Widepoint (WYY) AI Stock Analysis

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Widepoint

(NYSE MKT:WYY)

Rating:49Neutral

Price Target:

$3.50

▲(2.64%Upside)

Widepoint's overall stock score reflects significant financial challenges, including negative profitability and cash flow issues. Technical indicators suggest bearish momentum, and valuation metrics highlight current unprofitability. However, strategic initiatives and positive guidance from the earnings call provide some optimism for future improvement.

Positive Factors

Financial Performance

Revenue of $37.7M represented an increase of $9.4M from the year ago period, or 33.4%, and compared to our $28.9M estimate.

Partnerships

The company continues to see positive traction across multiple products and interest in potential partnerships to leverage shared client networks and expand the customer base.

Negative Factors

Earnings

First quarter revenue was below the estimate, impacted by a one-time out-of-period accounting adjustment.

Government Exposure

With a change in administration and ongoing government headcount reductions, the level of uncertainty for all businesses with meaningful government exposure has increased.

Widepoint (WYY) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$33.35M

Dividend YieldN/A

Average Volume (3M)110.54K

Price to Earnings (P/E)―

Beta (1Y)1.53

Revenue Growth24.03%

EPS Growth49.96%

CountryUS

Employees240

SectorTechnology

Sector Strength87

IndustryInformation Technology Services

Share Statistics

EPS (TTM)-0.08

Shares Outstanding9,780,587

10 Day Avg. Volume84,084

30 Day Avg. Volume110,543

Financial Highlights & Ratios

PEG Ratio<0.01

Price to Book (P/B)0.90

Price to Sales (P/S)0.00

P/FCF Ratio5.98

Enterprise Value/Market Cap0.41

Enterprise Value/Revenue0.03

Enterprise Value/Gross Profit0.72

Enterprise Value/Ebitda3.68

Forecast

1Y Price Target

$7.00

Price Target Upside105.28% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering1

Widepoint Business Overview & Revenue Model

Company DescriptionWidePoint Corporation provides technology management as a service (TMaaS) to the government and business enterprises in North America and Europe. It offers TMaaS solutions through a federal government certified proprietary portal to manage, analyze, and protect communications assets, as well as deploy identity management solutions that provide secured virtual and physical access to restricted environments. The company provides telecom lifecycle management, mobile and identity management, and digital billing and analytics solutions. It also offers information technology as a service, including cybersecurity, cloud, network operation, and professional services. WidePoint Corporation was founded in 1991 and is headquartered in Fairfax, Virginia.

How the Company Makes MoneyWidePoint generates revenue through its diverse service offerings, including managed mobility services, identity and access management, and secure communications solutions. The company earns money by providing subscription-based services and professional consulting, primarily to federal government agencies under multi-year contracts. WidePoint also forms strategic partnerships with technology providers to enhance its service offerings and expand its client base. Key revenue streams include long-term government contracts and recurring service fees from its telecommunications lifecycle management solutions.

Widepoint Earnings Call Summary

Earnings Call Date:May 15, 2025

(Q1-2025)

% Change Since: -35.66%|

Next Earnings Date:Aug 18, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mix of positive and negative aspects. Highlights include achieving FedRAMP authorization and strong revenue growth in carrier services, while lowlights include an accounting adjustment reducing revenues and a reported net loss. Despite challenges, the company shows momentum with new task orders and a positive outlook.

Q1-2025 Updates

Positive Updates

FedRAMP Authorized Status Achieved

WidePoint achieved FedRAMP authorized status for its ITMS solution, significantly increasing visibility and accessibility to federal agencies, expanding the pipeline of opportunities.

New Task Orders Under Spiral 4 Contract

WidePoint was awarded a new task order under the Spiral 4 contract with the Department of Defense, along with two additional task orders. This indicates growing momentum in the Spiral 4 contract.

Strong Carrier Services Revenue

Carrier services revenue increased by $3 million compared to the same period in 2024, driven by growth in the number of lines under management for the DHS customer.

Increase in Managed Services and Billable Services

Managed services fees and billable services fees increased by $564,000 and $591,000 respectively, compared to the same period last year.

Positive Adjusted EBITDA and Free Cash Flow

Adjusted EBITDA was $92,400 and free cash flow was $65,700, marking the 31st consecutive quarter of positive adjusted EBITDA and sixth consecutive quarter of positive free cash flow.

Negative Updates

Out-of-Period Accounting Adjustment

An out-of-period adjustment due to an error in revenue recognition reduced Q1 revenue by $2.7 million and cost of revenue by $2.5 million, with a net impact to gross profit of $233,000.

Net Loss for the Quarter

Recorded a net loss of $724,000, or a loss of $0.08 per share, compared to a net loss of $653,000, or a loss of $0.07 per share, in the same period last year.

Decrease in Reselling and Other Services Revenue

Revenue from reselling and other services decreased by $4.2 million from the same period last year, partially due to the out-of-period adjustment.

Cash Balance Decrease

Ended the quarter with $3.7 million in cash, affected by administrative challenges in invoice processing with a major customer, expected to take a couple of quarters to resolve.

