial Statement Overview

Summary

SWK Holdings exhibits solid financial health with impressive revenue growth and profitability, though there is a slight decrease in net profit margins and return on equity. The company's strong cash position and conservative balance sheet enhance its financial stability in the asset management sector.

Income Statement

SWK Holdings shows solid profitability with a stable Gross Profit Margin and strong Net Profit Margin over the years. The Gross Profit Margin for 2024 was 100%, as the revenue equals gross profit, indicating no cost of goods sold, typical in asset management. The Net Profit Margin decreased slightly from 42.08% in 2023 to 29.97% in 2024, reflecting a reduction in net income. The Revenue Growth Rate from 2023 to 2024 was 19.12%, showing positive growth but slower than in previous years. Despite these strengths, the decline in EBIT Margin and EBITDA Margin from 2023 to 2024 indicates profitability pressure.

Balance Sheet

The company's balance sheet is robust with a low Debt-to-Equity Ratio of 0.11 in 2024, reflecting conservative leverage. The Return on Equity (ROE) was 4.67% in 2024, down from 5.67% in 2023, indicating a slight decrease in efficiency in generating returns for shareholders. The Equity Ratio remained strong at 86.85% in 2024, providing a buffer against liabilities. Overall, SWK Holdings maintains a strong equity base with minimal reliance on debt, though the slight decrease in ROE could be monitored.

Cash Flow

SWK Holdings has demonstrated strong cash flow management with a healthy Free Cash Flow to Net Income Ratio of 1.70 in 2024, indicating efficient conversion of earnings to cash. The Operating Cash Flow to Net Income Ratio was 1.71, supporting strong cash generation from operations. The Free Cash Flow Growth Rate was 59.26% from 2023 to 2024, showcasing significant improvement in cash generation. These metrics indicate strong liquidity and financial flexibility.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
40.96M	44.99M	37.76M	41.48M	56.16M	36.71M
	Gross Profit
32.71M	42.78M	34.32M	34.53M	48.81M	32.44M
	EBIT
19.34M	11.59M	14.65M	15.48M	31.13M	9.81M
	EBITDA
28.91M	24.46M	20.66M	12.43M	37.45M	21.90M
	Net Income Common Stockholders
18.27M	13.49M	15.89M	13.49M	25.93M	5.20M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
6.16M	5.93M	4.50M	6.16M	43.90M	4.22M
	Total Assets
299.62M	332.24M	334.25M	299.62M	282.67M	273.90M
	Total Debt
2.44M	31.41M	43.13M	2.44M	8.00K	11.76M
	Net Debt
-3.71M	25.48M	38.63M	-3.71M	-42.85M	8.75M
	Total Liabilities
19.69M	43.55M	53.94M	19.69M	15.43M	33.39M
	Stockholders Equity
279.93M	288.69M	280.31M	279.93M	267.24M	240.51M
Cash Flow		Free Cash Flow
39.01M	22.91M	14.39M	7.91M	33.22M	15.33M
	Operating Cash Flow
39.25M	23.05M	14.89M	8.20M	34.30M	19.27M
	Investing Cash Flow
3.39M	-10.13M	-48.95M	-43.55M	25.76M	-35.17M
	Financing Cash Flow
-6.03M	-12.22M	33.14M	-1.36M	-20.20M	7.75M

SWK Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 14.14
• 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 SWKH, the sentiment is Positive. The current price of 14.14 is above the 20-day moving average (MA) of 13.91, above the 50-day MA of 13.84, and above the 200-day MA of 13.34, indicating a bullish trend. The MACD of 0.07 indicates Negative momentum. The RSI at 53.68 is Neutral, neither overbought nor oversold. The STOCH value of 68.85 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SWKH.

SWK Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SWKH	76 Outperform	$173.49M	9.57	6.38%	―	18.18%	54.41%
LIEN	75 Outperform	$232.08M	11.76	8.67%	11.60%	―	―
WHF	67 Neutral	$209.42M	22.90	3.07%	17.32%	-27.52%	-46.85%
Sector *	64 Neutral	$12.64B	9.78	7.67%	17015.08%	12.23%	-6.02%
NEWT	61 Neutral	$283.44M	5.64	18.18%	7.09%	21.99%	23.40%
TPVG	59 Neutral	$269.96M	7.25	10.68%	19.37%	22.53%	―
OXSQ	51 Neutral	$168.44M	605.13	-0.32%	17.80%	-338.17%	-97.99%

SWK Holdings Corporate Events

SWK Holdings Announces $10 Million Stock Buyback Plan

On May 19, 2025, SWK Holdings Corporation’s Board of Directors approved a plan to repurchase up to $10 million of its outstanding common stock by May 19, 2026. This move is part of a trading plan compliant with SEC rules, allowing flexibility in timing and volume based on market conditions, though the exact number of shares to be repurchased is not guaranteed.

The most recent analyst rating on (SWKH) stock is a Buy with a $22.00 price target. To see the full list of analyst forecasts on SWK Holdings stock, see the SWKH Stock Forecast page.

SWK Holdings Unveils Financial Strategy and Achievements

On May 15, 2025, SWK Holdings released an investor presentation detailing its financial strategies and performance metrics. The presentation highlighted the company’s use of Non-GAAP financial measures to provide a comprehensive view of its operations, emphasizing its focus on shareholder value creation through strategic financing and royalty monetization. The company reported significant achievements, including a 17.1% internal rate of return and a 1.43x multiple on invested capital from 44 exits, alongside a $51.3 million monetization of its performing royalty book. SWK Holdings also outlined its strategy to increase book value per share at a 10% compound annual growth rate and optimize its capital structure to enhance return on equity.

The most recent analyst rating on (SWKH) stock is a Buy with a $22.00 price target. To see the full list of analyst forecasts on SWK Holdings stock, see the SWKH Stock Forecast page.

SWK Holdings Announces $34M Royalty Sale Completion

On April 10, 2025, SWK Holdings Corporation announced the completion of a royalty sale to SCOF SPV I, LP for approximately $34 million, which involved the sale of the majority of its royalty portfolio. This transaction was seen as an attractive monetization of assets and led to the declaration of a special cash dividend of $4 per share, payable on May 8, 2025. The sale and dividend reflect SWK’s commitment to delivering value to shareholders, supported by its robust life science loan portfolio.

SWK Holdings Announces Royalty Portfolio Monetization

On March 19, 2025, SWK Holdings Corporation announced the monetization of its royalty portfolio through two transactions. ANI Pharmaceuticals exercised its buyout option on March 17, 2025, resulting in a $17.3 million payment to SWK. Additionally, SWK entered into an agreement with Soleus Capital to sell its remaining performing royalty portfolio for $34.0 million. The combined transactions total approximately $51.3 million, exceeding the portfolio’s book value by $1.0 million. SWK plans to use part of the proceeds for a cash dividend to shareholders, with details to be announced upon closing. This move underscores SWK’s strategy to realize asset value and potentially benefit stakeholders.

SWK Holdings Highlights Financial Strategies in Investor Presentation

On March 20, 2025, SWK Holdings released an investor presentation highlighting its financial strategies and performance metrics, including the use of Non-GAAP Financial Measures for a comprehensive view of its operations. The presentation emphasized SWK’s focus on shareholder value creation, with a strategy to increase book value per share and generate current income. In March 2025, SWK monetized its performing royalty for $51.3 million and plans to announce a dividend upon closing, reflecting its commitment to enhancing shareholder returns.