Freight Integration And Digital Advances Will Expand Global Markets

Key Takeaways

• Integration with major freight carriers and expanded e-commerce technology partnerships strengthen customer reach and position VerifyMe for growth in supply chain authentication solutions.
  
• Streamlined operations, strong cash reserves, and rising regulatory demand enhance profitability and create opportunities for strategic investment and long-term revenue growth.
  
• Heavy reliance on declining legacy segments, execution delays in integrations, and retreat from digital markets expose VerifyMe to growth stagnation, margin pressure, and secular disruption risks.

Catalysts

Offers brand protection and precision logistics solutions.

• The new integration with a second major freight carrier-covering a broader segment of the parcel shipment market-has the potential to substantially increase VerifyMe's customer reach and revenue streams as it comes online in 2026, capitalizing on the expanding need for supply chain transparency and product traceability.
  
• Expanded technology integrations with e-commerce shopping carts and shipping management software position VerifyMe to benefit as online commerce grows and as more brands seek advanced anti-counterfeiting and authentication capabilities, supporting future top-line revenue acceleration.
  
• Ongoing cost-cutting initiatives and process efficiencies (including a 27% YoY reduction in operating expenses and divestiture of non-core assets) are likely to drive improvements in net margins and support sustained positive cash flow from operations.
  
• A healthy balance sheet, growing cash reserves, and disciplined capital allocation create optionality for future M&A or strategic investments, which can provide new cross-selling opportunities and diverse recurring revenue streams to drive long-term earnings growth.
  
• Rising global regulatory requirements for authentication, serialization, and secure supply chain management-especially in logistics, pharmaceuticals, and high-value goods-are set to expand VerifyMe's addressable market, supporting both revenue growth and higher-margin service adoption.

VerifyMe Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming VerifyMe's revenue will decrease by 0.7% annually over the next 3 years.
• Analysts are not forecasting that VerifyMe will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate VerifyMe's profit margin will increase from -17.2% to the average US Electronic industry of 9.0% in 3 years.
• If VerifyMe's profit margin were to converge on the industry average, you could expect earnings to reach $2.0 million (and earnings per share of $0.13) by about September 2028, up from $-3.8 million today.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 14.6x on those 2028 earnings, up from -2.9x today. This future PE is lower than the current PE for the US Electronic industry at 23.1x.
• Analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 8.27%, as per the Simply Wall St company report.

VerifyMe Future Earnings Per Share Growth

Risks

• Ongoing revenue declines in key segments-PeriShip revenue fell 14% year-over-year in Q2 2025 largely due to the loss of major customers, and authentication revenue remains very low (just $27,000 in the quarter), highlighting potential long-term risks of customer concentration and limited exposure to higher-growth segments, which could impair top-line growth and long-term revenue stability.
  
• Margin compression trends-Gross profit margins decreased to 35% from 39% year-over-year, primarily due to the loss of higher-margin premium service contracts and ongoing reliance on lower-margin logistics services, which, if sustained, will negatively impact net margins and overall profitability.
  
• Integration and scalability risks-The anticipated integration with a new major freight carrier and third-party platforms is still pending and subject to execution delays; a slow or unsuccessful integration could hinder the company's access to broader markets, resulting in weaker-than-expected revenue expansion and increased operating costs if the transition is prolonged.
  
• Limited organic growth and uncertain M&A pipeline-Management highlighted that meaningful revenue growth from new carrier relationships and technology integrations will only start to materialize in 2026, and there is uncertainty and difficulty in the timing or probability of acquiring transformative or tuck-in assets, potentially resulting in extended periods of stagnant earnings or underutilized capital if external growth does not materialize as planned.
  
• Secular and industry headwinds-The divestiture of Trust Codes indicates possible retreat from higher-growth, digital authentication markets, while VerifyMe remains heavily dependent on physical logistics and packaging authentication; this positions the company at risk as secular trends shift toward blockchain and decentralized digital verification technologies, potentially reducing future demand for VerifyMe's legacy offerings and impacting long-term revenue and competitive positioning.

Valuation

• The analysts have a consensus price target of $1.5 for VerifyMe based on their expectations of its future earnings growth, profit margins and other risk factors.
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $21.6 million, earnings will come to $2.0 million, and it would be trading on a PE ratio of 14.6x, assuming you use a discount rate of 8.3%.
• Given the current share price of $0.89, the analyst price target of $1.5 is 40.7% higher.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.