OTCPK:SOFO

Stock Analysis Report

Executive Summary

Sonic Foundry, Inc. provides enterprise solutions and services for the Web communications market in the United States, Europe, the Middle East, Asia, and internationally.

Risk Analysis

Earnings have declined by -21.67% per year over past 5 years

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

Shareholders have been diluted in the past year

Does not have a meaningful market cap ($11M)



Snowflake Analysis

Imperfect balance sheet with weak fundamentals.

Share Price & News

How has Sonic Foundry's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SOFO has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

n/a

SOFO

1.7%

US Software

1.5%

US Market


1 Year Return

38.7%

SOFO

42.3%

US Software

20.1%

US Market

Return vs Industry: SOFO underperformed the US Software industry which returned 42.2% over the past year.

Return vs Market: SOFO exceeded the US Market which returned 20.1% over the past year.


Shareholder returns

SOFOIndustryMarket
7 Dayn/a1.7%1.5%
30 Day8.6%7.7%1.4%
90 Day51.4%18.4%8.7%
1 Year38.7%38.7%43.9%42.3%22.7%20.1%
3 Year-65.4%-65.4%152.8%142.4%50.1%40.5%
5 Year-79.9%-79.9%224.7%201.5%73.1%54.1%

Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

Is Sonic Foundry undervalued compared to its fair value and its price relative to the market?


In this section, we usually try to help investors determine whether Sonic Foundry is trading at an attractive price based on the cash flow it is expected to produce in the future. But as Sonic Foundry has not provided consistent financial data, and the stock also has no analyst forecast or coverage, its intrinsic value cannot be reliably calculated by extrapolating past data or using analyst consensus cash flow predictions.

This is quite a rare situation as 89% of companies covered by Simply Wall St do have a valuation analysis.


Next Steps

  • Take a look at our analysis of SOFO’s management and see if the CEO’s compensation is within a reasonable range, who is on the board and if insiders have been trading lately.
  • When valuing a company like this, investors focus more on how they perceive the size of the opportunity, the company's ability to deliver and scale, and the strength of the team. While we are not analysing this type of data at the moment, if you don’t know where to start, we recommend reading through Sonic Foundry regulatory filings here.
  • Explore potentially undervalued companies in the Software industry.

Future Growth

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

11.4%

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 Sonic Foundry 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

  • Take a look at our analysis of SOFO’s management and see if the CEO’s compensation is within a reasonable range, who is on the board and if insiders have been trading lately.
  • While we do not consider unaudited financials to be a reliable enough to include in our analysis, you can access them on the OTC Markets Website. If you are looking for more of a qualitative research into the company, you can access Sonic Foundry's filings and announcements here.
  • Explore growth companies in the Software industry.

Past Performance

How has Sonic Foundry performed over the past 5 years?

-21.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SOFO is currently unprofitable.

Growing Profit Margin: SOFO is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: SOFO is unprofitable, and losses have increased over the past 5 years at a rate of -21.7% per year.

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

Earnings vs Industry: SOFO is unprofitable, making it difficult to compare its past year earnings growth to the Software industry (17.1%).


Return on Equity

High ROE: SOFO's liabilities exceed its assets, so it is difficult to calculate its Return on Equity.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Sonic Foundry's financial position?


Financial Position Analysis

Short Term Liabilities: SOFO has negative shareholder equity, which is a more serious situation than short term assets not covering short term liabilities.

Long Term Liabilities: SOFO has negative shareholder equity, which is a more serious situation than short term assets not covering long term liabilities.


Debt to Equity History and Analysis

Debt Level: SOFO has negative shareholder equity, which is a more serious situation than a high debt level.

Reducing Debt: SOFO's has negative shareholder equity, so we do not need to check if its debt has reduced over time.


Balance Sheet

Inventory Level: SOFO has a high level of physical assets or inventory.

Debt Coverage by Assets: SOFO has negative shareholder equity (liabilities exceed assets) therefore debt is not 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: SOFO has sufficient cash runway for more than a year based on its current free cash flow.

Forecast Cash Runway: SOFO has sufficient cash runway for 1.3 years if free cash flow continues to reduce at historical rates of -0.5% each year.


Next Steps

Dividend

What is Sonic Foundry's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage1.2%forecastin3Yearsn/a

Current dividend yield vs market & industry

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

High Dividend: Unable to evaluate SOFO'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 SOFO's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if SOFO'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 SOFO's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

0.8yrs

Average management tenure


CEO

Michael Norregaard (57yo)

0.8yrs

Tenure

US$262,764

Compensation

Mr. Michael Norregaard has been the Chief Executive Officer Sonic Foundry, Inc. since May 1, 2019 and served as its Chief Operating Officer since March 2019 until May 1, 2019. He served as Senior Vice Pres ...


