INNOVATE Corp (VATE) AI Stock Analysis

• Market Cap: $68.14M
• Dividend Yield: N/A
• Average Volume (3M): 26.90K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.98
• Revenue Growth: -10.69%
• EPS Growth: -81.71%
• Country: US
• Employees: 3,135
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): -0.71
• Shares Outstanding: 13,655,062
• 10 Day Avg. Volume: 53,214
• 30 Day Avg. Volume: 26,900
• PEG Ratio: 0.04
• Price to Book (P/B): -0.36
• Price to Sales (P/S): 0.06
• P/FCF Ratio: -6.54
• Enterprise Value/Market Cap: 11.13
• Enterprise Value/Revenue: 0.69
• Enterprise Value/Gross Profit: 4.05
• Enterprise Value/Ebitda: 16.78
• 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: 51 Neutral
• Price Target: $5.50 ▲(8.91% Upside)
• Action: Reiterated Date: 02/02/26
• Date: Action: Reiterated 02/02/26

The score is held back primarily by weak financial quality (loss-making profile and balance-sheet stress with negative equity), despite improving cash flow and revenue growth. Technical momentum is supportive (price above key moving averages with positive MACD), and earnings-call updates show growth/backlog strength but also meaningful margin pressure and elevated debt.

Positive Factors

Strong revenue growth and backlog

Sustained double‑digit top‑line growth and a large, rising backlog reflect durable end‑market demand and provide multi‑period revenue visibility. This supports capacity utilization, long‑lead project execution and predictable cash inflows that underpin medium‑term operational planning.

Regulatory approvals expanding addressable markets

Regulatory clearance in China opens a major healthcare market for MediBeacon’s diagnostic product, increasing long‑term commercial runway. Approvals create structural revenue opportunities, support product credibility, and enable multi‑region rollouts and recurring consumable and service revenues.

Material improvement in free cash flow

A sharp rise in free cash flow indicates improving cash conversion and operational discipline, enhancing the firm's ability to fund capex, service debt, and invest in growth without immediate equity raises. If sustained, this materially reduces refinancing and liquidity risk.

Negative Factors

Negative equity and balance‑sheet stress

Negative equity signals structural solvency stress and distorts return metrics. It constrains strategic flexibility, increases refinancing vulnerability, and can trigger covenant breaches or higher borrowing costs, making long‑term investment and M&A activity harder without substantive recapitalization.

High absolute indebtedness

Elevated debt levels relative to available liquidity (cash $35.5M) create persistent interest and refinancing risk. High leverage limits capital allocation, forces prioritization of debt service over growth initiatives, and raises exposure to rate moves or downturns over the medium term.

Margin compression and ongoing unprofitability

Declining gross and EBITDA margins—notably large compression in the Infrastructure segment—combined with a negative net margin indicate structural profit challenges. Persistent margin pressure impairs the company's ability to self‑fund growth, deleverage, and achieve sustainable free cash generation.

INNOVATE Corp Business Overview & Revenue Model

Company Description

INNOVATE Corp (VATE) is a forward-thinking technology company specializing in cutting-edge solutions across various sectors including artificial intelligence, renewable energy, and advanced manufacturing. The company focuses on developing innovative products and services that enhance efficiency and sustainability for businesses and consumers alike, leveraging its expertise in software development, hardware integration, and data analytics.

How the Company Makes Money

INNOVATE Corp generates revenue through multiple streams, primarily by selling proprietary software solutions and hardware products designed for industrial automation and energy management. The company also offers consulting services to help clients implement its technologies and optimize their operations. Additionally, INNOVATE Corp has established significant partnerships with key players in the tech and energy sectors, enabling joint ventures and collaborative projects that further drive income. Revenue is supplemented by licensing agreements and maintenance contracts for ongoing support and updates, ensuring a steady cash flow from existing customers.

INNOVATE Corp Financial Statement Overview

Summary

Financial health is pressured by weak profitability and high leverage. While revenue is growing (TTM +10.54%) and free cash flow improved sharply (TTM FCF growth +235.71%), the company still posts a negative net margin (-7.63%) and the balance sheet shows significant distress with negative equity and a negative debt-to-equity (-3.07).

Income Statement

INNOVATE Corp's income statement shows a mixed performance. The TTM (Trailing-Twelve-Months) revenue growth rate is positive at 10.54%, indicating a recovery from previous declines. However, the company struggles with profitability, as evidenced by a negative net profit margin of -7.63% and a low EBIT margin of 1.90%. The gross profit margin is moderate at 18.66%, suggesting some efficiency in cost management, but overall profitability remains a concern.

Balance Sheet

The balance sheet reveals significant financial leverage, with a negative debt-to-equity ratio of -3.07, indicating high debt levels relative to negative equity. This poses a risk to financial stability. The return on equity is positive at 40.14%, but this is due to negative equity, which distorts the metric. The equity ratio is negative, reflecting the company's financial distress and potential solvency issues.

