WISeKey International Holding (WKEY) AI Stock Analysis

• Market Cap: $34.70M
• Dividend Yield: N/A
• Average Volume (3M): 162.49K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.36
• Revenue Growth: -26.47%
• EPS Growth: -5.60%
• Country: US
• Employees: 102
• Sector: Technology
• Sector Strength: 40
• Industry: Semiconductors
• EPS (TTM): -7.50
• Shares Outstanding: 2,040,273
• 10 Day Avg. Volume: 83,453
• 30 Day Avg. Volume: 162,491
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.45
• Price to Cash Flow (P/CF): N/A
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $10.00
• Price Target Upside: 194.99% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

WISeKey's overall stock score is impacted by ongoing financial difficulties, including profitability and cash flow challenges, which are significant concerns. Technical analysis provides some optimism with positive momentum indicators. Valuation remains a weakness due to negative earnings, while the earnings call indicates strategic positioning for future growth despite current setbacks. The absence of impactful corporate events outside the earnings call leaves the focus on internal transformations and market conditions.

Positive Factors

Market Expansion

WeCanGroup announced an integration with SEALCOIN to secure device-to-device transactions, indicating potential for market expansion.

Revenue Growth

WISeKey reported full-year 2023 revenue of $30.1M, up 30% year over year from $23.8M, on continued growth of its SEALSQ semiconductor business addressing the internet of things (IoT).

Security Technology

The next-generation LAES chip supports post-quantum encryption algorithms, addressing security concerns as quantum computing advances.

Negative Factors

Market Dynamics

SEALSQ Corp. (LAES) issued in-line revenue, a steep decline from 2023 due to market dynamics.

Revenue Decline

WISeKey reported 1H24 revenue of $5.2M, down 66% year over year from $15.1M, which was significantly below expectations.

Sales Forecast

Revenue could slow in 2024 to the $19-20M level, forming the base of the forecast.

WISeKey International Holding Business Overview & Revenue Model

Company Description

WISeKey International Holding (WKEY) is a leading global cybersecurity company, specializing in the development of secure technologies for identity management, authentication, and data protection. The company operates across various sectors including Internet of Things (IoT), blockchain, and artificial intelligence, providing solutions that ensure the integrity and authenticity of online transactions and communications. WISeKey's core products and services include digital identity solutions, IoT security, and secure cloud services, aimed at enhancing security and trust in the digital world.

How the Company Makes Money

WISeKey International Holding generates revenue through a diversified business model that includes licensing its advanced cybersecurity technologies and selling proprietary hardware and software solutions. Key revenue streams include the sale of digital identity and IoT security products, which are utilized by enterprises to safeguard their digital assets and data. Additionally, the company earns income from offering consulting services, assisting businesses with the integration and deployment of their cybersecurity frameworks. WISeKey has established significant partnerships with technology vendors and governmental entities, which contribute to its earnings by expanding its market reach and facilitating the adoption of its security solutions. The company also monetizes its blockchain platform by enabling secure transactions and data exchanges, further boosting its revenue potential.

WISeKey International Holding Financial Statement Overview

Summary

WISeKey International Holding faces ongoing financial challenges despite revenue growth. The company struggles with profitability and cash generation, evident in negative margins and cash flow metrics. While leverage is moderate, the low return on equity and consistent losses highlight significant hurdles in achieving financial stability and growth.

Income Statement

WISeKey International Holding showed some positive developments in terms of revenue growth; however, profitability remains a significant concern. The company reported a 33.3% increase in total revenue from 2022 to 2023, but it continues to operate at a loss, with a negative net profit margin of -49.7% in 2023. Additionally, the company has a negative EBIT margin of -43.0%, indicating operational inefficiencies.

Balance Sheet

The balance sheet reflects a mixed financial position. WISeKey has a debt-to-equity ratio of 0.37, suggesting moderate leverage, but the return on equity is negative at -57.6%, highlighting challenges in generating shareholder value. The equity ratio stands at 55.8%, indicating a reasonable amount of equity financing relative to total assets.

Cash Flow

Cash flow metrics reveal ongoing difficulties. Although there was a slight improvement in operating cash flow, it remains negative at -$14.2 million. The free cash flow also saw marginal improvement but remains negative at -$17.2 million. The operating cash flow to net income ratio is negative, indicating struggles in converting income to cash. The free cash flow to net income ratio also remains undesirable.

Breakdown
TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Income Statement		Total Revenue
20.83M	30.92M	23.20M	22.26M	14.78M	22.65M
	Gross Profit
12.58M	14.74M	9.80M	9.09M	5.46M	9.46M
	EBIT
-17.84M	-13.30M	2.58M	-26.69M	-18.53M	-20.50M
	EBITDA
-20.88M	-13.27M	-12.04M	-20.40M	-27.67M	-20.46M
	Net Income Common Stockholders
-27.57M	-15.36M	5.77M	-24.09M	-28.91M	-23.03M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
261.75K	15.32M	4.06M	34.25M	28.84M	12.12M
	Total Assets
832.13K	47.80M	21.66M	88.81M	52.88M	49.90M
	Total Debt
0.00	9.77M	14.12M	22.06M	16.97M	11.27M
	Net Debt
-261.75K	-5.54M	10.06M	-12.19M	-2.68M	-852.00K
	Total Liabilities
9.05M	26.72M	21.45M	47.43M	38.45M	29.46M
	Stockholders Equity
-8.11M	26.68M	212.00K	35.90M	16.27M	22.02M
Cash Flow		Free Cash Flow
-15.56M	-17.23M	-17.45M	-21.83M	-12.60M	-14.18M
	Operating Cash Flow
-14.11M	-14.21M	-17.14M	-21.79M	-12.55M	-13.89M
	Investing Cash Flow
-699.14K	-3.02M	-484.00K	-2.52M	-3.90M	36.63M
	Financing Cash Flow
27.48M	11.85M	4.18M	36.98M	21.48M	-17.28M

WISeKey International Holding Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 3.39
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WKEY, the sentiment is Negative. The current price of 3.39 is below the 20-day moving average (MA) of 4.34, below the 50-day MA of 5.33, and below the 200-day MA of 3.87, indicating a bearish trend. The MACD of -0.40 indicates Negative momentum. The RSI at 37.85 is Neutral, neither overbought nor oversold. The STOCH value of 14.33 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WKEY.

WISeKey International Holding Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PANW	78 Outperform	$101.68B	86.76	23.38%	―	13.86%	-46.44%
FTNT	70 Outperform	$65.14B	37.48	338.74%	―	12.27%	54.69%
OKTA	69 Neutral	$15.96B	1,568.77	0.46%	―	15.33%	―
CYBR	67 Neutral	$15.16B	1,777.39	-5.91%	―	33.10%	-20.31%
Sector *	57 Neutral	$18.54B	9.84	-14.38%	2.71%	5.07%	-23.65%
VRNS	56 Neutral	$4.32B	―	-20.26%	―	10.38%	6.88%
WKEY	51 Neutral	$34.70M	―	-58.52%	―	-26.47%	-5.60%