CEO Compensation Analysis

Compensation vs Market: Michael's total compensation ($USD262.76K) is below average for companies of similar size in the US market ($USD521.92K).

Compensation vs Earnings: Insufficient data to compare Michael's compensation with company performance.


Leadership Team

NamePositionTenureCompensationOwnership
Michael Norregaard
Chief Executive Officer0.8yrsUS$262.76k0.088% $9.9k
Gary Weis
Senior Advisor & Director16yrsUS$722.14k1.41% $158.2k
Robert Lipps
Executive Vice President0yrsUS$285.99k0.031% $3.4k
Kelsy Boyd
Senior Vice President of Finance & Accounting0yrsno datano data
Tammy Jackson
Vice President of Marketing & Communications0yrsno datano data
Elizabeth Collins
Senior Vice President - North American Sales2.9yrsno datano data
Austen Portz
Senior Vice President of Engineering0.4yrsno datano data
Kelly Hanson
Assistant Controller0yrsno datano data
Nicole Wise
Director of Communications0yrsno datano data

0.8yrs

Average Tenure

57yo

Average Age

Experienced Management: SOFO's management team is not considered experienced ( 0.8 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Gary Weis
Senior Advisor & Director16yrsUS$722.14k1.41% $158.2k
Frederick Kopko
Director24.2yrsUS$15.44k1.17% $130.8k
Mark Burish
Independent Non-Executive Chairman8.8yrsUS$35.94k32.05% $3.6m
Nelson Murphy
Independent Director2.3yrsUS$35.18k0.78% $87.5k
David Slayton
Independent Director2.3yrsUS$30.94k0.89% $100.3k
Brian Wiegand
Independent Director7.6yrsUS$30.44k1.04% $116.1k

8.2yrs

Average Tenure

60.5yo

Average Age

Experienced Board: SOFO's board of directors are considered experienced (8.2 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

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 29.6%.


Top Shareholders

Company Information

Sonic Foundry, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Sonic Foundry, Inc.
  • Ticker: SOFO
  • Exchange: OTCPK
  • Founded: 1991
  • Industry: Application Software
  • Sector: Software
  • Market Cap: US$11.205m
  • Shares outstanding: 6.79m
  • Website: https://www.sonicfoundry.com

Number of Employees


Location

  • Sonic Foundry, Inc.
  • 222 West Washington Avenue
  • Madison
  • Wisconsin
  • 53703
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SOFOOTCPK (Pink Sheets LLC)YesCommon StockUSUSDApr 1998

Biography

Sonic Foundry, Inc. provides enterprise solutions and services for the Web communications market in the United States, Europe, the Middle East, Asia, and internationally. It offers Mediasite Video Platform, an on-premises solution to publish, stream, manage, search, and analyze videos; and Mediasite Video Cloud, a Software as a Service solution, which provides hosting and management of content. The company also offers Mediasite Capture Solutions, including My Mediasite that makes a snap for instructors, employees, and students to create videos, screencasts, and slideshows from their computers or mobile devices; Mediasite RL Recorders that are a series of built-in room appliances for use in recording video and content; Mediasite RL Mini, which builds/expands an automated lecture capture programs in community colleges, vocational-tech schools, small departments, and K12 classrooms; Mediasite Catch, a video capture solution to extend video capture to various classrooms on campus; Mediasite ML Recorders, a video producer with portable recording solutions to capture and stream broadcast-quality video; and Mediasite Join that automatically records video and Web conferences. In addition, it provides Mediasite Events, which offers live and on-demand Webcasting for conferences, hybrid events, and high-profile broadcasts; Mediasite Services, such as advanced integration, installation, training, and monitoring services; and Mediasite Customer care that provides software upgrades and updates, technical support assistance, hardware warranty extension, Mediasite Recorder replacement, and access to the Mediasite Customer care Portal and Mediasite Community. The company markets its products to educational institutions, corporations, and government entities through reseller networks, direct sales, and partnerships with system integrators. Sonic Foundry, Inc. was founded in 1991 and is headquartered in Madison, Wisconsin. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/16 23:40
End of Day Share Price2020/02/14 00:00
Earnings2019/12/31
Annual Earnings2019/09/30


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.