Unusual Machines Inc. (UMAC) AI Stock Analysis

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Unusual Machines Inc.

(NYSE MKT:UMAC)

Rating:41Neutral

Price Target:―

Unusual Machines Inc. faces significant challenges with profitability and sustainability, as reflected in its low financial performance score. The technical analysis indicates volatility, with bearish sentiment prevailing. Valuation is unattractive due to negative earnings. The earnings call showed mixed results with some positive strategic developments, while recent corporate events indicate potential for future growth. These factors result in an overall low stock score.

Positive Factors

Financial Performance

UMAC reported 2Q25 results with revenue of $2.1M, +51% y/y, above our estimate and consensus.

Government Support

UMAC's pivot to focus on providing a domestic supply of motors and other drone components is backed by government support for the domestic drone industry.

Market Positioning

UMAC is well-positioned to capture share in the ~$620M U.S. component market and drive substantial growth.

Negative Factors

Financial Sustainability

The company's annualized burn rate is around $3.5M, and capital will likely be needed by early-2026.

Tariff Impact

Gross margin of 24.3% was below our estimate of 30% and down from 27.7% in 4Q24, driven by increased tariff-related expenses.

Unusual Machines Inc. (UMAC) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$300.73M

Dividend YieldN/A

Average Volume (3M)4.83M

Price to Earnings (P/E)―

Beta (1Y)2.72

Revenue Growth279.38%

EPS Growth-468.91%

CountryUS

Employees16

SectorGeneral

Sector StrengthN/A

IndustryShell Companies

Share Statistics

EPS (TTM)-0.32

Shares Outstanding30,437,786

10 Day Avg. Volume2,570,289

30 Day Avg. Volume4,829,067

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)N/A

P/FCF RatioN/A

Enterprise Value/Market Cap0.49

Enterprise Value/Revenue21.17

Enterprise Value/Gross Profit83.73

Enterprise Value/Ebitda-4.36

Forecast

1Y Price Target

$15.50

Price Target Upside54.23% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering1

Unusual Machines Inc. Business Overview & Revenue Model

Company DescriptionUnusual Machines, Inc. designs, manufactures, and sells ultra-low latency video goggles for drone pilots. It also operates a drone-focused e-commerce marketplace. The company was formerly known as AerocarveUS Corporation and changed its name to Unusual Machines, Inc. in July 2022. Unusual Machines, Inc. was incorporated in 2019 and is based in San Juan, Puerto Rico.

How the Company Makes MoneyUMAC generates revenue through the sale of its advanced robotics and automation systems to businesses across multiple sectors. The company offers both direct sales and leasing options, allowing clients to choose the most suitable financial model for their needs. Additionally, UMAC provides ongoing maintenance and support services, which contribute to recurring revenue streams. The company may also engage in strategic partnerships with other technology firms to co-develop solutions, thereby expanding its reach and creating additional revenue opportunities. Revenue is further bolstered by licensing its proprietary technology to other companies, enabling them to incorporate UMAC's innovations into their own products.

Unusual Machines Inc. Earnings Call Summary

Earnings Call Date:Aug 14, 2025

(Q2-2025)

% Change Since: 1.93%|

Next Earnings Date:Nov 13, 2025

Earnings Call Sentiment Positive

The earnings call presented a strong performance in terms of revenue growth and cash position, along with strategic expansion and acquisition plans. However, challenges such as increased tariff costs and higher operating expenses leading to a net loss were noted. The positive aspects slightly outweigh the negatives, pointing towards a cautiously optimistic outlook.

Q2-2025 Updates

Positive Updates

Record Revenue Growth

Unusual Machines reported its highest revenue quarter of all time for Q2 2025, marking the fifth consecutive record-breaking quarter with a 51% increase over Q2 last year, generating $2.12 million in sales.

Increased Gross Margin and Enterprise Sales

The company achieved a 37% gross margin in Q2 2025, up from 31% year-to-date, with enterprise sales surpassing 30% of total sales.

Strong Cash Position

Unusual Machines increased its cash position to over $80 million after raising $44.9 million in Q3, with no debt reported.

Expansion and Hiring Plans

The company is expanding its workforce from 19 to 50 employees by the end of 2025 and is setting up new facilities for motor production and headset assembly in Orlando.

Strategic Acquisitions

Unusual Machines expects to close the purchase of Rotor Lab in Australia in Q3 2025, pending final approval from the Australian government.

Negative Updates

Increased Tariff Costs

The company faced increased tariff costs during Q2 2025, which they were able to pass on to customers, but remain a challenge moving forward.

Operating Expenses and Net Loss

Operating expenses increased due to setup costs for new facilities, and the company reported a net loss of approximately $6.9 million, including $6.1 million of non-recurring and non-cash costs.

