AMEX:VHC

Stock Analysis Report

Executive Summary

VirnetX Holding Corporation, through its subsidiary VirnetX, Inc., operates as an Internet security software and technology company primarily in the United States.

Risk Analysis

Earnings have declined by -4.7% per year over past 5 years

Has less than 1 year of cash runway

Makes less than USD$1m in revenue ($85K)

Currently unprofitable and not forecast to become profitable over the next 3 years

+ 2 more risks


Snowflake Analysis

Adequate balance sheet with weak fundamentals.


Similar Companies

Share Price & News

How has VirnetX Holding's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: VHC's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-2.4%

VHC

2.4%

US Software

1.7%

US Market


1 Year Return

-27.2%

VHC

39.0%

US Software

23.2%

US Market

Return vs Industry: VHC underperformed the US Software industry which returned 39.8% over the past year.

Return vs Market: VHC underperformed the US Market which returned 24.7% over the past year.


Shareholder returns

VHCIndustryMarket
7 Day-2.4%2.4%1.7%
30 Day4.4%7.8%4.2%
90 Day-33.0%19.4%11.9%
1 Year-27.2%-27.2%40.2%39.0%25.8%23.2%
3 Year74.8%74.8%144.0%134.3%52.8%42.9%
5 Year-25.1%-25.1%198.3%177.0%75.2%55.8%

Price Volatility Vs. Market

How volatile is VirnetX Holding's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is VirnetX Holding undervalued compared to its fair value and its price relative to the market?

49.15x

Price to Book (PB) ratio


Share Price vs. Fair Value

Below Fair Value: Insufficient data to calculate VHC's fair value to establish if it is undervalued.

Significantly Below Fair Value: Insufficient data to calculate VHC's fair value to establish if it is undervalued.


Price To Earnings Ratio

PE vs Industry: VHC is unprofitable, so we can't compare its PE Ratio to the Software industry average.

PE vs Market: VHC is unprofitable, so we can't compare its PE Ratio to the US market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate VHC's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: VHC is overvalued based on its PB Ratio (49.6x) compared to the US Software industry average (5.9x).


Next Steps

Future Growth

How is VirnetX Holding forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

15.8%

Forecasted Software industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as VirnetX Holding has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

Past Performance

How has VirnetX Holding performed over the past 5 years?

-4.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: VHC is currently unprofitable.

Growing Profit Margin: VHC is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: VHC is unprofitable, and losses have increased over the past 5 years at a rate of -4.7% per year.

Accelerating Growth: Unable to compare VHC's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: VHC is unprofitable, making it difficult to compare its past year earnings growth to the Software industry (20.8%).


Return on Equity

High ROE: VHC has a negative Return on Equity (-374.31%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is VirnetX Holding's financial position?


Financial Position Analysis

Short Term Liabilities: VHC's short term assets ($5.5M) exceed its short term liabilities ($1.6M).

Long Term Liabilities: VHC has no long term liabilities.


Debt to Equity History and Analysis

Debt Level: VHC is debt free.

Reducing Debt: VHC has not had any debt for past 5 years.


Balance Sheet

Inventory Level: VHC has a low level of unsold assets or inventory.

Debt Coverage by Assets: Insufficient data to determine if VHC's debt is covered by short term assets.


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: VHC has less than a year of cash runway based on its current free cash flow.

Forecast Cash Runway: VHC has less than a year of cash runway if free cash flow continues to grow at historical rates of 0.4% each year.


Next Steps

Dividend

What is VirnetX Holding's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.6%industryaverage1.3%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate VHC's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate VHC's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if VHC's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if VHC's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of VHC's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of VirnetX Holding's salary, the management and board of directors tenure and is there insider trading?

9.2yrs

Average management tenure


CEO

Kendall Larsen (62yo)

12.5yrs

Tenure

US$1,853,067

Compensation

Mr. Kendall Larsen has been the Chief Executive Officer and President of VirnetX Holding Corp since June 10, 2007 and July 5, 2007 respectively and VirnetX Inc. since August 2005. Mr. Larsen served as the  ...


CEO Compensation Analysis

Compensation vs Market: Kendall's total compensation ($USD1.85M) is above average for companies of similar size in the US market ($USD1.08M).

Compensation vs Earnings: Kendall's compensation has increased whilst the company is unprofitable.


Management Age and Tenure

9.2yrs

Average Tenure

64.5yo

Average Age

Experienced Management: VHC's management team is seasoned and experienced (9.2 years average tenure).


