WISeKey International Holding (WKEY) AI Stock Analysis

• Market Cap: $70.70M
• Dividend Yield: N/A
• Average Volume (3M): 247.32K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.71
• Revenue Growth: -61.52%
• EPS Growth: 35.64%
• Country: US
• Employees: 109
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): -1.95
• Shares Outstanding: 2,040,273
• 10 Day Avg. Volume: 277,866
• 30 Day Avg. Volume: 247,322
• PEG Ratio: -0.05
• Price to Book (P/B): 151.03
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -1.84
• Enterprise Value/Market Cap: 0.60
• Enterprise Value/Revenue: 0.46
• Enterprise Value/Gross Profit: 9.82
• Enterprise Value/Ebitda: -0.59
• 1Y Price Target: $7.00
• Price Target Upside: 8.53% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 51 Neutral
• Price Target: $7.00 ▲(8.53%Upside)

WISeKey's overall stock score reflects substantial financial challenges and a negative valuation. While technical indicators suggest some positive momentum, and the long-term guidance is optimistic, the immediate financial performance is weak, driving a lower overall score.

Positive Factors

Financial Stability

WKEY has sufficient capital to fund operations at least through 2027, providing financial stability.

Growth Initiatives

WISeKey is advancing many initiatives forward, including building ASIC vertical integration into its SEALSQ Corp. subsidiary via acquisition, delivering quantum-ready semis late this year, growing its 17 satellite constellation to 88 over the next three years, building its crypto software stack to support machine-to-machine transactions over its satellite network, among a host of other objectives.

Market Potential

WISeKey sees the need for higher levels of cryptographic protection creating a market that could translate to $500M annually.

Negative Factors

Earnings Impact

An adjusted EBITDA loss of $13.2M widened from $6.7M in 2H23 on the lower revenue.

Revenue Decline

2024 revenue declined 57.6% year-over-year, reflecting reduced demand at LAES due to normalization of semiconductor supply chains and declining interest in legacy products.

Revenue Forecast

Full-year's $11.9M was down more than 60% from 2023's $30.9M, and the outlook for 2025 could be flattish-to-slightly up at best.

WISeKey International Holding Business Overview & Revenue Model

Company Description

WISeKey International Holding AG, a cybersecurity company, provides integrated security solutions for the internet of things (IoT) and digital identity ecosystems in Switzerland, rest of Europe, the Middle East, Africa, North America, the Asia Pacific, and Latin America. The company operates through three segments: IoT, Artificial Intelligence (AI), and Managed Public Key Infrastructure (mPKI). It offers microcontrollers that provides identity to various connected devices; and mPKI, which include digital identity, certificate management and signing solutions, and trust services, as well as offers digital certificates; software as a service, including cloud-based certificate life-cycle-management and signing and authentication solutions; software licenses; post-contract customer support for cybersecurity applications; and infrastructure hosting and monitoring services. The company also develops, markets, hosts, and supports a range of solutions that enable secure digital identification of people, content, and objects by generating digital identities through its products and services in cybersecurity services, IoT, digital brand management, and mobile security, which enable clients to monetize their existing user bases, as well as expand its eco-system. In addition, the company operates ISTANA platform to manage components in an intelligent car by providing digital identities based on PKI technology.; and engages in financing, sales, and distribution activities. Further, it provides AI solutions through knowledge automation. The company was founded in 1999 and is headquartered in Zug, Switzerland.

How the Company Makes Money

WISeKey International Holding makes money primarily through the sale of its cybersecurity products and services. Its revenue streams include licensing fees for digital certificates and identity management solutions, sales of secure hardware products such as microcontrollers, and consulting services for cybersecurity solutions. Additionally, the company leverages strategic partnerships with technology firms to integrate its security solutions into broader platforms, thereby expanding its market reach and enhancing revenue opportunities. These partnerships, along with its focus on emerging technologies like IoT and blockchain, are significant contributors to WISeKey's earnings.

WISeKey International Holding Financial Statement Overview

Summary

WISeKey International Holding faces significant financial challenges with declining revenues, negative profit margins, and weakening equity. The company struggles with profitability and cash flow generation, heavily relying on external financing. Although cash reserves are robust, there is no clear path to revenue recovery or margin improvement.

Income Statement

WISeKey International Holding shows a challenging income statement with declining total revenue from 2023 to 2024 and consistently negative net income. The gross profit margin decreased significantly from 47.7% in 2023 to 36.2% in 2024, indicating lower profitability. The net profit margin is deeply negative, and there is no positive EBIT margin. The company faces revenue contraction, deteriorating margins, and significant operational losses.

Balance Sheet

The balance sheet reflects a mixed picture. While the company maintains a strong cash position with cash and short-term investments exceeding total debt, the total debt-to-equity ratio has increased due to declining equity. Stockholders' equity decreased, suggesting potential financial instability. The equity ratio is moderate but weakened over the years, pointing towards financial leverage increase.

Cash Flow

Cash flows are under pressure with negative operating cash flow and free cash flow in 2024. The free cash flow deteriorated compared to 2023, and both the operating cash flow to net income and free cash flow to net income ratios indicate poor conversion of income to cash. Despite a significant inflow from financing activities, the company struggles with cash generation from its core operations.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	11.88M	30.92M	23.20M	22.26M	14.78M
Gross Profit	4.29M	14.74M	9.80M	9.09M	5.46M
EBITDA	-26.28M	-13.27M	-12.04M	-20.40M	-27.67M
Net Income	-13.45M	-15.36M	5.77M	-24.09M	-28.91M
Balance Sheet
Total Assets	114.69M	47.80M	21.66M	88.81M	52.88M
Cash, Cash Equivalents and Short-Term Investments	90.60M	15.32M	4.06M	34.25M	28.84M
Total Debt	8.94M	9.77M	14.12M	22.06M	16.97M
Total Liabilities	27.56M	26.72M	21.45M	47.43M	38.45M
Stockholders Equity	25.05M	26.68M	212.00K	35.90M	16.27M
Cash Flow
Free Cash Flow	-18.34M	-17.23M	-17.45M	-21.83M	-12.60M
Operating Cash Flow	-17.77M	-14.21M	-17.14M	-21.79M	-12.55M
Investing Cash Flow	179.00K	-3.02M	-484.00K	-2.52M	-3.90M
Financing Cash Flow	92.92M	11.85M	4.18M	36.98M	21.48M

WISeKey International Holding Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 6.45
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WKEY, the sentiment is Positive. The current price of 6.45 is below the 20-day moving average (MA) of 6.60, above the 50-day MA of 5.77, and above the 200-day MA of 4.83, indicating a bullish trend. The MACD of 0.16 indicates Positive momentum. The RSI at 53.93 is Neutral, neither overbought nor oversold. The STOCH value of 71.96 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WKEY.

WISeKey International Holding Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VLN	57 Neutral	$269.58M	―	-24.31%	―	-12.13%	-39.21%
Sector *	57 Neutral	$1.15B	27.20	-27.06%	10.36%	10.83%	-5.57%
SQNS	54 Neutral	$36.81M	―	378.21%	―	39.81%	―
GSIT	53 Neutral	$96.16M	―	-33.15%	―	-5.73%	47.83%
WKEY	51 Neutral	$70.70M	―	-51.84%	―	-61.52%	35.64%
GCTS	48 Neutral	$75.64M	―	17.45%	―	94.76%	-146.39%
PXLW	43 Neutral	$35.78M	―	-2911.20%	―	-47.93%	-37.78%