Widepoint (WYY) AI Stock Analysis

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Widepoint

(NYSE MKT:WYY)

Rating:48Neutral

Price Target:

$3.50

▲( 15.89% Upside)

Widepoint's overall score reflects significant financial challenges, particularly in profitability and cash flow stability. Technical indicators are neutral, while valuation metrics are unattractive due to negative earnings. The earnings call provides some optimism with strategic initiatives and government contracts, but the overall outlook remains cautious, highlighting the need for operational improvements and profitability.

Positive Factors

Contract Awards and Revenue Growth

The company announced $51.2M of contract awards, which should drive revenue growth in 2025 and beyond.

Partnerships and Customer Base Expansion

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

Accounting Adjustments and Revenue Impact

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

Government Exposure and Uncertainty

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

$29.54M

Dividend YieldN/A

Average Volume (3M)151.40K

Price to Earnings (P/E)―

Beta (1Y)1.46

Revenue Growth24.03%

EPS Growth49.96%

CountryUS

Employees240

SectorTechnology

Sector Strength77

IndustryInformation Technology Services

Share Statistics

EPS (TTM)-0.08

Shares Outstanding9,780,587

10 Day Avg. Volume298,197

30 Day Avg. Volume151,396

Financial Highlights & Ratios

PEG Ratio4.22

Price to Book (P/B)3.11

Price to Sales (P/S)0.00

P/FCF Ratio-321.98

Enterprise Value/Market Cap1.45

Enterprise Value/Revenue0.08

Enterprise Value/Gross Profit2.24

Enterprise Value/Ebitda11.51

Forecast

1Y Price Target

$7.00

Price Target Upside131.79% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering1

Widepoint Business Overview & Revenue Model

Company DescriptionWidePoint Corporation (WYY) is a leading provider of technology-based products and services, specializing in identity management, telecommunications lifecycle management, and cybersecurity solutions. The company primarily serves government entities, healthcare providers, and commercial enterprises, offering a range of services designed to enhance security, operational efficiency, and compliance.

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 Financial Statement Overview

Summary

Widepoint faces several financial challenges. While revenue growth is positive, profitability remains a significant issue. The balance sheet indicates manageable leverage but declining equity, and cash flow challenges persist. The financial trajectory suggests 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.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
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
	EBIT
-2.05M	-1.88M	-3.70M	-1.97M	1.25M	3.22M
	EBITDA
727.19K	1.57M	-302.84K	-15.72M	2.91M	4.85M
	Net Income Common Stockholders
-2.01M	-1.93M	-4.05M	-23.59M	341.10K	10.32M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
6.92M	6.78M	6.92M	7.53M	6.48M	16.00M
	Total Assets
53.80M	71.58M	51.30M	49.01M	75.49M	101.32M
	Total Debt
4.75M	4.94M	4.75M	5.34M	6.82M	6.51M
	Net Debt
-2.17M	-1.84M	-2.17M	-2.19M	339.89K	-9.49M
	Total Liabilities
39.12M	58.00M	36.62M	31.26M	33.81M	60.77M
	Stockholders Equity
14.68M	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

Negative

Last Price3.02

Price Trends

50DMA

3.72

Negative

100DMA

3.81

Negative

200DMA

3.91

Negative

Market Momentum

MACD

-0.08

Positive

RSI

34.79

Neutral

STOCH

3.76

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WYY, the sentiment is Negative. The current price of 3.02 is below the 20-day moving average (MA) of 4.49, below the 50-day MA of 3.72, and below the 200-day MA of 3.91, indicating a bearish trend. The MACD of -0.08 indicates Positive momentum. The RSI at 34.79 is Neutral, neither overbought nor oversold. The STOCH value of 3.76 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
USIO	67 Neutral	$37.78M	11.69	19.38%	―	3.07%	―
DTST	61 Neutral	$26.70M	144.96	0.90%	―	-4.17%	-72.98%
Sector *	61 Neutral	$11.29B	10.07	-7.05%	2.96%	7.47%	-10.75%
WYY	48 Neutral	$29.54M	―	-14.76%	―	24.03%	49.96%
CLPS	47 Neutral	$27.56M	―	-1.97%	―	5.81%	55.03%
TDTH	23 Underperform	$14.70M	―		―	―	―

* Technology Sector Average

Performance Comparison

WYY

Widepoint

3.02

0.40

15.27%

USIO

Usio

1.41

-0.16

-10.19%

CLPS

Clps

0.99

0.12

13.79%

DTST

Data Storage

3.74

-3.45

-47.98%

TDTH

Trident Digital Tech Holdings Ltd Unsponsored ADR

0.25

-3.73

-93.72%

Widepoint Earnings Call Summary

Earnings Call Date:May 15, 2025

(Q1-2025)

% Change Since: -43.02%|

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.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.