Company Guidance

During WidePoint's first quarter 2025 earnings call, the company provided guidance for the fiscal year, forecasting revenue between $154 million and $163 million. The adjusted EBITDA is expected to range from $2.8 million to $3 million, while free cash flow is projected to be between $2.4 million and $2.6 million. WidePoint aims to achieve positive earnings per share for the year. The call also highlighted the company's strategic initiatives, such as strengthening partnerships, preparing for the DHS CWMS 3.0 recompete, and commercializing new solutions. The company addressed a one-time out-of-period accounting adjustment that reduced first-quarter revenue by $2.7 million, but assured it would not materially affect the full-year results.

Widepoint Financial Statement Overview

Summary

Widepoint faces several financial challenges. Revenue growth is positive, but profitability is a major issue with negative net profit margins. The balance sheet indicates manageable leverage but declining equity, and cash flow challenges persist, suggesting the need for improved operational efficiency and profitability to ensure stability.

Income Statement

Neutral

Widepoint's revenue has shown growth over the years, although it remains below the highs of 2020. The company has consistently struggled with profitability, as indicated by negative EBIT and net income margins in recent periods. The gross profit margin is fairly stable, but overall profitability is a concern with negative net profit margins.

Balance Sheet

Neutral

The balance sheet shows a moderate debt-to-equity ratio, indicating manageable leverage. However, declining stockholders' equity and a decrease in total assets over recent years reflect potential financial instability. The equity ratio is lower than optimum, suggesting limited asset backing by equity.

Cash Flow

Neutral

Widepoint's cash flow situation is challenging, with fluctuations in operating cash flow and negative free cash flow in the most recent TTM period. The operating cash flow to net income ratio is weak, highlighting operational difficulties. However, the company has managed some positive free cash flow growth in previous years.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	142.58M	142.57M	106.03M	94.10M	87.34M	180.34M
Gross Profit	19.12M	19.00M	15.65M	14.58M	16.37M	20.46M
EBITDA	727.19K	1.57M	-302.84K	-15.72M	2.91M	4.85M
Net Income	-2.01M	-1.93M	-4.05M	-23.59M	341.10K	10.32M
Balance Sheet
Total Assets	71.36M	71.58M	51.30M	49.01M	75.49M	101.32M
Cash, Cash Equivalents and Short-Term Investments	3.70M	6.78M	6.92M	7.53M	6.48M	16.00M
Total Debt	5.31M	4.94M	4.75M	5.34M	6.82M	6.51M
Total Liabilities	58.40M	58.00M	36.62M	31.26M	33.81M	60.77M
Stockholders Equity	12.97M	13.58M	14.68M	17.75M	41.68M	40.55M
Cash Flow
Free Cash Flow	-128.23K	1.56M	-464.84K	2.66M	-3.98M	5.23M
Operating Cash Flow	10.85K	1.68M	625.25K	6.07M	-1.22M	6.39M
Investing Cash Flow	-139.08K	141.19K	-620.99K	-3.41M	-7.44M	-1.16M
Financing Cash Flow	-773.56K	-894.84K	-590.15K	-1.47M	-705.70K	3.73M

Widepoint Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price3.41

Price Trends

50DMA

3.78

Negative

100DMA

3.61

Negative

200DMA

3.87

Negative

Market Momentum

MACD

-0.06

Negative

RSI

49.71

Neutral

STOCH

68.22

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WYY, the sentiment is Neutral. The current price of 3.41 is above the 20-day moving average (MA) of 3.30, below the 50-day MA of 3.78, and below the 200-day MA of 3.87, indicating a neutral trend. The MACD of -0.06 indicates Negative momentum. The RSI at 49.71 is Neutral, neither overbought nor oversold. The STOCH value of 68.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for WYY.

Widepoint Risk Analysis

Widepoint disclosed 39 risk factors in its most recent earnings report. Widepoint reported the most risks in the "Finance & Corporate" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Widepoint Peers Comparison

Overall Rating

UnderperformOutperform

Sector (69)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
USIO	72 Outperform	$43.10M	13.33	19.38%	―	3.07%	―
Sector *	69 Neutral	¥228.59B	14.33	7.64%	2.71%	9.13%	8.49%
CYCU	57 Neutral	$11.32M	33.15	-144.50%	―	―	-416.57%
DTST	56 Neutral	$25.56M	138.76	0.90%	―	-4.17%	-72.98%
CLPS	50 Neutral	$25.61M	―	-1.97%	―	5.81%	55.03%
WYY	49 Neutral	$33.35M	―	-14.76%	―	24.03%	49.96%
TDTH	41 Neutral	$19.00M	―		―	―	―

* Technology Sector Average

Performance Comparison

WYY

Widepoint

3.41

-0.75

-18.03%

USIO

Usio

1.62

0.13

8.72%

CLPS

Clps

0.92

0.12

15.00%

DTST

Data Storage

3.58

-2.95

-45.18%

CYCU

Cycurion

0.36

-10.67

-96.74%

TDTH

Trident Digital Tech Holdings Ltd Unsponsored ADR

0.27

-3.71

-93.22%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 03, 2025