Neonode (NasdaqCM:NEON) - Share price, News & Analysis

Q: What is the Fair Price of NEON when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

NEON ($5.2) is trading below our estimate of [[fair value]] ($56.77)

NEON fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	5/6
Past Performance	0/6
Financial Health	5/6
Dividends	0/6

NEON Stock Overview

Rewards

Trading at 90.8% below our estimate of its fair value

Earnings are forecast to grow 105.39% per year

Risk Analysis

Volatile share price over the past 3 months

Shareholders have been diluted in the past year

Does not have a meaningful market cap ($71M)

Neonode Competitors

RF Industries

NasdaqGM:RFIL

US$62.5m

Deswell Industries

NasdaqGM:DSWL

US$49.2m

Key Tronic

NasdaqGM:KTCC

US$49.1m

SigmaTron International

NasdaqCM:SGMA

US$37.7m

Price History & Performance

Summary of all time highs, changes and price drops for Neonode
Historical stock prices
Current Share Price	US$5.20
52 Week High	US$12.42
52 Week Low	US$3.70
Beta	2.34
1 Month Change	-25.40%
3 Month Change	-15.58%
1 Year Change	-14.89%
3 Year Change	100.00%
5 Year Change	-51.85%
Change since IPO	-99.58%

Recent News & Updates

May 06

Here's Why We're Not Too Worried About Neonode's (NASDAQ:NEON) Cash Burn Situation

Even when a business is losing money, it's possible for shareholders to make money if they buy a good business at the...

Shareholder Returns

	NEON	US Electronic	US Market
7D	-7.0%	0.8%	1.7%
1Y	-14.9%	-22.3%	-20.4%

Return vs Industry: NEON exceeded the US Electronic industry which returned -19.8% over the past year.

Return vs Market: NEON exceeded the US Market which returned -18.8% over the past year.

Price Volatility

Is NEON's price volatile compared to industry and market?
NEON volatility
NEON Average Weekly Movement	16.3%
Electronic Industry Average Movement	7.3%
Market Average Movement	8.0%
10% most volatile stocks in US Market	16.8%
10% least volatile stocks in US Market	3.2%

Stable Share Price: NEON is more volatile than 75% of US stocks over the past 3 months, typically moving +/- 16% a week.

Volatility Over Time: NEON's weekly volatility (16%) has been stable over the past year, but is still higher than 75% of US stocks.

About the Company

Founded	Employees	CEO	Website
1997	46	Urban Forssell	https://www.neonode.com

Neonode Inc., together with its subsidiaries, develops optical sensing solutions for contactless touch, touch, and gesture sensing in the United States, Japan, South Korea, China, and internationally. It also offers software solutions for scene analysis using advanced machine learning algorithms to detect and track persons and objects in video streams for cameras and other types of imagers. In addition, the company licenses its technology to original equipment manufacturers (OEMs) and Tier 1 suppliers.

Neonode Fundamentals Summary

How do Neonode's earnings and revenue compare to its market cap?
NEON fundamental statistics
Market Cap	US$70.59m
Earnings (TTM)	-US$6.26m
Revenue (TTM)	US$5.49m

12.9x

P/S Ratio

-11.3x

P/E Ratio

Is NEON overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
NEON income statement (TTM)
Revenue	US$5.49m
Cost of Revenue	US$738.00k
Gross Profit	US$4.75m
Other Expenses	US$11.01m
Earnings	-US$6.26m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Aug 11, 2022

Earnings per share (EPS)	-0.46
Gross Margin	86.55%
Net Profit Margin	-114.08%
Debt/Equity Ratio	0%

How did NEON perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

Is NEON undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

Price-To-Sales vs Peers
Price-To-Sales vs Industry
Price-To-Sales vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for NEON?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for NEON. This is calculated by dividing NEON's market cap by their current preferred multiple.
What is NEON's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$70.59m

NEON key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	9.5x
Enterprise Value/EBITDA	-8.1x
PEG Ratio	n/a

Price to Sales Ratio vs Peers

How does NEON's PS Ratio compare to its peers?

