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Genasys (GNSS)
NASDAQ:GNSS
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Genasys
(NASDAQ:GNSS)
Rating:43Neutral
Price Target:
$1.50
▼( -9.64% Downside)
Positive Factors
Contract Wins
Genasys announced a major contract win to provide an Early Warning System for 37 dams in Puerto Rico, worth ~$75 million in revenue.
Market Demand
There is substantial market demand for Genasys’s products due to high government needs and public safety communications.
Revenue Growth
Q1 revenues increased by 59% year-over-year, driven by strong hardware and software growth.
Negative Factors
Backlog
The backlog is now at $40 million, up significantly from $7 million in Q4 FY23.
Genasys (GNSS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$74.96M
Dividend YieldN/A
Average Volume (3M)91.96K
Price to Earnings (P/E)―
Beta (1Y)1.23
Revenue Growth-20.77%
EPS Growth-2.08%
CountryUS
Employees202
SectorTechnology
Sector Strength77
IndustryHardware, Equipment & Parts
Share Statistics
EPS (TTM)-0.14
Shares Outstanding45,154,503
10 Day Avg. Volume157,450
30 Day Avg. Volume91,959
Financial Highlights & Ratios
PEG Ratio-0.08
Price to Book (P/B)9.44
Price to Sales (P/S)0.00
P/FCF Ratio-6.06
Enterprise Value/Market Cap1.16
Enterprise Value/Revenue0.82
Enterprise Value/Gross Profit7.08
Enterprise Value/Ebitda-1.03
Forecast
1Y Price Target
$4.25Price Target Upside156.02% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Genasys Business Overview & Revenue Model
Company DescriptionGenasys Inc. (GNSS) is a global provider of critical communications systems and solutions. The company operates primarily in the safety and security sectors, offering advanced technologies designed to enhance the capabilities of emergency services, public safety, and other critical infrastructure. Genasys's core products include mass notification systems, public safety communications, and critical event management solutions that are utilized by governments, businesses, and organizations worldwide.
How the Company Makes MoneyGenasys Inc. generates revenue through the sale and implementation of its communication systems and software solutions. The company's key revenue streams include product sales, which encompass hardware and software, and recurring revenues from maintenance, updates, and support services. Genasys also earns through long-term contracts with governmental agencies and private sector clients, leveraging its expertise in delivering tailored communications solutions. Significant partnerships with technology providers and integrators enhance the company's market reach and capability to meet diverse client needs, contributing to its financial performance.
Genasys Financial Statement Overview
Summary
Genasys faces significant financial challenges with declining revenue, profitability, and cash flow. The company is struggling with negative margins and increasing leverage, which poses risks to its financial stability. While cash reserves offer some liquidity, the overall financial health is concerning, necessitating strategic changes for recovery.Income Statement
The income statement shows declining revenue and profitability. Revenue decreased from $54.0M in 2022 to $27.8M TTM (Trailing-Twelve-Months), a significant drop. The gross profit margin also declined, and net income has been negative, indicating consistent losses. The company faces challenges in achieving positive EBIT and EBITDA margins, which have been negative, highlighting profitability issues.32
Negative
Balance Sheet
The balance sheet reveals a weakening financial position. The debt-to-equity ratio has increased, indicating higher leverage. Stockholders' equity has reduced from $50.4M in 2022 to $8.1M TTM, reflecting diminishing equity strength. The equity ratio has decreased, signifying a higher reliance on debt. However, cash reserves remain relatively stable, providing some liquidity.45
