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INNOVATE Corp
(NYSE:VATE)
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Rating:53Neutral
Price Target:
$7.50
▼(-1.19% Downside)
Action:Reiterated
Date:10/10/26
The score is driven primarily by improving operating performance and strong recent cash generation, but is capped by elevated balance-sheet risk (thin equity/high leverage) and continued net losses. Technical indicators are currently weak, while recent corporate actions (asset sale and debt reduction steps) provide a meaningful offset by strengthening the capital structure.
Positive Factors
Improving operating performance and cash generation
TTM revenue growth and EBIT-margin expansion indicate stronger operating execution across the portfolio, while positive operating and free cash flow show that growth is producing cash. If sustained, this combination can support reinvestment and debt reduction, although it has not yet translated into durable net profitability.
Negative Factors
Thin equity cushion and elevated leverage
The limited equity base leaves INNOVATE with little balance-sheet protection if operating performance weakens or asset values decline. High leverage and a history of negative equity can constrain investment, increase refinancing sensitivity, and keep debt reduction central to management’s strategy over the coming quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Improving operating performance and cash generation
TTM revenue growth and EBIT-margin expansion indicate stronger operating execution across the portfolio, while positive operating and free cash flow show that growth is producing cash. If sustained, this combination can support reinvestment and debt reduction, although it has not yet translated into durable net profitability.
Read all positive factors
INNOVATE Corp (VATE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$98.49M
Dividend Yield8.36%
Average Volume (3M)86.36K
Price to Earnings (P/E)―
Beta (1Y)2.56
Revenue Growth52.38%
EPS Growth70.10%
CountryUS
Employees3,663
SectorIndustrials
Sector Strength72
IndustryEngineering & Construction
Share Statistics
EPS (TTM)-1.84
Shares Outstanding13,641,866
10 Day Avg. Volume59,476
30 Day Avg. Volume86,359
Financial Highlights & Ratios
PEG Ratio-0.01
Price to Book (P/B)-0.26
Price to Sales (P/S)0.05
P/FCF Ratio0.50
Enterprise Value/Market Cap8.92
Enterprise Value/Revenue0.58
Enterprise Value/Gross Profit3.84
Enterprise Value/Ebitda7.69
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
INNOVATE Corp Business Overview & Revenue Model
Company Description
INNOVATE Corp. (VATE), a New York-based entity founded in 1994 and previously known as HC2 Holdings, Inc. until its name change in September 2021, manages a diverse range of subsidiaries operating within the infrastructure, life sciences, and spec...
How the Company Makes Money
INNOVATE Corp makes money primarily through revenue generated by its operating subsidiaries, which sell their products and services to customers in their respective end markets. Cash flow is then used to fund operations at the subsidiary level and...
INNOVATE Corp Earnings Call Summary
Earnings Call Date:May 14, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Nov 17, 2026
Earnings Call Sentiment Positive
The call reflects a predominantly positive operational story driven by a strong Infrastructure / DBMG performance that delivered outsized revenue (up 33% consolidated) and adjusted EBITDA improvement. Significant regulatory and clinical milestones at MediBeacon and international growth at R2 are constructive. However, meaningful challenges remain in smaller but important areas: Life Sciences revenues fell sharply (-48.4%), R2 is seeking external capital, Spectrum experienced advertising weakness and cancellations, DBMG saw ~140 bps gross margin compression, and consolidated debt increased due to PIK interest. Overall, the positive momentum in the company’s largest revenue driver and improved overall profitability outweighs the segment‑level headwinds, but capital structure and segment weaknesses warrant continued attention.Positive Updates
Consolidated Revenue Growth
Consolidated revenues of $364.8 million in Q1 2026, an increase of 33% versus $274.2 million in Q1 2025, driven primarily by Infrastructure.
Negative Updates
Life Sciences Revenue Decline
Life Sciences revenue decreased 48.4% to $1.6 million from $3.1 million in Q1 2025, largely due to lower R2 Glacial FX and Glacial Rx unit sales in North America—necessitating capital raises to continue progression.
Read all updates
Q1-2026 Updates
Positive
Negative
Consolidated Revenue Growth
Consolidated revenues of $364.8 million in Q1 2026, an increase of 33% versus $274.2 million in Q1 2025, driven primarily by Infrastructure.
