SATO Technologies (SATO) AI Stock Analysis

• Market Cap: C$6.54M
• Dividend Yield: N/A
• Average Volume (3M): 60.57K
• Price to Earnings (P/E): ―
• Beta (1Y): 3.35
• Revenue Growth: -30.56%
• EPS Growth: -189.35%
• Country: CA
• Employees: 11
• Sector: Technology
• Sector Strength: 88
• Industry: Financial - Capital Markets
• EPS (TTM): >-0.01
• Shares Outstanding: 52,336,690
• 10 Day Avg. Volume: 36,659
• 30 Day Avg. Volume: 60,574
• PEG Ratio: 0.26
• Price to Book (P/B): 1.88
• Price to Sales (P/S): 0.98
• P/FCF Ratio: -1.06
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 46 Neutral
• Price Target: C$0.15 ▲(16.92% Upside)

SATO Technologies' overall stock score reflects significant financial challenges, including negative profitability and cash flow issues, which are the most impactful factors. The technical analysis provides a mixed outlook with some short-term positive momentum, but the valuation metrics suggest potential overvaluation. The absence of earnings call data and corporate events means these factors do not influence the score.

Positive Factors

Revenue Streams

Diverse revenue streams from hardware, consumables, and software provide stability and resilience against market fluctuations.

Market Position

Strong market position in key industries like manufacturing and healthcare ensures sustained demand and competitive advantage.

Leverage Management

Improved leverage management indicates better financial discipline, enhancing long-term stability and reducing risk.

Negative Factors

Profitability Challenges

Persistent profitability issues highlight operational inefficiencies, impacting long-term financial health and growth potential.

Cash Flow Issues

Negative cash flow suggests poor cash management, limiting the company's ability to invest in growth and meet financial obligations.

Revenue Decline

Significant revenue decline indicates potential loss of market share or demand, threatening future growth and market position.

SATO Technologies Business Overview & Revenue Model

Company Description

SATO Technologies Corp. engages in the cryptocurrency mining business in Canada. The company engages in the business of utilizing equipment to solve computational problems to validate transactions on the blockchain; and provision of compute power for bitcoin mining. It also provides hosting services, including mining equipment; and operates a data center for digital asset mining. The company was formerly known as Canada Computational Unlimited Corp. SATO Technologies Corp. was founded in 2017 and is headquartered in Toronto, Canada.

How the Company Makes Money

SATO generates revenue through multiple streams including the sale of hardware such as barcode printers and RFID systems, along with consumables like labels and tags. The company also earns income from its software solutions, which enhance data management and operational efficiency. Additionally, SATO offers maintenance and support services for its products, contributing to recurring revenue. Strategic partnerships with technology providers and industry leaders further enhance its market reach and sales potential, while a focus on innovative solutions in automation and data capture drives ongoing demand for its offerings.

SATO Technologies Financial Statement Overview

Summary

SATO Technologies shows mixed financial performance. While profitability metrics improved, with net profit margin rising to 7.30% and EBIT margin to 13.08%, revenue growth declined by 8.33%. The balance sheet shows reduced leverage with a debt-to-equity ratio of 1.05, but cash flow challenges persist with negative operating and free cash flows.

Income Statement

SATO Technologies shows a mixed performance in its income statement. The company experienced a decline in revenue growth rate by 8.33% in the latest year, indicating challenges in maintaining sales momentum. However, profitability metrics such as the net profit margin improved to 7.30% from 4.42% the previous year, and the EBIT margin increased to 13.08%, reflecting better cost management. Despite these improvements, the gross profit margin decreased significantly, suggesting potential issues with cost of goods sold or pricing strategy.

Balance Sheet

The balance sheet reflects a moderate financial position. The debt-to-equity ratio improved to 1.05 from 1.76, indicating a reduction in leverage and a more balanced capital structure. Return on equity increased to 14.08%, showcasing improved profitability relative to shareholder equity. However, the equity ratio remains low, suggesting limited equity financing and potential vulnerability to financial instability.

Cash Flow

Cash flow analysis reveals significant challenges. Operating cash flow and free cash flow are both negative, with a decline in free cash flow growth by 10.02%. The operating cash flow to net income ratio is negative, indicating that the company is not generating sufficient cash from operations to cover its net income. Although the free cash flow to net income ratio is positive, it is primarily due to the negative net income in previous periods, highlighting cash flow management issues.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	12.62M	16.10M	17.56M	10.62M	6.12M	1.86M
Gross Profit	1.08M	3.05M	5.17M	2.33M	2.82M	695.35K
EBITDA	1.25M	5.06M	4.22M	-5.67M	-391.78K	658.94K
Net Income	-2.03M	1.17M	776.50K	-8.00M	-1.73M	-855.42K
Balance Sheet
Total Assets	12.73M	18.01M	21.68M	15.51M	12.50M	3.13M
Cash, Cash Equivalents and Short-Term Investments	640.62K	658.49K	583.15K	359.39K	794.32K	294.02K
Total Debt	5.62M	8.75M	11.64M	6.37M	1.39M	2.13M
Total Liabilities	6.05M	9.67M	15.06M	10.74M	4.68M	2.29M
Stockholders Equity	6.68M	8.34M	6.62M	4.77M	7.82M	834.50K
Cash Flow
Free Cash Flow	-24.99M	-14.76M	-13.42M	-6.64M	-6.23M	89.61K
Operating Cash Flow	-24.96M	-13.96M	-8.68M	648.79K	-2.73M	350.95K
Investing Cash Flow	29.85M	17.06M	4.23M	-7.28M	-3.50M	-247.68K
Financing Cash Flow	-4.67M	-3.11M	4.75M	6.30M	6.76M	81.54K

SATO Technologies Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.13
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:SATO, the sentiment is Negative. The current price of 0.13 is below the 20-day moving average (MA) of 0.15, below the 50-day MA of 0.16, and below the 200-day MA of 0.15, indicating a bearish trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 37.65 is Neutral, neither overbought nor oversold. The STOCH value of 38.10 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:SATO.

SATO Technologies Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
SATO	46 Neutral	C$6.54M	-4.51	-27.43%	―	-30.56%	-189.35%
CSTR	40 Underperform	C$4.24M	-0.74	-108.07%	―	-90.58%	-43.16%
CK	19 Underperform	―	―	―	―	―	60.00%

SATO Technologies Corporate Events

SATO Technologies Reports Q3 2025 Results and Advances AI Transition

SATO Technologies Corp. reported improved financial performance for Q3 2025, despite challenges from the April 2024 Bitcoin Halving and increased network difficulty. The company achieved a 28% increase in revenue compared to Q3 2024, reduced its net loss significantly, and enhanced operational stability. SATO is implementing strategic measures to preserve cash and advance its transition towards AI infrastructure, including a potential sale of non-core equipment and a temporary reduction in mining fleet power consumption. The company is also planning to repurpose part of its data center for high-density AI compute, with initial GPU deployment and AI Factory 1 engineering underway. These initiatives aim to position SATO as a leading provider of AI infrastructure, supported by a digital asset treasury strategy.