VerifyMe (VRME) AI Stock Analysis

• Market Cap: $9.12M
• Dividend Yield: N/A
• Average Volume (3M): 116.29K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.66
• Revenue Growth: -4.37%
• EPS Growth: -3.25%
• Country: US
• Employees: 40
• Sector: Industrials
• Sector Strength: 78
• Industry: Security & Protection Services
• EPS (TTM): -0.36
• Shares Outstanding: 12,354,772
• 10 Day Avg. Volume: 66,739
• 30 Day Avg. Volume: 116,293
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.50
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 1.57
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $1.25
• Price Target Upside: 73.61% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

VerifyMe's overall stock score is driven by its financial challenges, including consistent net losses and negative margins, offset slightly by some improvements in cash flow. Technical indicators suggest ongoing bearish momentum, and the valuation remains unattractive due to negative earnings. The mixed outcomes from the earnings call, with some strategic improvements, are not enough to outweigh the broader financial difficulties.

Positive Factors

Customer Growth

The number of new customers in the Precision Logistics segment was up approximately 6% year-over-year.

Debt Management

The company retired most of its debt through a warrant inducement raise, leaving only $0.8 million of convertible notes held by company affiliates and board members.

Financial Performance

Adjusted EPS and adjusted EBITDA exceeded expectations, contributing to the maintained OUTPERFORM rating.

Negative Factors

Business Performance

The company's logistics business performance was weak due to factors such as the loss of the FedEx direct premium business and a soft industry backdrop.

Guidance and Market Conditions

Management chose not to provide financial guidance for FY/25 due to unpredictable market conditions in the logistics space.

Revenue Decline

Q4 results showed a decline in total revenue of around 12.1% compared to the same period the previous year.

VerifyMe Business Overview & Revenue Model

Company Description

VerifyMe, Inc., a technology solutions provider, provides products to connect brands with consumers in the United States. The company offers VerifyMe Engage services that provides the ability for the brand owner to gather business intelligence and engage with the consumer using authentication test as the initial contact with the consumer. It also offers VerifyMe Authenticate services that provide an assortment of tools through its patented products comprising VerifyInk, a patented invisible ink; VerifyAuthenticator technology, a device used with a smartphone and the VerifyMe app to authenticate and decode VerifyInk codes; VerifyLabel, a tamper proof labels; and VerifyChecker, a handheld device that is tuned to authenticate the unique frequency of VerifyInk invisible ink. In addition, the company provides VerifyMe Track & Trace, a supply chain serialization, track and trace technology utilizing overt dynamic codes, such as VerifyCode, which is tied to cloud-based authentication and track and trace system. Further, it offers VerifyMe Online that includes technologies and services that enable customers to tackle counterfeit websites, domains and e-commerce platforms, and social media sites offering or promoting counterfeit products. VerifyMe, Inc. has a strategic partnership with INX International Ink Company. The company was formerly known as LaserLock Technologies, Inc. and changed its name to VerifyMe, Inc. in July 2015. VerifyMe, Inc. was incorporated in 1999 and is headquartered in Rochester, New York.

How the Company Makes Money

VerifyMe makes money through a combination of product sales, service contracts, and licensing agreements. The company generates revenue by selling its patented security inks and pigments that are used in printing secure labels and packaging. Additionally, VerifyMe earns income from subscription-based services for its digital authentication tools and software platforms, which allow businesses to track and verify the authenticity of their products in real-time. Significant partnerships with label and packaging companies enhance its market reach, and its collaboration with technology firms helps integrate its solutions into broader security and supply chain systems, further contributing to its earnings.

VerifyMe Financial Statement Overview

Summary

VerifyMe faces significant financial challenges, including consistent net losses and negative margins. While there has been some improvement in cash flow and debt reduction, the overall financial health is concerning due to fluctuating cash flows and persistent unprofitability.

Income Statement

VerifyMe has shown inconsistent revenue growth over the years, with a significant drop in 2024 compared to 2023. The company has faced persistent negative net and EBIT margins, indicating ongoing profitability challenges. Despite some gross profit, the company’s inability to convert revenue into net income remains a concern.

Balance Sheet

The balance sheet reveals a decreasing trend in stockholders' equity and total assets. The debt-to-equity ratio has improved slightly due to reduced total debt, but the return on equity remains negative due to net losses. The equity ratio suggests a moderately leveraged position, but the consistent net losses could pose future risks.

Cash Flow

VerifyMe exhibits fluctuations in operating cash flow, with a positive free cash flow in recent years. However, the operating cash flow to net income ratio is unfavorable due to persistent net losses. The company’s ability to generate cash from operations remains inconsistent, posing potential liquidity concerns.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
24.21M	25.31M	19.58M	867.00K	343.00K
	Gross Profit
8.66M	9.00M	6.49M	599.00K	281.00K
	EBIT
-4.39M	-2.93M	6.08M	-13.39M	-3.57M
	EBITDA
-863.00K	-1.79M	-13.54M	-4.71M	-3.44M
	Net Income Common Stockholders
-3.82M	-3.39M	-14.49M	12.17M	-7.96M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.82M	3.10M	3.41M	9.42M	7.94M
	Total Assets
16.07M	20.70M	20.75M	21.69M	8.77M
	Total Debt
247.00K	2.95M	2.35M	0.00	72.00K
	Net Debt
-2.58M	-143.00K	-1.06M	-9.42M	-7.87M
	Total Liabilities
5.85M	8.17M	7.17M	521.00K	455.00K
	Stockholders Equity
10.21M	12.53M	13.59M	21.17M	8.32M
Cash Flow		Free Cash Flow
871.00K	209.00K	-2.83M	-3.51M	-2.41M
	Operating Cash Flow
871.00K	244.00K	-2.55M	-3.25M	-2.28M
	Investing Cash Flow
-575.00K	-1.20M	-7.88M	-2.85M	-125.00K
	Financing Cash Flow
-616.00K	634.00K	4.42M	7.59M	10.09M

VerifyMe Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 0.72
• 50DMA: Negative
• 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 VRME, the sentiment is Neutral. The current price of 0.72 is above the 20-day moving average (MA) of 0.66, below the 50-day MA of 0.75, and below the 200-day MA of 1.15, indicating a neutral trend. The MACD of -0.01 indicates Negative momentum. The RSI at 50.86 is Neutral, neither overbought nor oversold. The STOCH value of 67.01 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for VRME.

VerifyMe Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	64 Neutral	$4.28B	11.80	5.30%	250.74%	4.12%	-9.02%
SPCB	56 Neutral	$19.85M	―	9.92%	―	―	―
VRME	47 Neutral	$9.12M	―	-33.62%	―	-4.37%	-3.25%
BKYI	41 Neutral	$4.81M	―	-185.43%	―	-10.64%	79.12%
GFAI	34 Underperform	$20.63M	―	-72.31%	―	-1.43%	85.31%
DGLY	15 Underperform	$2.68M	―	-234.89%	―	-32.26%	39.17%

VerifyMe Corporate Events

VerifyMe Announces Strategic Shift and Business Closure Plans

VerifyMe, Inc. announced plans to close its Trust Codes Global business by the end of November 2024 unless a buyer is found, resulting in a $1.8 million charge in Q3 2024. The company reported a revenue of $5.4 million and a net loss of $2.4 million for Q3 2024, with positive adjusted EBITDA of $0.2 million. CEO Adam Stedham emphasized focusing on Precision Logistics for growth, while discontinuing certain Authentication Segment initiatives, aiming to enhance shareholder value.