Spectra Systems (SPSY) AI Stock Analysis

• Market Cap: £80.85M
• Dividend Yield: 5.23%
• Average Volume (3M): 144.57K
• Price to Earnings (P/E): 12.1
• Beta (1Y): 0.41
• Revenue Growth: 135.43%
• EPS Growth: 28.57%
• Country: UK
• Employees: 28
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.16
• Shares Outstanding: 48,228,973
• 10 Day Avg. Volume: 318,441
• 30 Day Avg. Volume: 144,566
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: £238.00
• Price Target Upside: 44.24% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 0

• Rating: 70 Outperform
• Price Target: 238.00p ▲(44.24% Upside)

Spectra Systems' strong financial performance is the primary driver of its overall stock score. However, technical indicators and governance concerns from a stalled AGM introduce caution. Valuation is fair, and recent strategic appointments and partnerships are positive, but their impact is limited by technical and governance issues.

Spectra Systems Business Overview & Revenue Model

Company Description

Spectra Systems Corporation invents, develops, and sells integrated optical systems in Rhode Island and internationally. It operates through three segments: Authentication Systems, Secure Transactions, and Banknote Cleaning. The company offers integrated solutions, including a system of taggant materials and sensor technology to authenticate banknotes that are used by central banks, as well as G7 country for passport security; banknote cleaning and disinfection systems that lifts sebum and other substances from the banknote through a dry process based on supercritical CO2 cleaning; and solutions to authenticate brand name products. It also provides optical materials for security and quality control, such as fluorescent and phosphorescent pigments and dyes, invisible pigments and dyes, and gasochromic response materials; customized materials and hardware solutions; and internal control systems used to verify the accuracy of transactions logged by providers of lottery and gaming operators. In addition, the company offers software and hardware systems comprising high-speed currency authentication sensors; quality control equipment for use in paper and polymer banknote manufacturing and printing; and security printers and hologram makers. The company was formerly known as Spectra Science Corporation and changed its name to Spectra Systems Corporation in June 2001. Spectra Systems Corporation was incorporated in 1996 and is headquartered in Providence, Rhode Island.

How the Company Makes Money

Spectra Systems generates revenue through several key streams, primarily by selling its proprietary technology and systems to central banks, government mints, and private enterprises involved in currency production and processing. The company's revenue model includes direct sales of hardware and software solutions, maintenance contracts, and licensing agreements for its patented technologies. Additionally, SPSY benefits from strategic partnerships with major players in the financial and security sectors, which help expand its market reach and enhance its product offerings. The ongoing demand for secure payment solutions and anti-counterfeiting measures in a digital economy further contributes to the company's earnings.

Spectra Systems Financial Statement Overview

Summary

Spectra Systems shows strong financial health with robust revenue and profit growth, effective cost management, and strong cash flow generation. The balance sheet is stable with prudent leverage, though an increase in liabilities requires monitoring.

Income Statement

Spectra Systems exhibits strong revenue growth with a 142.53% increase from 2023 to 2024, showcasing impressive expansion. Gross profit margins have remained robust, indicating effective cost management. Net profit margin has also improved, reflecting enhanced profitability. The company maintains strong EBIT and EBITDA margins, indicating operational efficiency and profitability.

Balance Sheet

The company's balance sheet reveals a solid equity position with a consistent equity ratio. Debt-to-equity ratio remains low, indicating prudent leverage management. Return on equity is healthy, pointing to effective capital use. However, the increase in total liabilities warrants monitoring, although it has not significantly impacted equity.

Cash Flow

Spectra Systems demonstrates strong cash flow generation with growing operating cash flow and free cash flow. The free cash flow growth rate is substantial, underlining effective cash management. The operating cash flow to net income ratio is favorable, indicating robust cash conversion. The company maintains a strong free cash flow to net income ratio, ensuring financial flexibility.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	49.19M	20.29M	19.63M	16.59M	14.68M
Gross Profit	23.49M	13.62M	12.28M	10.52M	10.07M
EBITDA	14.70M	8.21M	7.91M	6.74M	6.30M
Net Income	8.52M	6.05M	6.15M	5.16M	5.12M
Balance Sheet
Total Assets	60.97M	60.10M	38.02M	33.15M	32.90M
Cash, Cash Equivalents and Short-Term Investments	13.35M	13.25M	17.50M	16.77M	14.04M
Total Debt	10.58M	12.53M	1.27M	1.02M	1.23M
Total Liabilities	24.65M	27.98M	9.70M	5.23M	4.68M
Stockholders Equity	35.77M	31.54M	27.73M	27.28M	27.48M
Cash Flow
Free Cash Flow	8.46M	7.04M	6.58M	7.54M	4.66M
Operating Cash Flow	9.90M	7.52M	8.04M	8.08M	5.57M
Investing Cash Flow	-2.98M	-6.67M	-1.46M	88.00K	-670.00K
Financing Cash Flow	-6.86M	-5.10M	-5.80M	-5.43M	-5.10M

Spectra Systems Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 165.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:SPSY, the sentiment is Negative. The current price of 165 is below the 20-day moving average (MA) of 184.68, below the 50-day MA of 197.67, and below the 200-day MA of 207.79, indicating a bearish trend. The MACD of -10.00 indicates Positive momentum. The RSI at 29.54 is Positive, neither overbought nor oversold. The STOCH value of 30.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:SPSY.

Spectra Systems Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AOM	75 Outperform	£126.70M	114.52	11.82%	―	13.76%	31.36%
SPSY	70 Outperform	£80.85M	12.11	25.08%	5.23%	135.43%	28.57%
CLBS	68 Neutral	£67.59M	13.50	16.09%	1.91%	-7.07%	24.73%
IGP	68 Neutral	£104.09M	25.32	26.84%	―	-11.27%	-32.98%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
OMG	54 Neutral	£46.22M	99.66	-0.90%	8.13%	-18.13%	-151.19%
RM	46 Neutral	£75.68M	―	-3.40%	―	-14.23%	97.27%

Spectra Systems Corporate Events

Spectra Systems Announces Employee Stock Option Exercise

Spectra Systems Corporation announced the exercise of stock options by an employee, resulting in the issuance of 11,987 shares of common stock. These shares are restricted securities under the US Securities Act of 1933 and will be admitted to trading on AIM, impacting the company’s issued share capital and shareholder calculations under the FCA’s Disclosure and Transparency Rules.

Spectra Systems AGM Stalled by Lack of Quorum

Spectra Systems Corporation announced that its 2025 Annual General Meeting could not proceed due to a lack of quorum, as only 42% of the shares were voted. This situation may impact the company’s governance processes and could raise concerns among stakeholders about shareholder engagement and participation.

Spectra Systems’ Substrate Powers Brazil’s New High-Security Banknote

Spectra Systems Corporation announced that its sustainably sourced FusionTM substrate is a key component of a new high-security polymer banknote produced by Casa Da Moeda Do Brazil. This banknote, unveiled at the High Security Printing event in Rio de Janeiro, features the highest security measures to date, including Spectra’s machine-readable covert substrate and Oberthur Fiduciaire’s Kryptonome security feature. The collaboration with industry leaders such as Oberthur Fiduciaire, SICPA, and Koenig & Bauer highlights Spectra’s significant role in advancing banknote security technology.

Spectra Systems Announces 2025 AGM Details

Spectra Systems Corporation has announced the notice of its Annual General Meeting (AGM), scheduled for 24 June 2025, in Providence, Rhode Island. This meeting is a significant event for stakeholders, as it provides an opportunity for shareholders to engage with the company’s leadership and discuss future strategies.