Shearwater (SWG) AI Stock Analysis

• Market Cap: £12.39M
• Dividend Yield: N/A
• Average Volume (3M): 62.94K
• Price to Earnings (P/E): ―
• Beta (1Y): -0.23
• Revenue Growth: -11.19%
• EPS Growth: 63.83%
• Country: UK
• Employees: 90
• Sector: Technology
• Sector Strength: 82
• Industry: Software - Infrastructure
• EPS (TTM): -0.12
• Shares Outstanding: 23,826,380
• 10 Day Avg. Volume: 88,827
• 30 Day Avg. Volume: 62,935
• PEG Ratio: 0.09
• Price to Book (P/B): 0.18
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 3.88
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

• Rating: 54 Neutral
• Price Target: ―

Shearwater's overall stock score reflects a mix of strengths and challenges. The company's stable balance sheet and improving cash flow are positive, but significant profitability issues and negative valuation metrics weigh heavily. Positive corporate events offer some optimism for future growth and stability.

Shearwater Business Overview & Revenue Model

Company Description

Shearwater Group plc provides operational resilience solutions in the United Kingdom, Europe, North America, and internationally. It operates through two segments, Software and Services. The company offers SecurEnvoy, a software that provides identity and access management solutions; and Geolang, a software that delivers data discovery, data extraction, and data loss prevention solutions, services, and technologies to discover, classify, and protect sensitive data and information in the cloud and on premise. It also provides cyber security, network monitoring technologies, and managed security services; business and technology regulatory risk assurance and advisory services; and penetration testing, red teaming, and offensive security consultancy services. The company was formerly known as Aurum Mining Plc and changed its name to Shearwater Group PLC in January 2017. Shearwater Group plc was incorporated in 2004 and is headquartered in London, the United Kingdom.

How the Company Makes Money

Shearwater generates revenue through the provision of its geophysical services, mainly to large oil and gas companies seeking to explore and develop new hydrocarbon resources. The company charges clients for the use of its seismic vessels, equipment, and expertise in acquiring and interpreting seismic data. Shearwater's key revenue streams include contract services for seismic data acquisition and processing projects, as well as long-term partnerships with energy companies that require ongoing geophysical support. Additionally, the company may engage in joint ventures or collaborations with other industry players to enhance its service offerings and expand its market reach.

Shearwater Financial Statement Overview

Summary

Shearwater's financial performance is mixed. The income statement reveals challenges in profitability and revenue stability, with a significant decline in revenue and a negative net profit margin. However, the balance sheet is stable with low leverage, and cash flow shows improvement with positive free cash flow.

Income Statement

Shearwater's income statement shows significant volatility in revenue trends, with a notable decline of 15.1% from 2023 to 2024. The company struggles with profitability, indicated by a negative net profit margin of -9.6% in 2024, despite a slightly improved EBITDA margin of 1.4%. The gross profit margin remains low at 14.7%, suggesting challenges in cost management or pricing strategy.

Balance Sheet

The balance sheet reveals a relatively strong equity position, with an equity ratio of 73.9% in 2024, indicating financial stability. However, the company has a low debt-to-equity ratio of 0.008, which is positive but could indicate under-leverage. Return on equity is negative at -4.7%, reflecting the company's ongoing profitability challenges.

Cash Flow

Cash flow analysis shows improvement, with a positive free cash flow of 1.2 million in 2024, up from negative values in previous years. The operating cash flow to net income ratio is positive at 1.06, indicating better cash generation relative to net income. However, the free cash flow to net income ratio reflects challenges at 0.57, suggesting room for improving cash efficiency.

Breakdown
TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
23.44M	22.64M	26.69M	35.88M	31.77M	33.00M
	Gross Profit
6.20M	6.85M	3.32M	7.41M	6.70M	7.45M
	EBIT
-751.00K	-3.23M	-3.01M	1.05M	194.00K	346.00K
	EBITDA
-534.00K	320.00K	-6.42M	4.46M	3.39M	2.03M
	Net Income Common Stockholders
-2.82M	-2.17M	-8.18M	-292.00K	145.00K	-1.50M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
4.97M	4.97M	3.96M	5.58M	8.05M	3.34M
	Total Assets
62.23M	62.23M	69.70M	78.61M	72.68M	71.49M
	Total Debt
378.00K	378.00K	321.00K	206.00K	1.06M	5.30M
	Net Debt
-4.60M	-4.60M	-3.64M	-5.37M	-6.98M	1.96M
	Total Liabilities
16.25M	16.25M	21.58M	22.40M	16.19M	18.98M
	Stockholders Equity
45.98M	45.98M	48.12M	56.21M	56.49M	52.51M
Cash Flow		Free Cash Flow
2.09M	1.23M	-1.41M	-1.60M	5.84M	3.79M
	Operating Cash Flow
2.13M	2.30M	-74.00K	-456.00K	6.59M	5.22M
	Investing Cash Flow
-1.05M	-1.07M	-1.34M	-1.15M	-737.00K	-1.40M
	Financing Cash Flow
-292.00K	-216.00K	-200.00K	-872.00K	-1.15M	-1.07M

Shearwater Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 52.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:SWG, the sentiment is Positive. The current price of 52 is above the 20-day moving average (MA) of 40.58, above the 50-day MA of 35.37, and above the 200-day MA of 36.09, indicating a bullish trend. The MACD of 4.30 indicates Negative momentum. The RSI at 83.93 is Negative, neither overbought nor oversold. The STOCH value of 86.31 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:SWG.

Shearwater Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CNS	63 Neutral	£80.67M	228.57	2.72%	―	6.95%	―
Sector *	61 Neutral	$11.54B	10.46	-6.94%	2.94%	7.57%	-9.03%
SYS	55 Neutral	£18.32M	―	-26.77%	―	2.89%	-804.62%
SWG	54 Neutral	£12.39M	―	-6.16%	―	-11.19%	63.83%
CLCO	51 Neutral	£1.20M	―		―	―	―
BGO		£69.92M	―	-31.33%	―	―	―
CTAI		£3.95M	―	-70.65%	―	―	―

Shearwater Corporate Events

Shearwater Secures £8.4m Contract Renewal with Major Telco

Shearwater Group plc has announced a significant contract renewal worth approximately £8.4 million with a major telecommunications and media company, extending their partnership for an additional two years. This extension underscores Shearwater’s role as a trusted provider of cybersecurity and monitoring solutions, expected to contribute to substantial growth in revenue and Adjusted EBITDA for FY25, aligning with market expectations and reinforcing its industry standing.

Shearwater CFO Increases Stake in Company Shares

Shearwater Group PLC announced that its Chief Financial Officer, Jonathan Hall, has purchased 13,500 ordinary shares, representing a 0.06% stake in the company. This transaction highlights an internal vote of confidence in Shearwater’s market position and potential growth, possibly impacting investor perception positively.