Waton Financial Limited (WTF) AI Stock Analysis

• Market Cap: $159.64M
• Dividend Yield: N/A
• Average Volume (3M): 124.39K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.13
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: US
• Employees: 31
• Sector: Financial
• Sector Strength: 70
• Industry: Asset Management
• EPS (TTM): N/A
• Shares Outstanding: 47,581,223
• 10 Day Avg. Volume: 22,117
• 30 Day Avg. Volume: 124,385
• PEG Ratio: 0.00
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 0.99
• Enterprise Value/Revenue: 273.67
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: -133.90
• 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: 46 Neutral
• Price Target: $3.50 ▲(13.27% Upside)

The score is held down primarily by a sharp deterioration in financial performance, including a swing to a sizable net loss and uneven cash generation, despite a comparatively low-leverage balance sheet. Technicals show only modest near-term stabilization while the longer-term trend remains weak, and valuation support is limited given the negative P/E and lack of dividend yield.

Positive Factors

Conservative balance sheet

Low leverage provides durable solvency and financial flexibility over the next several months. With limited debt obligations the firm can absorb operational setbacks, fund compliance and growth initiatives from equity or cash reserves, and avoid immediate refinancing risk.

Improved liquidity from Nasdaq listing

A materially larger cash buffer from the Nasdaq listing strengthens the company’s runway and ability to fund regulatory, compliance and growth-related investments over 2–6 months. This reduces short-term solvency risk and supports scaling initiatives despite current losses.

Scalable brokerage and interest income

Significant top-line growth driven by brokerage and margin interest shows the firm can scale core revenue streams when market activity rises. If market share gains persist, this capability supports sustainable revenue expansion independent of one-off items over the medium term.

Negative Factors

Sharp earnings deterioration

A swing to a large net loss and deeply negative margins signals a structural hit to earnings quality and operating leverage. Persistently negative profitability undermines retained earnings, weakens return metrics and constrains funding for strategic priorities over coming months.

Volatile cash generation

Wide swings in operating and free cash flow reduce predictability of internal funding and limit capacity to invest or service commitments. Weak cash-to-earnings conversion in 2025 implies ongoing cash fragility that can impair strategic execution over a multi-month horizon.

Elevated compensation and listing costs

Large share-based compensation and higher compliance/listing expenses materially widen operating losses. As a public company these cost baselines can persist or grow, pressuring margins and potentially diluting shareholders, constraining reinvestment prospects for months ahead.

Waton Financial Limited Business Overview & Revenue Model

Company Description

Waton Financial Limited provides securities brokerage and financial technology services. The company offers securities brokerage services for securities listed on the Hong Kong Stock Exchange, including shares under the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect, the New York Stock Exchange, and the Nasdaq Stock Market; margin financing services; and other ancillary services through electronic trading platform to its corporate and individual brokerage customers, as well as bond distribution services. It also provides software licensing and related support services, including the licensing of trading platform APP, upgrades and enhancements, maintenance, and other related services to financial institutions; and integrated and customizable software solutions to develop trading platform APP that cover the front-, middle-, and back-office operations of securities brokerage business, such as electronic trade order placing, customer relationship management and operational data management, and securities order clearing and settlement services that enables the securities broker customers to digitalize and streamline their business operations, and interact with the financial market. The company was formerly known as IAM Group Inc. and changed its name to Waton Financial Limited in July 2023. Waton Financial Limited was founded in 1989 and is based in Kowloon City, Hong Kong. Waton Financial Limited is a subsidiary of Waton Corporation Limited.

How the Company Makes Money

Waton Financial Limited Financial Statement Overview

Summary

Income statement weakness dominates: revenue declined in 2025 and the company swung from profits (2023–2024) to a large net loss with sharply negative margins. The balance sheet is a relative strength with low leverage, but returns turned strongly negative in 2025. Cash flow has been volatile, with only modestly positive operating/free cash flow in 2025 and weak cash-earnings conversion.

Income Statement

Revenue rose meaningfully from 2022 to 2024, but the top line fell in 2025 (annual), and profitability deteriorated sharply: the company swung from solid profits in 2023–2024 to a large net loss in 2025. Margins compressed significantly versus prior years, moving from healthy positive operating and net margins to deeply negative levels, indicating a material setback in earnings quality and operating leverage.

Balance Sheet

Leverage looks conservative in 2025 (annual) with low debt relative to equity, and equity remains sizeable versus the company’s debt load. That said, returns to shareholders turned strongly negative in 2025 following positive returns in 2023–2024, suggesting the balance sheet strength is being pressured by the latest year’s loss (even if solvency risk appears limited at current debt levels).

Cash Flow

Cash generation has been volatile: strong positive operating and free cash flow in 2023, followed by negative operating and free cash flow in 2024, and a return to modestly positive operating and free cash flow in 2025 (annual). In 2025, free cash flow was close to the net loss in magnitude, but operating cash flow covered only a small portion of the net loss, pointing to weaker cash earnings conversion and ongoing variability in underlying cash profitability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	577.28K	7.45M	10.06M	5.74M	252.82K
Gross Profit	0.00	3.00M	6.74M	4.35M	191.16K
EBITDA	-1.18M	-10.87M	3.53M	3.91M	-1.63M
Net Income	-1.39M	-11.97M	2.50M	3.08M	-1.50M
Balance Sheet
Total Assets	30.72M	30.72M	32.68M	40.77M	5.79M
Cash, Cash Equivalents and Short-Term Investments	7.72M	7.72M	4.95M	19.09M	1.73M
Total Debt	525.36K	525.36K	2.86M	5.29M	2.41M
Total Liabilities	17.96M	17.96M	21.94M	26.61M	4.98M
Stockholders Equity	12.77M	12.77M	10.74M	14.16M	816.84K
Cash Flow
Free Cash Flow	371.67K	346.22K	-2.11M	11.96M	745.56K
Operating Cash Flow	372.54K	359.96K	-1.85M	11.97M	750.91K
Investing Cash Flow	-860.00	-13.74K	-8.21M	-4.98K	-5.36K
Financing Cash Flow	597.51K	2.76M	-8.30M	12.98M	1.05M

Waton Financial Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
BCG	57 Neutral	$37.85M	63.31	5.87%	―	-37.08%	―
MGLD	50 Neutral	$51.38M	-11.79	-18.96%	―	-10.16%	13.49%
WTF	46 Neutral	$159.64M	-65.05	-102.08%	―	―	―
CWD	45 Neutral	$8.42M	-0.06	-1438.14%	―	-62.09%	-99.89%
BENF	44 Neutral	$64.89M	-0.05	―	―	-33.98%	94.83%
ATON	41 Neutral	$8.43M	>-0.01	―	―	―	―

Waton Financial Limited Corporate Events

Waton Financial Posts Strong Revenue Growth but Wider Losses in First Half of Fiscal 2026

Waton Financial Limited reported unaudited results for the first six months of fiscal 2026, ended September 30, 2025, showing a 106.3% surge in total revenue to $6.10 million, driven mainly by a 223.1% jump in brokerage and commission income and strong growth in margin-related interest income, as trading activity in the Hong Kong market increased. Despite this top-line expansion and a significantly strengthened balance sheet—cash and cash equivalents plus segregated cash more than doubled to $29.88 million, and total assets rose to $68.98 million, largely due to proceeds from its April 2025 Nasdaq listing—the company’s operating loss widened sharply to $7.71 million and net loss to $8.37 million, mainly reflecting higher compensation costs, including $6.10 million in share-based expenses tied to its global equity incentive plan, as well as increased compliance and listing-related professional fees associated with its growth strategy and public company status.