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374Water (SCWO)
NASDAQ:SCWO
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374Water
(NASDAQ:SCWO)
Rating:39Underperform
Price Target:―
Positive Factors
Financial Position
SCWO ended 3Q24 with $2.0M in cash and no debt, and raised net proceeds of $11.8M through an equity offering with warrants.
Funding and Orders
Municipalities in California and Florida have secured funding to order wastewater treatment units from SCWO.
Market Opportunity
A meaningful long-term market opportunity for SCWO's waste treatment technology has been identified based on coverage of environmental and water consulting company Tetra Tech.
Negative Factors
EBITDA Loss
SCWO's 2Q24 EBITDA loss of ($2.7M) was wider than the forecast of ($2.0M).
Revenue Performance
SCWO reported 2Q24 results with revenue of $37K, below the forecast of ~200K.
374Water (SCWO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$57.24M
Dividend YieldN/A
Average Volume (3M)2.31M
Price to Earnings (P/E)―
Beta (1Y)1.71
Revenue GrowthN/A
EPS GrowthN/A
CountryUS
Employees27
SectorIndustrials
Sector Strength88
IndustryIndustrial - Pollution & Treatment Controls
Share Statistics
EPS (TTM)-0.03
Shares Outstanding144,682,970
10 Day Avg. Volume6,542,642
30 Day Avg. Volume2,314,447
Financial Highlights & Ratios
PEG Ratio0.18
Price to Book (P/B)3.52
Price to Sales (P/S)0.00
P/FCF Ratio-4.91
Enterprise Value/Market Cap0.66
Enterprise Value/Revenue22.69
Enterprise Value/Gross Profit-80.57
Enterprise Value/Ebitda-0.79
Forecast
1Y Price Target
$2.50Price Target Upside509.76% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering0
374Water Business Overview & Revenue Model
Company Description374Water, Inc. focuses on providing a technology that addresses environmental pollution challenges. It develops a waste stream treatment system based on supercritical water oxidation technology. The company's AirSCWO systems are used to treat various hazardous and non-hazardous waste streams. Its clients include channel partners, such as engineering-procurement and construction companies, technology integrators, waste service providers, operations service providers, and NGOs; and end-users, which include utilities, industrial manufacturing facilities, waste management and environmental remediation companies, agricultural companies, and governmental entities. The company is based in Durham, North Carolina.
How the Company Makes Money374Water makes money primarily through the sale and lease of its SCWO systems to municipalities, industries, and waste management companies. The company also generates revenue from providing maintenance, support, and operational services for its systems. Additionally, 374Water may engage in partnerships with governments and private entities to expand its reach and application of SCWO technology. These collaborations can lead to joint projects and shared revenue streams that enhance the company's financial performance.
374Water Earnings Call Summary
Earnings Call Date:May 15, 2025
(Q1-2025)
| % Change Since: 46.43%|
Next Earnings Date:Aug 13, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a company at a pivotal growth phase with strong partnerships, validation from the EPA, and federal engagement, indicating a positive trajectory. However, the increase in operating expenses, net loss, and delays in deployment pose significant challenges.Q1-2025 Updates
Positive Updates
Strategic Partnership with Crystal Clean
374Water signed a waste destruction services term sheet with Crystal Clean, which is expected to generate significant revenue. The partnership involves hosting the AirSCWO system at Crystal Clean’s Ohio TSDF facility and includes a revenue-sharing model.
EPA Validation of Technology
The AirSCWO technology has been named by the EPA as an emerging PFAS destruction technology, reinforcing its efficacy and market potential.
Significant Federal Engagements
374Water was selected for a Department of Defense initiative for commercial-scale PFAS solutions, which is expected to unlock direct contracting opportunities with the federal government.
Operational and Financial Growth
Revenue increased to $543,000 in Q1 2025 from $315,000 in the prior year quarter, driven by a full-scale demonstration and increased services revenue.
Leadership and Board Strengthening
The company welcomed Raj Melkote as Chief Technology Officer, and Steve Jones joined the Board of Directors, enhancing the leadership team.
Negative Updates
Operating Expenses Surge
Total operating expenses increased by 106% to $3.9 million in Q1 2025, primarily due to non-recurring expenses, increased stock-based compensation, and continued commercialization efforts.
Net Loss Increase
The net loss for the quarter increased to $3.7 million from $2.0 million in the prior year quarter.
Cash Position Decline
Cash and cash equivalents decreased to $6.9 million as of March 31, 2025, from $10.7 million at the end of 2024.
Delay in System Deployment
Full system installation at OC San is likely to be delayed by a few months due to necessary upgrades and permit acquisition.
