SMSI  Smith Micro Software Inc.

Exchange

NASDAQ

Sector

Technology

Industry

Computer Software: Prepackaged Software

Market Cap.

15.87M

Vuru Grade

15.62/100

Current Price

$1.11
-0.0027 (-0.2426%)

Stability Price

$0.64
Overvalued by 42.76%

Company Metrics

  • P/E 45.23
  • P/S 0.6364
  • P/B 33.7212
  • EPS -0.9890
  • Cash ROIC -132.55%
  • Cash Ratio 0.40
  • Dividend 0 / N/A %
  • Avg. Vol. 46,000.00
  • Shares 11.95M
  • Market Cap. 15.87M

Company Description

Smith Micro Software, Inc. designs, develops, and markets software products and services primarily for the mobile computing and communications industries worldwide. The company operates in two segments, Wireless, and Productivity and Graphics segments. The Wireless segment develops mobile connectivity, mobile information management, and mobile security solutions, including QuickLink Mobile that pr... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Smith Micro Software's (SMSI) CEO Bill Smith on Q1 2017 Results - Earnings ...
Seeking Alpha - May 3, 2017
Smith Micro Software's (SMSI) CEO Bill Smith on Q1 2017 Results - Earnings Call Transcript ... Thank you for joining us today to discuss Smith Micro Software's financial results for the first quarter ended March 31, 2017. ... Please note that some of ...
Smith Micro Software's (SMSI) CEO Bill Smith on Q3 2016 Results - Earnings ...
Seeking Alpha - Oct 27, 2016
Smith Micro Software's (SMSI) CEO Bill Smith on Q3 2016 Results - Earnings Call Transcript ... Thank you for joining us today to discuss Smith Micro Software financial results for the third quarter ended September 30, 2016. ... Please note that some of ...
Smith Micro Announces $4 Million Note and Warrant Financing
PR Newswire (press release) - Sep 6, 2016
6, 2016 /PRNewswire/ -- Smith Micro Software, Inc. (NASDAQ: SMSI) today announced it has entered into agreements to issue $4.0 million of senior subordinated notes and related common stock purchase warrants.
Smith Micro Software Inc (SMSI): Is CEO Being Overpaid?
Simply Wall St - Sep 15, 2017
William Smith took the helm as Smith Micro Software Inc's (NASDAQ:SMSI) CEO in 1982 and has earned $853,914 in total compensation over the past 12 months.
Smith Micro Software, Inc. (SMSI) Rating Increased to Sell at ValuEngine - StockNewsTimes
Trading summary on Smith Micro Software, Inc. (SMSI) - Wall Street Morning
Smith Micro Software Inc (SMSI) Placed Under the Lens
Stock Press Daily - 16 hours ago
Smith Micro Software Inc (SMSI) shares have seen the Money Flow Indicator climb above 60, potentially spelling a near-term reversal if it crosses above the 70 line.
Smith Micro to Acquire Birdstep Technology
PR Newswire (press release) - Mar 8, 2016
ALISO VIEJO, Calif., March 8, 2016 /PRNewswire/ -- Smith Micro Software, Inc. (NASDAQ: SMSI) today announced that it has signed a definitive agreement to acquire Birdstep Technology's (OSO: BIRD) software development and marketing arm, based in ...
Smith Micro Software's (SMSI) CEO Bill Smith on Q4 2016 Results - Earnings ...
Seeking Alpha - Mar 10, 2017
Smith Micro Software's (SMSI) CEO Bill Smith on Q4 2016 Results - Earnings Call Transcript. Mar. ... Thank you for joining us today to discuss Smith Micro Software's financial results for the fourth quarter and year end results ended December 31, 2016 ...
Is Smith Micro Software, Inc. (NASDAQ:SMSI) Ready to Rumble?
Morgan Research - 19 hours ago
Bargain stock hunters have honed in their attention of late on shares of Smith Micro Software, Inc. (NASDAQ:SMSI). The stock is currently valued at $1.16 after moving 0.01% in the most recent session and 1.74% over the past 5 trading days.
Smith Micro Software, Inc. (NASDAQ:SMSI) Sees Light Trading Volume with 1104 ... - First News 24
Ratio & Quant Signal Update on Smith Micro Software, Inc. (NasdaqCM:SMSI) - Financial News Review
Smith Micro Adds Family Safety Platform, Global Carrier Customers with ...
PR Newswire (press release) - Jul 25, 2016
ALISO VIEJO, Calif., July 25, 2016 /PRNewswire/ -- Smith Micro Software (NASDAQ: SMSI) announced today the company has added a next-generation Family Safety mobile platform to their portfolio with the acquisition of iMobileMagic.
Smith Micro Schedules Teleconference to Discuss First Quarter 2017 Financial ...
Yahoo Finance - Apr 19, 2017
Smith Micro Software, Inc. (SMSI) today announced that it will report its first quarter 2017 financial results following the close of regular trading on Wednesday, May 3, 2017.
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for SMSI to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate SMSI's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$1.11 Current Price

$-3.25 Growth Price (DCF)

Why is this negative?


