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uCloudlink Group, Inc. (UCL)
:UCL
US Market

uCloudlink Group (UCL) AI Stock Analysis

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uCloudlink Group

(NASDAQ:UCL)

Rating:70Outperform
Price Target:
$2.00
▲(9.29%Upside)
uCloudlink Group's overall score is driven by strong technical indicators and solid financial performance, although tempered by valuation concerns and earnings call challenges with declining gross profit and increased expenses. The absence of corporate events in the analysis ensures a focused evaluation.

uCloudlink Group (UCL) vs. SPDR S&P 500 ETF (SPY)

uCloudlink Group Business Overview & Revenue Model

Company DescriptionuCloudlink Group Inc. operates as a mobile data traffic sharing marketplace in the telecommunications industry. It provides uCloudlink 1.0, a model that focuses on cross-border travelers that need mobile data connectivity services in various countries; and operates portable Wi-Fi services under the Roamingman name in China and Malaysia, which provides global mobile data connectivity services, as well as offers GlocalMe portable Wi-Fi terminals and cloud SIM architecture for mobile virtual network operators, mobile network operators (MNOs), and portable Wi-Fi terminal rental companies. The company also offers uCloudlink 2.0, a model that provides mobile data connectivity services to local users through various MNOs; GlocalMe Inside, an implementation solution for smartphones and other smart hardware products, which enables them to access its cloud SIM architecture and SIM card pool; and GlocalMe, a world phone series. In addition, it provides IoT modules with GlocalMe Inside implementation to meet the demand for mobile data from various terminals, as well as provides integrated network solutions to its customers; SIM cards with prepaid data packages; and value-added services, such as advertisement. Further, it's platform-as-a-service/software-as-a-service offers modules, such as customer relationship management, operations and business support system, and SIM card enterprise resource planning and management. The company was incorporated in 2014 and is headquartered in Tsim Sha Tsui, Hong Kong.
How the Company Makes MoneyuCloudlink Group makes money through a combination of service fees, device sales, and partnerships. The company generates revenue from its mobile data traffic sharing services, where users pay for data access on a pay-as-you-go basis rather than traditional data plans. Additionally, uCloudlink sells its proprietary cloud SIM-enabled devices, such as mobile Wi-Fi hotspots and smartphones, which are equipped with its technology. Revenue is also bolstered by partnerships with telecommunications providers and other technology companies, allowing uCloudlink to expand its service offerings and reach a broader customer base. These partnerships can involve revenue-sharing agreements and joint ventures that enhance uCloudlink's market presence and service capabilities.

uCloudlink Group Earnings Call Summary

Earnings Call Date:May 21, 2025
(Q1-2025)
|
% Change Since: 40.77%|
Next Earnings Date:Aug 20, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted steady revenue growth and promising new product launches that are expected to drive future growth. However, there were significant challenges with declining gross profit, gross margins, and increased operating expenses, leading to lower adjusted net income and operating cash flow.
Q1-2025 Updates
Positive Updates
Revenue Increase
Total revenues for the first quarter of 2025 were US$18.7 million, representing an increase of 3.4% from US$18.1 million in the same period of 2024.
Innovation and Product Launches
Showcased innovative solutions at MWC Barcelona 2025, including eSIM Trio, CloudSIM Kit, PetPhone, MeowGo G50 Max, and G40 Pro. These products are attracting interest from global operators and enterprise customers.
Global Expansion
Full-speed 5G network coverage is now available in 90 countries and regions, reinforcing the leading position in the roaming market.
AI Integration
AI is being deployed internally to enhance operational efficiency and into solutions to improve user experience and ensure seamless global connectivity.
Strategic Partnerships
Engaged in advanced commercial discussions with multiple major operators worldwide, with several partnerships expected to be finalized in the coming months.
PetPhone Market Potential
PetPhone is receiving exceptional market validation in the pet care market, indicating potential for attracting more users.
Negative Updates
Decrease in Gross Profit
Overall gross profit was US$9.7 million in the first quarter of 2025, representing a decrease of 3.1% from US$10.0 million in the first quarter of 2024.
Decline in Gross Margin
Overall gross margin in the first quarter of 2025 was 51.7%, compared to 55.2% in the same period of 2024. The gross margin on services was 57.3%, down from 65.0% in 2024.
Increased Operating Expenses
Total operating expenses were US$9.9 million in the first quarter of 2025, compared to US$8.5 million in the same period in 2024, due to increased marketing and promotion expenditures.
Decrease in Adjusted Net Income
Adjusted net income was US$0.4 million in the first quarter of 2025, compared to US$1.3 million in the first quarter of 2024.
Decline in Operating Cash Flow
Operating cash inflow was US$0.2 million in the first quarter of 2025, compared to US$1.9 million in the same period of 2024.
Company Guidance
During the first quarter of 2025 earnings call, uCloudlink reported total revenues of $18.7 million, marking a 3.4% year-over-year increase. The company maintained a robust financial position with an adjusted net income of $0.4 million and a positive operating cash flow of $0.2 million, despite increased investments in new product marketing and sales initiatives. Average daily active terminals (DATs) totaled 308,863, a slight decrease of 0.3% from the previous year. Revenues from services reached $14.2 million, constituting 75.7% of total revenues, and gross profit stood at $9.7 million. Geographically, Japan contributed 40.4% of total revenues, with Mainland China, North America, and other regions contributing 31.2%, 12.9%, and 15.5%, respectively. The company anticipates second-quarter 2025 revenues between $23.0 million and $25.0 million, representing a 2.7% to 11.6% increase compared to the same period in 2024.

