INNOVATE Corp (VATE) AI Stock Analysis

• Market Cap: $66.68M
• Dividend Yield: N/A
• Average Volume (3M): 27.07K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.87
• Revenue Growth: -27.08%
• EPS Growth: -115.05%
• Country: US
• Employees: 3,135
• Sector: Industrials
• Sector Strength: 76
• Industry: Engineering & Construction
• EPS (TTM): -1.67
• Shares Outstanding: 13,336,149
• 10 Day Avg. Volume: 24,574
• 30 Day Avg. Volume: 27,065
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 11.39
• Enterprise Value/Revenue: 0.76
• Enterprise Value/Gross Profit: 4.09
• Enterprise Value/Ebitda: 15.07
• 1Y Price Target: $5.00
• Price Target Upside: -5.84% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 45 Neutral
• Price Target: $5.00 ▼(-5.84% Downside)

The overall stock score of 45 reflects significant financial challenges and valuation concerns, which are partially offset by some positive technical indicators and strategic progress highlighted in the earnings call. The company's high leverage and ongoing losses are the most significant factors impacting the score.

INNOVATE Corp Business Overview & Revenue Model

Company Description

INNOVATE Corp., through its subsidiaries, operates in infrastructure, life sciences, and spectrum areas in the United States. It provides industrial construction, structural steel, and facility maintenance services for use in commercial, industrial, and infrastructure construction projects, such as buildings and office complexes, hotels and casinos, convention centers, sports arenas and stadiums, shopping malls, hospitals, dams, bridges, mines, metal processing, refineries, pulp and paper mills, and power plants. The company also fabricates trusses and girders; and fabricates and erects water pipe, water storage tanks, tunnel liners, pressure vessels, strainers, filters, separators, and other customized products. In addition, it offers integrated solutions for digital engineering, modeling and detailing, construction, heavy equipment installation, and facility services; and steel and rebar detailing, and BIM modeling and management services, as well as equipment used in the oil, gas, petrochemical, and pipeline industries. Further, the company develops products for early osteoarthritis of the knee, and aesthetic and medical technologies for the skin. Additionally, it operates over-the-air broadcasting stations and Azteca America, a Spanish-language broadcast network. The company was formerly known as HC2 Holdings, Inc. and changed its name to INNOVATE Corp. in September 2021. The company was incorporated in 1994 and is headquartered in New York, New York.

How the Company Makes Money

INNOVATE Corp generates revenue through multiple streams, primarily by offering subscription-based software services and licensing fees for its proprietary technologies. The company also earns money from consulting services, where it partners with businesses to implement customized tech solutions. Additionally, VATE has established strategic alliances with key players in the tech industry, enabling them to create bundled service offerings that enhance their market reach and drive higher sales volumes. The growing demand for cloud computing and AI solutions further contributes to its earnings, as more businesses seek to adopt these technologies for improved productivity and competitiveness.

INNOVATE Corp Financial Statement Overview

Summary

INNOVATE Corp faces significant financial challenges, with declining revenues, persistent losses, and high leverage. While there are some positive aspects, such as stable gross profit margins and positive cash flow ratios, the overall financial health is concerning. The company needs to address operational inefficiencies and reduce reliance on debt to improve its financial position and ensure long-term sustainability.

Income Statement

INNOVATE Corp's income statement reveals challenges with profitability and revenue growth. The TTM data shows a negative net profit margin of -3.91% and a declining revenue growth rate of -6.67%. Gross profit margin remains relatively stable at 18.88%, but the company struggles with negative EBIT and EBITDA margins, indicating operational inefficiencies. The overall trend shows declining revenues and persistent losses, which are concerning for future profitability.

Balance Sheet

The balance sheet highlights significant financial leverage with a high debt-to-equity ratio of 33.99 in the TTM period. The company's equity is minimal, posing a risk of financial instability. Return on equity is positive at 37.49%, but this is due to the low equity base rather than strong performance. The equity ratio is weak, indicating heavy reliance on debt financing, which could be risky in volatile market conditions.