Neutral
Cash Flow
The cash flow statement highlights negative operating and free cash flows, indicating cash burn. Free cash flow worsened from $87K in 2022 to -$12.6M TTM. The operating cash flow to net income ratio is negative, aligning with the company's losses. Despite some financing inflows, cash flow generation remains a concern.38
Negative
| Breakdown | |||||
| TTM | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 27.78M | 24.01M | 46.66M | 54.03M | 47.00M | 43.01M | Gross Profit |
| 12.32M | 10.19M | 21.76M | 26.34M | 23.43M | 22.64M | EBIT |
| -24.69M | -26.72M | -10.99M | 7.49M | -1.21M | 4.64M | EBITDA |
| -21.88M | -22.99M | -7.66M | 933.00K | 3.38M | 7.44M | Net Income Common Stockholders |
| -28.29M | -31.73M | -18.40M | -16.21M | 704.00K | 11.87M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 16.80M | 12.89M | 10.15M | 19.13M | 18.85M | 27.58M | Total Assets |
| 40.89M | 53.94M | 49.91M | 71.85M | 90.13M | 71.37M | Total Debt |
| 1.17M | 16.30M | 5.29M | 6.14M | 6.90M | 7.48M | Net Debt |
| -11.57M | 11.36M | -3.37M | -6.60M | -6.26M | -15.84M | Total Liabilities |
| 6.47M | 36.37M | 16.09M | 21.46M | 24.17M | 22.23M | Stockholders Equity |
| 34.42M | 17.56M | 33.81M | 50.39M | 65.96M | 49.14M |
| Cash Flow | Free Cash Flow | ||||
| -12.60M | -19.64M | -9.83M | 87.00K | 5.94M | 6.78M | Operating Cash Flow |
| -12.33M | -19.45M | -9.59M | 468.00K | 6.15M | 6.92M | Investing Cash Flow |
| 1.14M | -8.67M | 5.54M | -89.00K | -15.55M | -3.13M | Financing Cash Flow |
| 13.68M | 23.87M | -114.00K | -1.06M | 13.00K | 679.00K |
Genasys Technical Analysis
Negative
1.66
Price Trends
2.08
Negative
2.47
Negative
2.92
Negative
Market Momentum
-0.13
Positive
36.46
Neutral
16.27
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GNSS, the sentiment is Negative. The current price of 1.66 is below the 20-day moving average (MA) of 1.90, below the 50-day MA of 2.08, and below the 200-day MA of 2.92, indicating a bearish trend. The MACD of -0.13 indicates Positive momentum. The RSI at 36.46 is Neutral, neither overbought nor oversold. The STOCH value of 16.27 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GNSS.
Genasys Risk Analysis
Genasys disclosed 40 risk factors in its most recent earnings report. Genasys 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
Genasys Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
61 Neutral | $11.29B | 10.07 | -7.05% | 2.96% | 7.47% | -10.75% | |
48 Neutral | $101.67M | ― | -24.86% | ― | 2.59% | -48.02% | |
43 Neutral | $74.96M | ― | -131.75% | ― | -20.77% | -2.08% | |
43 Neutral | $71.31M | ― | -166.89% | ― | -44.97% | 75.63% | |
43 Neutral | $87.25M | ― | -50.56% | ― | 100.27% | -7.06% |
* Technology Sector Average
Performance Comparison
GNSS
Genasys
1.66
-0.10
-5.68%
LPTH
Lightpath Technologies
2.37
1.07
82.31%
WRAP
Wrap Technologies
1.44
-0.06
-4.00%
ODYS
Odysightai
5.35
-1.15
-17.69%
Genasys Earnings Call Summary
Earnings Call Date:May 13, 2025
(Q2-2025)
| % Change Since: -5.68%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture. While there are promising growth prospects with a record backlog and pipeline, significant challenges include project payment delays, gross margin compression, and cash flow concerns. The overall sentiment is cautiously optimistic but tempered by current hurdles.Q2-2025 Updates
Positive Updates
Record Quarterly Revenue Expected in Q4
Due to the Puerto Rico project, Genasys anticipates record quarterly revenue in the fourth quarter of fiscal 2025, signifying substantial growth and acceleration in the hardware business.
Significant Pipeline Growth
The pipeline measurement for Genasys Protect has increased by more than 100% since the beginning of fiscal 2025, indicating a strong potential for future growth.
Improved 12-Month Backlog
Genasys' 12-month backlog has grown to $50 million, including ARR of $8.6 million, highlighting strong demand and future revenue visibility.