NEON PS Ratio vs Peers

The above table shows the PS ratio for NEON vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PS	Estimated Growth	Market Cap
Peer Average	0.4x
RFIL RF Industries	0.8x	9.8%	US$62.5m
DSWL Deswell Industries	0.6x	n/a	US$49.2m
KTCC Key Tronic	0.09x	n/a	US$49.1m
SGMA SigmaTron International	0.1x	n/a	US$37.7m
NEON Neonode	12.9x	37.2%	US$70.6m

Forward PS

Price-To-Sales vs Peers: NEON is expensive based on its Price-To-Sales Ratio (12.9x) compared to the peer average (0.4x).

Price to Earnings Ratio vs Industry

How does NEON's PE Ratio compare vs other companies in the US Electronic Industry?

Price-To-Sales vs Industry: NEON is expensive based on its Price-To-Sales Ratio (12.9x) compared to the US Electronic industry average (1.9x)

Price to Sales Ratio vs Fair Ratio

What is NEON's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

NEON PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio	12.9x
Fair PS Ratio	15.6x

Price-To-Sales vs Fair Ratio: NEON is good value based on its Price-To-Sales Ratio (12.9x) compared to the estimated Fair Price-To-Sales Ratio (15.6x).

Share Price vs Fair Value

What is the Fair Price of NEON when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: NEON ($5.2) is trading below our estimate of fair value ($56.77)

Significantly Below Fair Value: NEON is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

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

Discover undervalued companies

Future Growth

How is Neonode forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

Future Growth Score

5/6

Future Growth Score 5/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

105.4%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: NEON is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.9%).

Earnings vs Market: NEON is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: NEON is expected to become profitable in the next 3 years.

Revenue vs Market: NEON's revenue (37.2% per year) is forecast to grow faster than the US market (8.3% per year).

High Growth Revenue: NEON's revenue (37.2% per year) is forecast to grow faster than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: NEON's Return on Equity is forecast to be low in 3 years time (7.3%).

Discover growth companies

Past Performance

How has Neonode performed over the past 5 years?

Past Performance Score

0/6

Past Performance Score 0/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-11.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: NEON is currently unprofitable.

Growing Profit Margin: NEON is currently unprofitable.

Past Earnings Growth Analysis

Earnings Trend: NEON is unprofitable, and losses have increased over the past 5 years at a rate of 11.4% per year.

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

Earnings vs Industry: NEON is unprofitable, making it difficult to compare its past year earnings growth to the Electronic industry (33%).

Return on Equity

High ROE: NEON has a negative Return on Equity (-38.08%), as it is currently unprofitable.

Discover strong past performing companies

Financial Health

How is Neonode's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Stable Cash Runway
Forecast Cash Runway

Financial Position Analysis

Short Term Liabilities: NEON's short term assets ($20.5M) exceed its short term liabilities ($2.6M).

Long Term Liabilities: NEON's short term assets ($20.5M) exceed its long term liabilities ($196.0K).

Debt to Equity History and Analysis

Debt Level: NEON is debt free.

Reducing Debt: NEON has no debt compared to 5 years ago when its debt to equity ratio was 0.6%.

Balance Sheet

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: NEON has sufficient cash runway for more than a year based on its current free cash flow.

Forecast Cash Runway: Insufficient data to determine if NEON has enough cash runway if its free cash flow continues to grow or shrink based on historical rates.

Discover healthy companies

Dividend

What is Neonode current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

Dividend Yield vs Market

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

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

Stability and Growth of Payments

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

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

Earnings Payout to Shareholders

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

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as NEON has not reported any payouts.

Discover strong dividend paying companies

Management

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

1.1yrs

Average management tenure

CEO

Urban Forssell (51 yo)

2.42yrs

Tenure

US$405,938

Compensation

Mr. Urban Forssell has been President and Chief Executive Officer of Neonode Inc. since January 1, 2020. He has served since 2013 as a Vice President and between 2011 and 2013 as a General Manager at Öhlin...

CEO Compensation Analysis

Compensation vs Market: Urban's total compensation ($USD405.94K) is below average for companies of similar size in the US market ($USD752.76K).

Compensation vs Earnings: Urban's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: NEON's management team is not considered experienced ( 1.1 years average tenure), which suggests a new team.

Board Members

Experienced Board: NEON's board of directors are considered experienced (3.9 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 18%.

Data	Last Updated (UTC time)
Company Analysis	2022/06/28 00:00
End of Day Share Price	2022/06/28 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31