SATO Technologies (SATO) AI Stock Analysis

• Market Cap: C$9.42M
• Dividend Yield: N/A
• Average Volume (3M): 43.06K
• Price to Earnings (P/E): 11.7
• Beta (1Y): 1.84
• Revenue Growth: -39.44%
• EPS Growth: -208.03%
• Country: CA
• Employees: 11
• Sector: Technology
• Sector Strength: 88
• Industry: Financial - Capital Markets
• EPS (TTM): -0.01
• Shares Outstanding: 52,336,590
• 10 Day Avg. Volume: 72,800
• 30 Day Avg. Volume: 43,064
• PEG Ratio: 0.26
• Price to Book (P/B): 1.88
• Price to Sales (P/S): 0.98
• P/FCF Ratio: -1.06
• 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: Hold
• Number of Analyst Covering: 1

• Rating: 54 Neutral
• Price Target: C$0.00 ▼(-100.00% Downside)

SATO Technologies' overall stock score is primarily influenced by its mixed financial performance and strong technical indicators. The company's improved profitability and reduced leverage are positive, but declining revenue growth and negative cash flows pose risks. Technical analysis shows positive momentum, but valuation concerns with a negative P/E ratio and no dividend yield weigh down the score.

Positive Factors

Profitability Improvement

Improved profitability metrics indicate better cost management and operational efficiency, which can enhance long-term financial stability.

Leverage Reduction

Reduced leverage suggests a more balanced capital structure, enhancing financial flexibility and reducing risk in economic downturns.

Strategic Partnerships

Partnerships with technology firms and distribution networks can drive growth by accessing new markets and increasing product adoption.

Negative Factors

Declining Revenue Growth

A decline in revenue growth indicates challenges in maintaining sales momentum, which may impact long-term market position and competitiveness.

Negative Cash Flows

Negative cash flows suggest insufficient cash generation from operations, potentially limiting reinvestment and growth opportunities.

Gross Margin Decline

A declining gross margin may indicate rising costs or pricing pressures, which could erode profitability if not addressed.

SATO Technologies Business Overview & Revenue Model

Company Description

SATO Technologies Corp. engages in the cryptocurrency mining business in Canada. The company engages in the business of utilizing equipment to solve computational problems to validate transactions on the blockchain; and provision of compute power for bitcoin mining. It also provides hosting services, including mining equipment; and operates a data center for digital asset mining. The company was formerly known as Canada Computational Unlimited Corp. SATO Technologies Corp. was founded in 2017 and is headquartered in Toronto, Canada.

How the Company Makes Money

SATO generates revenue through multiple streams, primarily from the sale of its hardware products, including barcode printers and RFID devices. Additionally, the company earns income from consumables such as labels and ribbons that are used with its printing systems. Another significant revenue stream comes from software solutions, which include data management and tracking applications that integrate with its hardware offerings. SATO also engages in service contracts and maintenance agreements, providing ongoing support to its customers. Strategic partnerships with other technology firms and distribution networks enhance its market reach and contribute to its earnings by expanding the customer base and facilitating access to new markets.

SATO Technologies Financial Statement Overview

Summary

SATO Technologies shows mixed financial performance. While profitability metrics have improved, with net profit margin increasing to 7.30% and EBIT margin to 13.08%, revenue growth has declined by 8.33%. The balance sheet shows reduced leverage with a debt-to-equity ratio of 1.05, but cash flow remains a concern with negative operating and free cash flows.

Income Statement

SATO Technologies shows a mixed performance in its income statement. The company experienced a decline in revenue growth rate by 8.33% in the latest year, indicating challenges in maintaining sales momentum. However, profitability metrics such as the net profit margin improved to 7.30% from 4.42% the previous year, and the EBIT margin increased to 13.08%, reflecting better cost management. Despite these improvements, the gross profit margin decreased significantly, suggesting potential issues with cost of goods sold or pricing strategy.