Genasys Protect Platform Success
The Genasys Protect platform significantly reduced evacuation alert times from 40-60 minutes to 6 minutes during the LA fires, showcasing its effectiveness in emergency situations.
CROWS AHD Program Potential
Genasys is optimistic about receiving an initial production order under the CROWS AHD program, which is expected to span multiple years and serve as a stable revenue source for the LRAD business.
Negative Updates
Puerto Rico Project Payment Delays
Despite assurances, Genasys has not yet received the down payment for the third group of dams in Puerto Rico, which prompted the company to secure a $4 million bridge loan.
Gross Margin Impact from Puerto Rico Project
Due to the nature of revenue recognition for the Puerto Rico project, initial shipments are recorded at cost, compressing gross margins before installation milestones are achieved.
Delays in Securing Federal Grant Dependent Deals
Opportunities dependent on federal grant money, especially at the state level, have experienced delays due to uncertainties and freezes in federal fund disbursements.
Decline in Software Revenue
Total software revenue for the quarter was down 3% sequentially due to some customers choosing not to renew their agreements.
Cash Flow Concerns
Cash, cash equivalents, and marketable securities decreased significantly from $13.9 million to $7.2 million, highlighting cash flow challenges.
Company Guidance
During the Genasys fiscal second quarter 2025 results conference call, the company provided several key metrics and insights into its current operations and future outlook. The company reported a 21% year-over-year growth in revenue, although sequential revenues remained flat. Hardware revenues increased 17% year-over-year, while software revenues grew 29% compared to the previous year but experienced a slight sequential decline of 3%. The gross profit margin stood at 37.7%, slightly down from the previous quarter due to a mix of lower-margin hardware revenue and increased network and messaging costs. Operating expenses were reported at $8.9 million, resulting in a GAAP operating loss of $6.3 million, an improvement from the previous year's loss. Adjusted EBITDA was negative $5.1 million, showing a slight improvement compared to the previous year. The company also highlighted its 12-month backlog, which has grown to $50 million, including an annual recurring revenue (ARR) of $8.6 million. Additionally, Genasys discussed the strategic measures taken, such as a $4 million bridge loan, to maintain momentum and capture growth opportunities, particularly in its Puerto Rico project and CROWS AHD program. The company anticipates substantial growth and improved profitability in the fiscal fourth quarter of 2025, driven by significant bookings and an expanding pipeline.Genasys Corporate Events
Executive/Board ChangesPrivate Placements and FinancingFinancial Disclosures
Genasys Reports Q2 2025 Revenue Growth and CFO Retirement
Positive
May 13, 2025
On May 13, 2025, Genasys Inc. announced the upcoming retirement of its Chief Financial Officer, Dennis D. Klahn, during the fiscal fourth quarter of 2025, with a search for his successor underway. The company also reported its fiscal second quarter 2025 financial results, highlighting a 21% increase in revenue to $6.9 million compared to the previous year. Genasys is progressing with the Puerto Rico Early Warning System project and anticipates significant revenue growth in the second half of fiscal 2025, despite challenges such as delayed deposits and federal funding uncertainties. The company secured $4 million in bridge financing to maintain project momentum and is negotiating substantial contracts expected to support future business prospects.
The most recent analyst rating on (GNSS) stock is a Buy with a $4.50 price target. To see the full list of analyst forecasts on Genasys stock, see the GNSS Stock Forecast page.
Shareholder MeetingsBusiness Operations and Strategy
Genasys Approves 2025 Equity Incentive Plan
Neutral
Mar 19, 2025
On January 27, 2025, Genasys Inc. approved its 2025 Equity Incentive Plan, which was later ratified by stockholders on March 17, 2025. This plan allows for various stock and cash-based awards to employees, consultants, and directors, with a total of 6,000,000 shares available for issuance. The plan aims to align the interests of participants with those of stockholders and includes provisions for stock options, restricted stock, and other awards. Additionally, the company held its Annual Meeting of Stockholders on March 17, 2025, where seven directors were elected, and the appointment of Baker Tilly US, LLP as the independent registered public accounting firm was ratified.
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.