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Kustom Entertainment
(NASDAQ:KUST)
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Rating:44Neutral
Price Target:
$1.00
▲(21.95% Upside)
Action:Reiterated
Date:08/17/26
The score is held down primarily by weak financial performance (shrinking revenue, very large losses, and ongoing cash burn) and a pronounced technical downtrend. Valuation provides limited support due to negative earnings, while recent divestiture-related corporate events are a modest positive offset due to improved strategic focus and potential liquidity benefits.
Positive Factors
Strategic Focus
Exiting non-core video operations can simplify the business, reduce management distraction and concentrate resources on live events and ticketing, where the company sees greater strategic potential. The benefit depends on successful execution of the focused model.
Negative Factors
Revenue Contraction
Sustained revenue deterioration limits operating leverage and makes it harder to absorb fixed costs. The latest period also shows negative gross profit, indicating that the company lacks a stable revenue base from which a durable recovery in margins can develop.
Read all positive and negative factors
Positive Factors
Negative Factors
Strategic Focus
Exiting non-core video operations can simplify the business, reduce management distraction and concentrate resources on live events and ticketing, where the company sees greater strategic potential. The benefit depends on successful execution of the focused model.
Read all positive factors
Kustom Entertainment (KUST) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.48M
Dividend YieldN/A
Average Volume (3M)47.86K
Price to Earnings (P/E)―
Beta (1Y)2.13
Revenue Growth-28.31%
EPS Growth99.84%
CountryUS
Employees30
SectorCommunication Services
Sector Strength97
IndustryEntertainment
Share Statistics
EPS (TTM)-21.01
Shares Outstanding6,506,860
10 Day Avg. Volume99,163
30 Day Avg. Volume47,863
Financial Highlights & Ratios
PEG Ratio-0.89
Price to Book (P/B)4.28
Price to Sales (P/S)1.32
P/FCF Ratio-2.13
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit>-0.01
Enterprise Value/Ebitda>-0.01
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)-91.65
Revenue Forecast (FY)$19.30M
Kustom Entertainment Business Overview & Revenue Model
Company Description
Kustom Entertainment, Inc. is dedicated to the creation, production, and sale of digital audio, video capture, and speed measurement devices. Its business activities are structured into three principal divisions: Video Solutions, Revenue Cycle Man...
Kustom Entertainment Earnings Call Summary
Earnings Call Date:May 21, 2025
(Q1-2025)
| % Change Since: |
Next Earnings Date:Nov 18, 2026
Earnings Call Sentiment Positive
The earnings call reflected a positive sentiment overall. Despite the decline in revenue and the necessity of reverse stock splits, the company demonstrated significant improvements in gross margin, SG&A expenses, net income, and liquidity. The progress towards NASDAQ compliance and planned future initiatives in both the video solutions and entertainment segments further bolster confidence.Positive Updates
Significant Improvement in Gross Margin
The overall gross margin percentage improved to 36% from 28% last year, marking a positive trend in profitability despite a drop in revenue.
Negative Updates
Decline in Year-Over-Year Revenue
Revenues were down by over $1 million or 19%, primarily due to a decrease in video product sales, though a backlog of $2 million indicates potential future recovery.
Read all updates
Q1-2025 Updates
Positive
Negative
Significant Improvement in Gross Margin
The overall gross margin percentage improved to 36% from 28% last year, marking a positive trend in profitability despite a drop in revenue.
Read all positive updates
Company Guidance
During the Digital Ally First Quarter Earnings and Corporate Update Conference Call, significant guidance was provided concerning the company's financial performance and strategic direction. The company reported a 19% decline in year-over-year revenues for the first quarter of 2025, largely due to video product sales being down, although they had a substantial backlog of over $2 million, which they plan to fulfill in upcoming quarters. Despite the revenue drop, the gross margin dollars improved by $78,000, or 5%, with the overall gross margin percentage increasing to 36% from 28% last year. This was attributed to refocusing efforts in the Entertainment segment and cutting down on non-economical sponsorships. SG&A expenses saw a remarkable decrease of $2.6 million, or 72%, year-over-year, with improvements in head count, facilities expenses, and general overhead. The company achieved a net income of $4.2 million in the first quarter of 2025, a turnaround from a $3.9 million loss in the same period in 2024, resulting in a total net improvement of over $8 million. Additionally, the