Balance Sheet

The balance sheet reflects a moderate financial position. The debt-to-equity ratio improved to 1.05 from 1.76, indicating a reduction in leverage and a more balanced capital structure. Return on equity increased to 14.08%, showcasing improved profitability relative to shareholder equity. However, the equity ratio remains low, suggesting limited equity financing and potential vulnerability to financial instability.

Cash Flow

Cash flow analysis reveals significant challenges. Operating cash flow and free cash flow are both negative, with a decline in free cash flow growth by 10.02%. The operating cash flow to net income ratio is negative, indicating that the company is not generating sufficient cash from operations to cover its net income. Although the free cash flow to net income ratio is positive, it is primarily due to the negative net income in previous periods, highlighting cash flow management issues.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	11.89M	16.10M	17.56M	10.62M	6.12M
Gross Profit	154.82K	3.05M	5.17M	2.33M	2.82M
EBITDA	109.38K	5.06M	4.22M	-5.67M	-391.78K
Net Income	-3.46M	1.17M	776.50K	-8.00M	-1.73M
Balance Sheet
Total Assets	14.37M	18.01M	21.68M	15.51M	12.50M
Cash, Cash Equivalents and Short-Term Investments	151.97K	658.49K	583.15K	359.39K	794.32K
Total Debt	6.61M	8.75M	11.64M	6.37M	1.39M
Total Liabilities	7.52M	9.67M	15.06M	10.74M	4.68M
Stockholders Equity	6.85M	8.34M	6.62M	4.77M	7.82M
Cash Flow
Free Cash Flow	-21.01M	-14.76M	-13.42M	-6.64M	-6.23M
Operating Cash Flow	-20.54M	-13.96M	-8.68M	648.79K	-2.73M
Investing Cash Flow	24.28M	17.06M	4.23M	-7.28M	-3.50M
Financing Cash Flow	-3.99M	-3.11M	4.75M	6.30M	6.76M

SATO Technologies Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.18
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:SATO, the sentiment is Positive. The current price of 0.18 is above the 20-day moving average (MA) of 0.16, above the 50-day MA of 0.14, and above the 200-day MA of 0.16, indicating a bullish trend. The MACD of 0.01 indicates Negative momentum. The RSI at 60.96 is Neutral, neither overbought nor oversold. The STOCH value of 79.17 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:SATO.

SATO Technologies Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
SATO	54 Neutral	C$9.42M	11.75	-41.81%	―	-39.44%	-208.03%
CSTR	43 Neutral	C$6.35M	―	-88.13%	―	-84.15%	-5.79%
CK	19 Underperform	C$1.90M	―	75.11%	―	―	60.00%

SATO Technologies Corporate Events

SATO Technologies Navigates Bitcoin Halving and Advances AI Transition in Q2 2025

SATO Technologies reported its Q2 2025 financial results, highlighting the impact of the April 2024 Bitcoin halving and increased network difficulty on its operations. Despite these challenges, SATO maintained strong operational performance, achieving positive mining profits and reducing downtime. The company is focusing on transitioning towards AI infrastructure, with significant investments in its AI Factory and strategic efforts to increase Bitcoin holdings. SATO’s management emphasizes the company’s adaptability and commitment to long-term shareholder value, despite current net losses and decreased digital asset revenue.

SATO Technologies Expands into AI with New Subsidiary Qritical AI

SATO Technologies Corp. has launched a new subsidiary, Qritical AI Inc., to enter the AI infrastructure sector. The subsidiary will develop AI Factory 1, a data center in Joliette, Québec, optimized for large language models and inference workloads, utilizing hydroelectric power. This move aligns with SATO’s strategy to integrate clean energy with advanced computing solutions, positioning the company as a leader in sustainable AI infrastructure.

SATO Technologies Corp. Announces Approval of Key Resolutions at 2025 Shareholder Meeting

SATO Technologies Corp. announced that all resolutions at its 2025 Annual General and Special Meeting were approved, including the re-election of its board members and the appointment of Davidson and Company LLP as auditors. The approval of the Omnibus Equity Incentive Plan and the strong shareholder support for the board’s decisions reflect positively on the company’s governance and strategic direction, potentially enhancing its industry positioning and stakeholder confidence.