uCloudlink Group Financial Statement Overview

Summary
uCloudlink Group shows strong profitability with a Gross Profit Margin of 47.8% and a Net Profit Margin of 3.8%. Revenue growth is steady, and there's improved cash flow management. However, high liabilities relative to assets and a decline in EBIT and EBITDA require caution.
Income Statement
72
Positive
uCloudlink Group has shown a positive trajectory in profitability with a TTM Gross Profit Margin of 47.8% and a Net Profit Margin of 3.8%. Revenue has grown steadily, as evidenced by a 7.8% increase from 2023 to 2024. The company has improved its EBIT and EBITDA margins to 3.7% and 5.3%, respectively, indicating strong operational efficiency gains. However, the decline in EBIT and EBITDA from the previous annual report suggests a need for caution in sustaining operational performance.
Balance Sheet
65
Positive
The company's Debt-to-Equity Ratio of 0.49 reflects moderate leverage, supporting financial stability. The Return on Equity of 16.5% is impressive, indicating effective utilization of shareholder funds. The Equity Ratio stands at 34.0%, highlighting a balanced approach towards financing through equity. Despite these strengths, total liabilities remain high relative to total assets, suggesting potential risks in financial flexibility.
Cash Flow
68
Positive
uCloudlink Group has demonstrated a strong Free Cash Flow growth of 12.2% from 2023 to 2024, indicating improved cash generation capability. The Operating Cash Flow to Net Income Ratio of 2.13 suggests robust cash flow management. However, the Free Cash Flow to Net Income Ratio of 1.42, while positive, indicates room for improvement in converting net income into free cash flow.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue92.26M91.64M85.58M71.46M73.82M89.57M
Gross Profit44.05M44.36M41.97M32.53M21.83M28.30M
EBITDA4.90M6.94M3.78M-18.19M-43.73M-60.68M
Net Income3.51M4.56M2.81M-19.93M-46.33M-63.41M
Balance Sheet
Total Assets62.74M64.98M56.61M45.93M67.13M97.25M
Cash, Cash Equivalents and Short-Term Investments39.05M38.76M30.98M26.81M20.65M41.37M
Total Debt10.37M9.90M7.67M3.06M3.18M3.70M
Total Liabilities41.41M43.36M40.55M36.64M47.03M40.86M
Stockholders Equity21.33M21.62M16.05M9.29M20.09M56.39M
Cash Flow
Free Cash Flow4.98M5.19M4.44M3.98M-22.62M-3.77M
Operating Cash Flow7.48M9.19M6.51M4.40M-21.74M-2.04M
Investing Cash Flow-3.52M-3.76M-240.00K-162.00K-935.00K-35.44M
Financing Cash Flow2.53M1.73M2.51M3.54M735.00K26.68M

uCloudlink Group Technical Analysis

Technical Analysis Sentiment
Positive
Last Price1.83
Price Trends
50DMA
1.53
Positive
100DMA
1.36
Positive
200DMA
1.37
Positive
Market Momentum
MACD
0.09
Positive
RSI
54.01
Neutral
STOCH
16.54
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For UCL, the sentiment is Positive. The current price of 1.83 is below the 20-day moving average (MA) of 1.86, above the 50-day MA of 1.53, and above the 200-day MA of 1.37, indicating a neutral trend. The MACD of 0.09 indicates Positive momentum. The RSI at 54.01 is Neutral, neither overbought nor oversold. The STOCH value of 16.54 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for UCL.

uCloudlink Group Risk Analysis

uCloudlink Group disclosed 66 risk factors in its most recent earnings report. uCloudlink Group 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 2 New Risks
1.
Since we are a Cayman Islands exempted company, the rights of our shareholders may be more limited than those of shareholders of a company organized in the United States. Q4, 2023
2.
There are uncertainties regarding the interpretation and enforcement of PRC laws, rules and regulations. Q4, 2023

uCloudlink Group Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
73
Outperform
$186.67M79.484.73%13.85%38.33%
UCUCL
70
Outperform
$69.17M19.5718.27%7.68%196.83%
65
Neutral
$265.98M-5.79%6.29%-5.46%-76.33%
61
Neutral
$41.24B-0.79-14.21%3.80%2.39%-73.52%
56
Neutral
$344.75M-5.17%9.62%
47
Neutral
$119.77M-39.70%-0.51%-34.03%
47
Neutral
$39.47M174.77%-1.52%22.36%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
UCL
uCloudlink Group
1.83
0.18
10.91%
ATNI
ATN International
17.48
-2.87
-14.10%
CXDO
Crexendo
6.43
3.38
110.82%
SIFY
Sify Technologies
4.76
2.17
83.78%
FNGR
FingerMotion
2.08
0.10
5.05%
KORE
KORE Group Holdings
2.30
0.93
67.88%
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.Date of analysis: Jun 28, 2025