Company Guidance
During the 374Water First Quarter 2025 Financial Results Conference call, guidance was provided on the company's operational and financial trajectory. The company is targeting the $450 billion waste destruction and management market with its AirSCWO technology, aiming to achieve $250 million to $500 million in annual revenue within five years. For 2025, the company anticipates generating $4 million to $6 million in revenue. They have secured contracts, including a waste destruction services contract with the University of North Carolina, potentially worth over $5 million, and a term sheet with Crystal Clean which could generate $12 million to $20 million annually. In Q1 2025, 374Water reported revenues of $543,000, up from $315,000 in the prior year, and a net loss of $3.7 million compared to $2.0 million the previous year. The company's operating expenses increased to $3.9 million from $1.9 million, largely due to professional fees and general administrative expenses. Looking ahead, strategic partnerships and regulatory momentum around PFAS provide positive tailwinds for the company's growth strategy.374Water Financial Statement Overview
Summary
374Water faces severe financial challenges, with negative gross profit and net income, unstable revenue, and consistent cash flow issues. Despite high cash reserves and low debt, the financial outlook remains weak due to persistent losses and cash burn.Income Statement
374Water's income statement reveals a challenging financial situation. The company has exhibited negative gross profit and net income across recent years, indicating persistent losses. EBIT and EBITDA margins are negative, reflecting operational inefficiencies. Revenue growth is unstable, with significant fluctuations and a recent decline. These factors contribute to a low income statement score.15
Very Negative
Balance Sheet
The balance sheet shows a mixed picture with high cash reserves and a very low debt level, which is a positive aspect. However, the equity ratio is low due to significant accumulated losses, and the company has struggled with negative stockholders' equity in the past. The debt-to-equity ratio is not applicable due to negative equity in earlier years. Overall, the balance sheet suggests some financial resilience but with underlying weaknesses.45
Neutral
Cash Flow
The cash flow analysis highlights significant challenges. Operating cash flow has consistently been negative, indicating cash burn. Free cash flow growth is difficult to assess but remains negative, showing issues with cash generation. The company relies on financing activities for liquidity, which poses sustainability risks. These concerns lead to a low cash flow score.20
Very Negative
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 673.27K | 445.44K | 743.95K | 3.02M | 48.10K | 40.00K | Gross Profit |
| -472.40K | -912.71K | -1.11M | 336.50K | -1.35M | 24.85K | EBIT |
| -14.39M | -12.80M | -8.64M | -4.76M | -3.17M | -398.37K | EBITDA |
| -14.12M | -12.21M | -8.56M | -4.69M | -3.12M | -10.75K | Net Income Common Stockholders |
| -14.11M | -12.43M | -8.10M | -4.62M | -3.16M | -668.96K |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 6.88M | 10.65M | 10.45M | 5.99M | 11.13M | 95.39K | Total Assets |
| 4.40M | 19.18M | 16.12M | 9.92M | 12.41M | 130.39K | Total Debt |
| 628.91K | 652.70K | 0.00 | 0.00 | 0.00 | 515.99K | Net Debt |
| -6.25M | -10.00M | -10.45M | -4.05M | -11.13M | 420.60K | Total Liabilities |
| 553.21K | 3.71M | 1.37M | 1.66M | 86.37K | 592.37K | Stockholders Equity |
| 12.58M | 15.47T | 14.75M | 8.25M | 12.33M | -461.98K |
| Cash Flow | Free Cash Flow | ||||
| -9.03M | -11.24M | -9.15M | -5.15M | -1.93M | -502.30K | Operating Cash Flow |
| -8.08M | -10.59M | -9.03M | -4.95M | -1.84M | -502.02K | Investing Cash Flow |
| -950.28K | -653.54K | 1.85M | -2.16M | 28.34K | -275.00 | Financing Cash Flow |
| 11.47M | 11.45M | 13.58M | 25.05K | 12.87M | 577.38K |
374Water Technical Analysis
Positive
0.41
Price Trends
0.33
Positive
0.36
Positive
0.78
Negative
Market Momentum
0.03
Positive
54.46
Neutral
17.97
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SCWO, the sentiment is Positive. The current price of 0.41 is above the 20-day moving average (MA) of 0.38, above the 50-day MA of 0.33, and below the 200-day MA of 0.78, indicating a neutral trend. The MACD of 0.03 indicates Positive momentum. The RSI at 54.46 is Neutral, neither overbought nor oversold. The STOCH value of 17.97 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SCWO.
374Water Peers Comparison
Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $943.06M | 20.96 | 18.34% | ― | 8.89% | 278.44% | |
66 Neutral | $4.51B | 12.29 | 5.40% | 3.67% | 4.15% | -12.21% | |
55 Neutral | $32.40M | ― | -75.96% | ― | 10.88% | 3.57% | |
54 Neutral | $60.63M | ― | -6.95% | ― | 7.30% | -247.48% | |
54 Neutral | $15.38M | ― | -69.66% | ― | -17.77% | 0.86% | |
51 Neutral | $22.02M | ― | -62.68% | ― | 19.09% | 3.50% | |
39 Underperform | $57.24M | ― | -110.71% | ― | ― | ― |
* Industrials Sector Average
Performance Comparison
SCWO
374Water
0.41
-0.75
-64.66%
CECO
Ceco Environmental
27.14
3.04
12.61%
FTEK
Fuel Tech
1.95
0.90
85.71%
CLIR
ClearSign Combustion
0.60
-0.12
-16.67%
LIQT
LiqTech International
1.60
-0.76
-32.20%
TOMZ
TOMI Environmental Solutions
1.11
0.04
3.74%
374Water Corporate Events
Executive/Board Changes
374Water Appoints Stephen Jones to Board
Neutral
Apr 17, 2025
On April 13, 2025, 374Water Inc. announced the appointment of Stephen Jones to its Board of Directors, effective April 14, 2025. Mr. Jones brings extensive experience from his previous roles, including as President and CEO of Covanta Holding Corporation and various senior positions at Air Products and Chemicals, Inc. This strategic addition to the board is expected to enhance 374Water’s leadership capabilities, although specific committee assignments and compensation details for Mr. Jones are yet to be determined.
Spark’s Take on SCWO Stock
According to Spark, TipRanks’ AI Analyst, SCWO is a Underperform.
Overall, 374Water’s stock score is primarily constrained by its severe financial issues and negative valuation metrics. The company’s potential for future growth, as laid out in the earnings call, is promising but requires overcoming significant short-term challenges. Current technical analysis suggests a bearish trend, further impacting the stock’s attractiveness.
To see Spark’s full report on SCWO stock, click here.
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.