balance sheet was strengthened by a $14 million public offering in February 2025, which improved working capital to $3.4 million from a deficit of $19.4 million at the end of 2024. Digital Ally's equity improved by over $20 million, and they are now in a strong liquidity position to support their operational plans for 2025 and beyond. The company also addressed compliance issues with NASDAQ, implementing reverse stock splits to meet the $1 minimum bid price requirement and maintain their listing. Looking ahead, Digital Ally is optimistic about their video solutions and custom entertainment segments, with plans for new product announcements and an expansion of their event production group, Kustom 440.Kustom Entertainment Financial Statement Overview
Summary
Income Statement
12
Very Negative
Balance Sheet
38
Negative
Cash Flow
20
Very Negative
| Breakdown | TTM | Dec 2025 | Mar 2025 | Dec 2023 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 13.34M | 13.75M | 19.65M | 28.25M | 37.01M | 21.41M |
| Gross Profit | -192.49K | 1.35M | 5.49M | 5.76M | 2.32M | 5.66M |
| EBITDA | -12.61M | -5.96M | -15.88M | -20.11M | -16.66M | 26.38M |
| Net Income | -16.82M | -6.67M | -19.84M | -25.69M | -19.28M | 25.47M |
Balance Sheet | ||||||
| Total Assets | 17.55M | 19.33M | 27.74M | 47.03M | 56.67M | 82.99M |
| Cash, Cash Equivalents and Short-Term Investments | 830.19K | 757.37K | 454.31K | 680.55K | 3.53M | 32.01M |
| Total Debt | 1.93M | 2.27M | 8.66M | 9.92M | 1.78M | 2.18M |
| Total Liabilities | 15.27M | 16.96M | 36.75M | 35.58M | 20.33M | 27.13M |
| Stockholders Equity | 2.28M | 4.26M | -7.82M | 10.78M | 35.89M | 55.81M |
Cash Flow | ||||||
| Free Cash Flow | -3.54M | -8.53M | -5.28M | -10.13M | -20.77M | -25.44M |
| Operating Cash Flow | -3.39M | -8.27M | -5.11M | -9.89M | -18.58M | -17.83M |
| Investing Cash Flow | -195.19K | -367.48K | 387.55K | -240.71K | -2.94M | -19.12M |
| Financing Cash Flow | 4.15M | 9.30M | 4.40M | 7.38M | -6.95M | 64.60M |
Kustom Entertainment Technical Analysis
Negative
0.82
Price Trends
1.23
Negative
2.24
Negative
6.91
Negative
Market Momentum
-0.08
Positive
43.05
Neutral
3.36
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KUST, the sentiment is Negative. The current price of 0.82 is below the 20-day moving average (MA) of 1.20, below the 50-day MA of 1.23, and below the 200-day MA of 6.91, indicating a bearish trend. The MACD of -0.08 indicates Positive momentum. The RSI at 43.05 is Neutral, neither overbought nor oversold. The STOCH value of 3.36 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for KUST.
Kustom Entertainment Peers Comparison
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% | |
57 Neutral | $71.66M | 71.31 | 1.94% | ― | 7.23% | -52.84% | |
46 Neutral | $4.41M | -0.63 | -57.42% | ― | -0.79% | 67.82% | |
44 Neutral | $6.48M | -0.05 | -254.49% | ― | -28.31% | 99.84% | |
42 Neutral | $11.47M | -1.02 | -19.46% | ― | -3.07% | 31.46% | |
40 Underperform | $9.72M | -1.83 | -42.75% | ― | -49.69% | -17.61% |
* Communication Services Sector Average
KUST
Kustom Entertainment
1.00
-27.20
-96.47%
SPCB
SuperCom
11.41
2.59
29.37%
BKYI
BIO-key International
3.07
-4.45
-59.15%
IVDA
Iveda Solutions
0.34
-1.28
-79.26%
VRME
VerifyMe
0.74
-0.26
-25.75%
GFAI
Guardforce AI Co
0.37
-0.82
-69.07%
Kustom Entertainment Corporate Events
Business Operations and StrategyPrivate Placements and Financing
Kustom Entertainment Issues Restricted Shares in Private Transactions
Neutral
Aug 13, 2026
On August 7, 2026, Kustom Entertainment, Inc. issued 2,625,000 shares of common stock to various consultants, advisors, service providers, financing sources, and strategic partners as consideration for services tied to accrued obligations, asset a...
Business Operations and StrategyM&A Transactions
Kustom Entertainment Divests Video Unit, Refocuses on Live Events
Positive
Aug 4, 2026
On August 3, 2026, Kustom Entertainment completed the $6.1 million divestiture of its legacy video solutions division to Cycurion, selling substantially all related video hardware, camera, platform and software assets. Consideration includes $1.25...
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
Kustom Entertainment Amends Asset Sale, Refocuses on Festivals
Positive
Jul 27, 2026
On July 23, 2026, Kustom Entertainment executed an amendment and forbearance agreement to its June 24, 2026 asset sale with Cycurion, reshaping the divestiture of its legacy video solutions division into a $6.1 million package and extending the ex...
Business Operations and StrategyM&A Transactions
Kustom Entertainment Divests Video Unit to Refocus on Live Events
Positive
Jun 25, 2026
On June 24, 2026, Kustom Entertainment, Inc. agreed to sell all assets of its legacy video solutions division to Cycurion, Inc. for consideration valued at up to $5.5 million in cash and secured debt, plus 2,000,000 warrants to purchase Cycurion c...
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.