Board Age and Tenure

11.3yrs

Average Tenure

62yo

Average Age

Experienced Board: VHC's board of directors are seasoned and experienced ( 11.3 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 11.4%.


Management Team

  • Katie Martin (57yo)

    Corporate Secretary

    • Kendall Larsen (62yo)

      Chairman

      • Tenure: 12.5yrs
      • Compensation: US$1.85m
    • Willard Thomas

      Vice President of Worldwide Sales

      • Tenure: 4.3yrs
    • Richard Nance (70yo)

      Chief Financial Officer

      • Tenure: 7.8yrs
      • Compensation: US$316.13k
    • Kathleen Larsen

      Co-Founder and Chief Administration Officer & Secretary

      • Sameer Mathur

        Vice President of Corporate Development & Marketing

        • Tenure: 12.5yrs
      • Bob Short (67yo)

        CTO, Chief Scientist & Director

        • Tenure: 9.5yrs
        • Compensation: US$1.07m
      • Greg Wood

        Vice President of Corporate Communications

        • Tenure: 8.8yrs

      Board Members

      • Kendall Larsen (62yo)

        Chairman

        • Tenure: 12.5yrs
        • Compensation: US$1.85m
      • John Slitz (71yo)

        Member of Advisory Board

        • Tenure: 11.3yrs
      • Tom O'Brien (52yo)

        Independent Director

        • Tenure: 12.5yrs
        • Compensation: US$122.56k
      • John Cronin (64yo)

        Member of Advisory Board

        • Tenure: 11.3yrs
      • Michael Angelo (59yo)

        Independent Director

        • Tenure: 12.5yrs
        • Compensation: US$114.31k
      • Bob Short (67yo)

        CTO, Chief Scientist & Director

        • Tenure: 9.5yrs
        • Compensation: US$1.07m
      • Paul Henderson

        Member of Advisory Board

        • Tenure: 11.3yrs
      • Gary Feiner (56yo)

        Independent Director

        • Tenure: 6yrs
        • Compensation: US$115.41k

      Company Information

      VirnetX Holding Corp's company bio, employee growth, exchange listings and data sources


      Key Information

      • Name: VirnetX Holding Corp
      • Ticker: VHC
      • Exchange: AMEX
      • Founded: 2005
      • Industry: Application Software
      • Sector: Software
      • Market Cap: US$279.431m
      • Shares outstanding: 69.51m
      • Website: https://www.virnetx.com

      Number of Employees


      Location

      • VirnetX Holding Corp
      • 308 Dorla Court
      • Suite 206
      • Zephyr Cove
      • Nevada
      • 89448
      • United States

      Listings

      TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
      VHCAMEX (NYSE MKT LLC)YesCommon SharesUSUSDJul 2007
      VN2DB (Deutsche Boerse AG)YesCommon SharesDEEURJul 2007

      Biography

      VirnetX Holding Corporation, through its subsidiary VirnetX, Inc., operates as an Internet security software and technology company primarily in the United States. The company develops software and technology solutions, including secure domain name registry and GABRIEL Connection Technology that are designed to secure communications over the Internet, as well as enable organizations and individuals to establish communities of secure, registered users, and transmit information between various devices, networks, and operating systems. These secure network communities are designed to support content applications, such as instant messaging, voice over Internet protocol, mobile services, streaming video, file transfer, and remote desktop. It also offers a portfolio of licenses and services, such as VirnetX technology licensing; GABRIEL Connection Technology software development kit, including object libraries, sample code, testing and quality assurance tools, and supporting documentation required for customers to implement the company’s technology; secure domain name registrar service; registrar server software; connection server software; relay server software; and secure domain name master registry and connection, and technical support services. The company serves domain infrastructure and communication service providers, and system integrators; and enterprise customers, developers, and original equipment manufacturers of chips, servers, smart phones, tablets, e-Readers, laptops, net books, and other devices in the IP-telephony, mobility, fixed-mobile convergence, and unified communications markets. VirnetX Holding Corporation was incorporated in 2005 and is based in Zephyr Cove, Nevada. 


      Company Analysis and Financial Data Status

      All financial data provided by Standard & Poor's Capital IQ.
      DataLast Updated (UTC time)
      Company Analysis2020/01/17 01:56
      End of Day Share Price2020/01/16 00:00
      Earnings2019/09/30
      Annual Earnings2018/12/31


      Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.