Cash Flow

Cash flow analysis shows mixed results. Operating cash flow is positive, but free cash flow growth is negative at -8.70% in the TTM period. The operating cash flow to net income ratio is low, suggesting limited cash generation relative to net losses. However, the free cash flow to net income ratio is positive, indicating some ability to cover net losses with free cash flow. Overall, cash flow management needs improvement to support financial stability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	995.00M	1.11B	1.42B	1.64B	1.21B	1.01B
Gross Profit	185.70M	208.80M	216.00M	221.40M	183.70M	167.30M
EBITDA	50.40M	-99.00M	69.80M	53.10M	16.00M	54.90M
Net Income	-75.90M	-35.80M	-37.60M	-40.80M	-79.80M	-46.40M
Balance Sheet
Total Assets	890.90M	891.10M	1.04B	1.15B	1.08B	6.74B
Cash, Cash Equivalents and Short-Term Investments	33.40M	48.80M	80.80M	80.40M	45.50M	4.69B
Total Debt	689.90M	719.20M	771.90M	714.40M	626.30M	561.50M
Total Liabilities	1.10B	1.03B	1.18B	1.18B	1.07B	6.14B
Stockholders Equity	-224.80M	-180.40M	-149.10M	-103.70M	-65.50M	559.80M
Cash Flow
Free Cash Flow	2.10M	-9.90M	8.10M	-30.20M	2.90M	23.90M
Operating Cash Flow	23.10M	9.10M	26.50M	-9.50M	27.00M	41.70M
Investing Cash Flow	71.80M	-13.90M	39.10M	-22.50M	-223.20M	162.30M
Financing Cash Flow	-162.80M	-26.50M	-65.30M	68.10M	4.30M	-204.60M

INNOVATE Corp Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5.31
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VATE, the sentiment is Positive. The current price of 5.31 is above the 20-day moving average (MA) of 4.99, above the 50-day MA of 5.28, and below the 200-day MA of 6.63, indicating a neutral trend. The MACD of -0.12 indicates Negative momentum. The RSI at 53.88 is Neutral, neither overbought nor oversold. The STOCH value of 77.91 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VATE.

INNOVATE Corp Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ECG	78 Outperform	$4.01B	24.19	33.00%	―	21.87%	18.56%
ESOA	70 Outperform	$173.67M	60.89	5.24%	0.58%	9.52%	-88.22%
ORN	65 Neutral	$285.70M	25.51	7.90%	―	15.85%	―
Sector *	64 Neutral	$10.95B	16.37	8.81%	1.96%	2.68%	-15.33%
SHIM	46 Neutral	$117.81M	―	-679.42%	―	-0.77%	30.69%
VATE	45 Neutral	$66.68M	―	17.11%	―	-27.08%	-115.05%
SLND	43 Neutral	$221.86M	―	-41.62%	―	-23.35%	-49.27%

INNOVATE Corp Corporate Events

INNOVATE Corp Reports Q2 2025 Revenue Decline

INNOVATE Corp announced its second quarter 2025 results, highlighting a decrease in consolidated revenue by 22.7% compared to the previous year, primarily due to declines in the Infrastructure and Spectrum segments. Despite the revenue drop, the company emphasized its strategic refinancing transactions that extend debt maturities, and noted growth in its Life Sciences segment, particularly with the FDA-approved MediBeacon system and R2’s increased sales. The company is also exploring new datacasting opportunities in its Spectrum segment, aiming for improved performance in the latter half of the year.

INNOVATE Corp Completes Debt Refinancing Transactions

On August 4, 2025, INNOVATE Corp completed a series of refinancing transactions to extend the maturities of 81.7% of its outstanding debt as of June 30, 2025. This strategic move includes the exchange of senior secured notes, convertible notes, and amendments to various credit agreements, which is expected to enhance the company’s financial flexibility and potentially improve its market positioning.

INNOVATE Corp Announces Successful Exchange Offer Results

INNOVATE Corp. announced early results of its exchange offer for its 8.5% Senior Secured Notes due 2026, with a successful tender of 99.41% of the notes, meeting the minimum exchange condition. The company will extend eligibility for the Total Early Exchange Consideration until the expiration deadline, with early settlement expected on August 4, 2025, and final settlement on August 15, 2025. This move aims to enhance the company’s financial structure by exchanging notes for newly issued 10.5% Senior Secured Notes due 2027, which include updated covenants and an increased interest rate.

INNOVATE Corp Announces Dividend from DBM Global

On July 28, 2025, INNOVATE Corp. announced that its subsidiary, DBM Global Inc., will distribute a cash dividend of approximately $4.4 million, or $1.14 per share, to its stockholders on August 21, 2025. As the largest stockholder, INNOVATE expects to receive around $4 million of this payout, highlighting its significant stake in DBM Global and the financial benefits accruing from this investment.

INNOVATE Corp Announces Debt Refinancing Plans

On July 17, 2025, INNOVATE Corp. announced plans to refinance its debt through a series of transactions, including exchanging convertible senior notes and senior secured notes, extending its revolving credit agreement, and amending other financial agreements. These actions aim to extend debt maturities and improve financial flexibility, potentially enhancing the company’s market position and stability.

INNOVATE Corp Annual Meeting Decisions Announced

INNOVATE Corp held its Annual Meeting of Stockholders on June 12, 2025, where key decisions were made regarding the company’s governance and executive compensation. Stockholders elected four directors to the board, approved the compensation of executive officers, decided to hold annual Say on Pay Votes, and ratified the appointment of BDO USA, P.C. as the independent accounting firm for the fiscal year ending December 31, 2025.