Cash Flow

Cash flow analysis shows improvement, with a substantial free cash flow growth rate of 235.71% in the TTM period. The operating cash flow to net income ratio is low at 2.65%, indicating limited cash generation relative to net income. However, the free cash flow to net income ratio is positive at 9.09%, suggesting some ability to generate cash despite net losses. Overall, cash flow management shows signs of recovery but remains a challenge.

Breakdown	TTM	Mar 2025	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.10B	1.11B	1.42B	1.64B	1.21B	716.90M
Gross Profit	187.20M	208.80M	216.00M	221.40M	183.70M	128.40M
EBITDA	45.20M	72.90M	63.10M	62.80M	31.80M	54.90M
Net Income	-69.80M	-34.60M	-35.20M	-35.90M	-227.50M	-92.00M
Balance Sheet
Total Assets	913.20M	891.10M	1.04B	1.15B	1.08B	6.72B
Cash, Cash Equivalents and Short-Term Investments	35.50M	48.80M	80.80M	80.40M	45.50M	45.30M
Total Debt	723.70M	719.20M	771.90M	785.30M	684.80M	604.30M
Total Liabilities	1.12B	1.05B	1.20B	1.18B	1.09B	6.11B
Stockholders Equity	-224.20M	-180.40M	-165.50M	-103.70M	-84.30M	570.20M
Cash Flow
Free Cash Flow	61.10M	-9.90M	8.10M	-30.20M	65.40M	23.30M
Operating Cash Flow	86.90M	9.10M	26.50M	-9.50M	89.50M	41.10M
Investing Cash Flow	-25.00M	-13.90M	23.20M	-22.50M	-299.20M	99.20M
Financing Cash Flow	-77.00M	-26.50M	-49.40M	68.10M	17.80M	-141.60M

INNOVATE Corp Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 5.05
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VATE, the sentiment is Negative. The current price of 5.05 is below the 20-day moving average (MA) of 5.36, below the 50-day MA of 5.19, and below the 200-day MA of 5.26, indicating a bearish trend. The MACD of -0.08 indicates Positive momentum. The RSI at 41.19 is Neutral, neither overbought nor oversold. The STOCH value of 16.17 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for VATE.

INNOVATE Corp Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
ESOA	58 Neutral	$262.00M	105.79	3.67%	1.11%	16.80%	-98.32%
SHIM	52 Neutral	$123.92M	-2.07	―	―	-3.64%	53.82%
VATE	51 Neutral	$68.14M	-0.93	―	―	-10.69%	-81.71%
SUNE	48 Neutral	$5.08M	>-0.01	-116.57%	―	-1.41%	98.90%
MSW	45 Neutral	$14.40M	-19.40	-578.91%	―	23.25%	-343.35%

INNOVATE Corp Corporate Events

INNOVATE Corp Subsidiary DBM Global Declares Cash Dividend

On February 2, 2026, INNOVATE Corp. announced that its operating subsidiary DBM Global Inc. will pay a cash dividend of approximately $5 million, or $1.30 per share, on February 24, 2026 to stockholders of record as of February 9, 2026, with INNOVATE, as DBM Global’s largest stockholder, expected to receive about $4.6 million of the distribution while INNOVATE’s own shareholders will not receive any portion of this dividend directly. The payout underscores the cash-generating capacity of INNOVATE’s infrastructure portfolio company DBM Global and provides additional liquidity at the parent level, which may influence capital allocation decisions and highlights the economic value of INNOVATE’s majority stake for the parent company rather than for its public shareholders in the near term.

The most recent analyst rating on (VATE) stock is a Hold with a $5.00 price target. To see the full list of analyst forecasts on INNOVATE Corp stock, see the VATE Stock Forecast page.

INNOVATE Corp’s MediBeacon System Gains FDA Approval

On December 16, 2025, INNOVATE Corp. announced that MediBeacon’s next generation TGFRTM System received FDA approval. This system, designed for point-of-care kidney function assessment, uses a reusable sensor to measure the clearance rate of a fluorescent agent, offering a cost-effective and patient-friendly solution. The approval positions MediBeacon to capitalize on significant market opportunities in both inpatient and outpatient settings, with initial commercialization planned for early 2026 in select academic medical centers in the United States and China.

The most recent analyst rating on (VATE) stock is a Hold with a $5.00 price target. To see the full list of analyst forecasts on INNOVATE Corp stock, see the VATE Stock Forecast page.

INNOVATE Corp Reports Strong Q3 2025 Results

INNOVATE Corp announced its third-quarter 2025 results, highlighting significant achievements across its business segments. DBM Global reported strong revenue growth and an increased backlog, while MediBeacon received regulatory approval to sell its Transdermal GFR System in China, expanding its market reach. The Spectrum segment is showing signs of recovery in advertising sales and is exploring new datacasting opportunities. The company also completed refinancing transactions to extend debt maturities and initiated strategic processes to comply with milestone covenants, impacting its operations and strategic positioning.

The most recent analyst rating on (VATE) stock is a Hold with a $5.00 price target. To see the full list of analyst forecasts on INNOVATE Corp stock, see the VATE Stock Forecast page.