Company Guidance

During the second quarter earnings call for Unusual Machines, guidance was provided with a focus on several key metrics and future expectations. The company reported a record revenue of $2.12 million, marking a 51% growth compared to the same quarter last year, and achieved a gross margin of 37%. They anticipate the delivery of their first motors in September 2025 and expect to close the acquisition of Rotor Lab in the third quarter. The workforce is projected to grow from 29 to 50 employees by the end of 2025. Unusual Machines also highlighted their strong cash position, starting the quarter with $5 million, ending with $38.9 million, and having raised an additional $44.9 million, which positions them comfortably with over $80 million in cash. The company aims to become cash flow positive by 2026, targeting $20 million to $30 million in annual revenue to reach that goal. They also expect the U.S. drone market to expand significantly and are preparing to scale their production and supply chains accordingly while maintaining low cash burn.

Unusual Machines Inc. Financial Statement Overview

Summary

Unusual Machines Inc. faces significant profitability and cash flow challenges despite a large revenue increase. The company benefits from low leverage, but operational inefficiencies and poor cash flow sustainability are major concerns for long-term viability.

Income Statement

Negative

The company shows a dramatic increase in revenue from 2023 to 2024, but this is accompanied by substantial negative net income and EBIT margins, indicating operational inefficiencies and potential sustainability concerns. The net profit margin is deeply negative, suggesting the company is not currently profitable.

Balance Sheet

Negative

The company has a high equity ratio, indicating low leverage and a solid equity base, which is a potential strength. However, the significant negative net income impacts the return on equity negatively. The debt levels are low, suggesting low financial risk from debt obligations.

Cash Flow

Negative

The company has negative operating and free cash flows, which is a red flag for sustainability. However, there is a significant inflow from financing activities, possibly indicating reliance on external funding to maintain operations.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	6.99M	5.57M	158.28M	0.00	4.99K
Gross Profit	1.77M	1.47M	158.28M	-885.00	4.99K
EBITDA	-33.96M	-31.80M	-2.38M	-1.24M	-161.88K
Net Income	-34.14M	-31.98M	-2.38M	-1.24M	-161.88K
Balance Sheet
Total Assets	17.28M	16.11M	1.53M	3.33M	3.90M
Cash, Cash Equivalents and Short-Term Investments	5.00M	3.76M	894.77K	3.10M	3.79M
Total Debt	313.90K	329.99K	0.00	0.00	0.00
Total Liabilities	1.39M	1.29M	114.50K	120.94K	0.00
Stockholders Equity	15.89M	14.82M	1.41M	3.21M	3.90M
Cash Flow
Free Cash Flow	-3.99M	-4.00M	-1.78M	-1.24M	-162.82K
Operating Cash Flow	-3.99M	-4.00M	-1.78M	-1.23M	-162.82K
Investing Cash Flow	-851.95M	-852.80K	-3.16K	-4.58K	0.00
Financing Cash Flow	4.36B	7.71M	-424.93K	549.90K	3.95M

Unusual Machines Inc. Technical Analysis

Technical Analysis Sentiment

Positive

Last Price10.05

Price Trends

50DMA

9.53

Positive

100DMA

7.59

Positive

200DMA

8.49

Positive

Market Momentum

MACD

0.13

Positive

RSI

49.28

Neutral

STOCH

22.77

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For UMAC, the sentiment is Positive. The current price of 10.05 is above the 20-day moving average (MA) of 10.01, above the 50-day MA of 9.53, and above the 200-day MA of 8.49, indicating a neutral trend. The MACD of 0.13 indicates Positive momentum. The RSI at 49.28 is Neutral, neither overbought nor oversold. The STOCH value of 22.77 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for UMAC.

Unusual Machines Inc. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (56)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	56 Neutral	$6.59B	7.56	-9.67%	6.26%	14.96%	-2.21%
UMAC	41 Neutral	$300.73M	―	-110.81%	―	279.38%	-468.91%
IVCAF	―	$71.57M	78.94	-0.58%	―	―	―
SVII	―	$118.56M	117.02	2.67%	―	―	―
ISRL	―	$80.67M	697.75	2.19%	―	―	―
OAKU	―	$63.57M	692.11	0.01%	―	―	―
BAYA	―	$38.77M	92.59	2.22%	―	―	―

* General Sector Average

Performance Comparison

UMAC

Unusual Machines Inc.

9.75

8.16

513.21%

IVCAF

Investcorp AI Acquisition

11.02

-0.45

-3.92%

SVII

Spring Valley Acquisition Corp. II Class A

12.08

0.92

8.24%

ISRL

Israel Acquisitions Corp. Class A

12.45

1.35

12.16%

OAKU

Oak Woods Acquisition Corporation Class A

11.80

0.74

6.69%

BAYA

Bayview Acquisition Corp Class A

11.13

0.79

7.64%

Unusual Machines Inc. Corporate Events

Business Operations and StrategyFinancial Disclosures

Unusual Machines Inc. Highlights Strategic Growth in Drone Market

Positive

Mar 17, 2025

On March 17, 2025, Unusual Machines, Inc. presented at an investor conference, highlighting its strategic growth in the American drone market. The company reported significant revenue increases, a strong cash position, and no debt, positioning itself to capitalize on new U.S. legislation favoring domestic drone production. The company is expanding its market presence with a focus on organic growth, acquisitions, and leveraging its B2C foundation to drive B2B and B2G sales, particularly in the defense sector.

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: Apr 25, 2025