Read all positive updates
Company Guidance
Management’s guidance was largely qualitative and focused on improving 2026 visibility, continued Infrastructure momentum and pipeline-driven backlog growth, while they work on capital‑structure alternatives; key Q1 metrics referenced include consolidated revenue $364.8M (up 33% YoY), total adjusted EBITDA $19.7M (vs. $7.2M), net loss $17.2M or $1.29 per diluted share (vs. $24.8M, $1.89), cash $134.6M, and total debt $699M (up $11.8M); Infrastructure/DBMG exited Q1 with revenue $357.9M (up 35.1% YoY), adjusted EBITDA $23.0M, gross margin 14.2% (≈140 bps compression YoY), reported backlog $1.6B and adjusted backlog $1.8B; Life Sciences/R2 reported Q1 revenue $1.6M (down 48.4%), total demand $2.2M and a backlog of ≈160 systems (~$2M) and is seeking external capital; Spectrum had Q1 revenue $5.3M and adjusted EBITDA $0.7M but cited near‑term softness offset by regulatory tailwinds (applications for >60 LPT licenses, >25 Class A relocations) and potential commercial opportunities.INNOVATE Corp Financial Statement Overview
Summary
Income Statement
52
Neutral
Balance Sheet
34
Negative
Cash Flow
67
Positive
| Breakdown | TTM | Dec 2025 | Mar 2025 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.52B | 1.25B | 1.11B | 1.42B | 1.64B | 1.21B |
| Gross Profit | 228.70M | 182.20M | 208.80M | 216.00M | 221.40M | 183.70M |
| EBITDA | 114.30M | 57.90M | 74.00M | 63.10M | 62.80M | 31.80M |
| Net Income | -22.40M | -60.60M | -34.60M | -35.20M | -35.90M | -227.50M |
Balance Sheet | ||||||
| Total Assets | 1.01B | 950.10M | 891.10M | 1.04B | 1.15B | 1.08B |
| Cash, Cash Equivalents and Short-Term Investments | 87.80M | 112.10M | 48.80M | 80.80M | 80.40M | 45.50M |
| Total Debt | 682.40M | 717.50M | 719.20M | 771.90M | 785.30M | 684.80M |
| Total Liabilities | 1.23B | 1.17B | 1.05B | 1.20B | 1.18B | 1.09B |
| Stockholders Equity | -233.50M | -230.80M | -180.40M | -165.50M | -103.70M | -84.30M |
Cash Flow | ||||||
| Free Cash Flow | 106.00M | 120.50M | -9.90M | 8.10M | -30.20M | 65.40M |
| Operating Cash Flow | 141.20M | 146.60M | 9.10M | 26.50M | -9.50M | 89.50M |
| Investing Cash Flow | -33.00M | -22.60M | -13.90M | 23.20M | -22.50M | -299.20M |
| Financing Cash Flow | -51.60M | -61.20M | -26.50M | -49.40M | 68.10M | 17.80M |
INNOVATE Corp Technical Analysis
Negative
7.59
Price Trends
7.62
Negative
10.79
Negative
8.87
Negative
Market Momentum
-0.15
Positive
43.54
Neutral
27.72
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VATE, the sentiment is Negative. The current price of 7.59 is above the 20-day moving average (MA) of 7.54, below the 50-day MA of 7.62, and below the 200-day MA of 8.87, indicating a bearish trend. The MACD of -0.15 indicates Positive momentum. The RSI at 43.54 is Neutral, neither overbought nor oversold. The STOCH value of 27.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for VATE.
INNOVATE Corp Risk Analysis
INNOVATE Corp disclosed 87 risk factors in its most recent earnings report. INNOVATE Corp 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
INNOVATE Corp Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
64 Neutral | $194.06M | 17.20 | 14.64% | 1.35% | 21.21% | 252.85% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
53 Neutral | $98.49M | -3.91 | 9.58% | 8.36% | 52.38% | 70.10% | |
49 Neutral | $129.38M | -6.67 | 30.27% | ― | -15.98% | 73.32% | |
48 Neutral | $14.85M | -2.12 | -24.03% | 161786.83% | 10.34% | 99.97% |
* Industrials Sector Average
VATE
INNOVATE Corp
7.22
2.56
54.94%
SUNE
SUNation Energy
2.28
0.58
34.12%
ESOA
Energy Services of America
10.40
0.57
5.77%
SHIM
Shimmick Corporation
3.13
0.64
25.70%
SKK
SKK Holdings Limited
5.45
1.40
34.57%
INNOVATE Corp Corporate Events
Business Operations and StrategyPrivate Placements and Financing
INNOVATE Corp amends 2027 convertible notes redemption terms
Positive
Oct 9, 2026
INNOVATE Corp. has entered into a supplemental indenture amending the terms of its 9.500% Convertible Senior Secured Notes due 2027, in connection with the stock consideration it received from the sale of DBMG Global Inc. The amendment requires th...
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
INNOVATE Corp Sells DBM Global, Accelerates Debt Reduction
Positive
Oct 5, 2026
On October 5, 2026, INNOVATE Corp. completed the sale of its majority-owned subsidiary DBM Global, Inc. to IES Holdings, Inc., transferring 100% of DBMG’s shares, including approximately 91.21% previously held through DBM Global Intermediate...
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
INNOVATE Corp completes HC2 stake sale and recapitalization
Positive
Sep 2, 2026
On August 28, 2026, INNOVATE Corp. executed a tenth amendment to its credit agreement with MSD PCOF Partners IX, LLC, extending the maturity of its existing facility to December 31, 2026, reinforcing near-term financing flexibility. On September 1...
Business Operations and StrategyProduct-Related Announcements
MediBeacon’s Kidney Diagnostic Platform Nominated for Prix Galien
Positive
Aug 18, 2026
MediBeacon’s TGFR System, which uses the Lumitrace (relmapirazin) fluorescent tracer, a monitor and reusable sensor to deliver point-of-care transdermal kidney function measurements, has been nominated by The Galien Foundation for the 2026 P...
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
INNOVATE Launches ATM Equity Program to Bolster Liquidity
Neutral
Aug 10, 2026
On August 7, 2026, INNOVATE Corp agreed to sell its approximately 91.21% stake in DBM Global Inc. to IES Holdings Inc., as part of a $650 million cash-and-stock transaction for 100% of DBMG. The deal, expected to close in the quarter ending Decemb...
Business Operations and StrategyFinancial DisclosuresM&A TransactionsPrivate Placements and Financing
INNOVATE Corp Posts Strong Q2 Results, Refocuses Portfolio
Positive
Aug 6, 2026
INNOVATE Corp. reported strong consolidated results for the second quarter ended June 30, 2026, with revenue rising to $421.6 million from $242.0 million a year earlier and net income attributable to common stockholders improving to $10.4 million ...
Business Operations and StrategyPrivate Placements and Financing
INNOVATE Corp Adopts PIK Interest to Bolster Liquidity
Positive
Aug 3, 2026
On July 31, 2026, INNOVATE Corp. executed supplemental indentures on its 10.500% Senior Secured Notes due 2027 and 9.5% Convertible Senior Secured Notes due 2027, allowing consenting holders to receive interest from February 1, 2026 through July 3...
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.