Show Free Cash Flow numbers

$0.64 Stability Price (EPV)

Overvalued by 42.76%


Discount Rate: 15.0%

$0.42 Book Price

Overvalued by 62.20%


Very Poor Cash Return on Invested Capital over the past 5 years

SMSI has failed to generate positive returns on its investments in buildings, projects and equipment. This could be due to poor management, lack of an economic moat or the capital intensive nature of the business.

SMSI has lost $132.55 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20122013201420152016
Free Cash Flow -13.13M -17.40M -7.07M -179,000.00 -12.00M
divided by
Invested Capital 13.95M 6.87M 5.50M 4.36M 6.57M
Cash ROIC -94.09% -253.43% -128.45% -4.10% -182.67%

Very Poor Return on Equity over the past 5 years

SMSI has shown an inability to deliver results for shareholders. This could be due to poor management, SMSI operating in a highly competitive industry, or having a weak business in general.

SMSI has generated a $178.16 loss for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20122013201420152016
Net Income -25.46M -27.95M -11.80M -2.60M -14.51M
divided by
Stockholders' Equity 42.66M 18.17M 14.90M 14.03M 2.50M
Return on Equity -59.69% -153.83% -79.18% -18.55% -579.55%

Poor Business Performance over the past 10 years

SMSI's inability to produce positive free cash flow for the majority of the past 10 years is concerning. It should be a red flag, since this company does not have a track record of delivering results for shareholders. This could be due to poor management or the nature of its business.

SMSI has been losing money for the majority of the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Free Cash Flow 16.03M 12.41M 13.67M 18.43M -26.98M -13.13M -17.40M -7.07M -179,000.00 -12.00M

Weak Balance Sheet

SMSI's financial position is not ideal. The key is to check whether SMSI is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Cash 87.55M 36.62M 45.86M 72.55M 45.97M 32.20M 14.84M 13.05M 12.90M 2.23M
Current Assets 104.54M 58.86M 75.60M 109.34M 64.25M 43.00M 24.29M 22.83M 21.79M 7.92M
Total Assets 162.42M 177.00M 205.93M 234.89M 79.94M 54.40M 31.54M 27.39M 24.47M 14.31M
Current Liabilities 7.91M 11.13M 16.89M 14.70M 11.53M 8.24M 9.83M 8.85M 7.21M 5.51M
Total Liabilities 7.91M 11.59M 17.96M 16.63M 15.08M 11.73M 13.37M 12.49M 10.45M 11.80M
Stockholder' Equity 154.51M 165.40M 187.98M 218.27M 64.86M 42.66M 18.17M 14.90M 14.03M 2.50M
Current Ratio 13.22 5.29 4.48 7.44 5.57 5.22 2.47 2.58 3.02 1.44
TL-to-TA 0.05 0.07 0.09 0.07 0.19 0.22 0.42 0.46 0.43 0.82

Low or No Reinvestment of Profits over the past 10 years

SMSI has either been retaining a small amount of their earnings or has done so inconsistently. A lack of consistency could be due to SMSI operating at a loss or them having such a strong economic moat they feel comfortable spending profits on growth. Be wary of future prospects and if applicable, inspect the moat's sustainability.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Retained Earnings 172,000.00 -560,000.00 4.19M 16.54M -143.07M -168.54M -196.49M -208.28M -210.89M -225.40M
Retained Earnings Growth - -425.58% 848.57% 294.51% -965.09% -17.80% -16.58% -6.01% -1.25% -6.88%

Erratic Net Profit Margins over the past 10 years

SMSI has had highly erratic net profit margins which are a great cause for concern. This company may operate in a highly volatile industry, or it may just have poor performance. Look at reasons for this inconsistency to understand if there is any reason to look past it.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income 3.16M -732,000.00 4.75M 12.35M -159.61M -25.46M -27.95M -11.80M -2.60M -14.51M
divided by
Revenue 73.38M 98.42M 107.28M 130.50M 57.77M 43.33M 42.68M 36.98M 39.51M 28.24M
Net Profit Margin 4.31% -0.74% 4.43% 9.46% -276.29% -58.77% -65.50% -31.91% -6.59% -51.40%

Varying Pricing Power over the past 10 years

SMSI has maintained substantial gross margins, suggesting that they have been able to set prices without consideration of the cost of goods sold. However, there is a substantial variation in their Gross Profit Margins from year-to-year, which indicates inconsistent performance. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$73.80 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Gross Profit 52.73M 78.32M 91.79M 114.99M 16.06M 34.88M 32.97M 27.66M 31.36M 20.67M
divided by
Revenue 73.38M 98.42M 107.28M 130.50M 57.77M 43.33M 42.68M 36.98M 39.51M 28.24M
Gross Margin 71.87% 79.57% 85.56% 88.12% 27.79% 80.50% 77.25% 74.80% 79.37% 73.21%

High Capital Intensity over the past 10 years

SMSI spends large amounts of capital buying new equipment or investing in new facilities to stay competitive. Over the long term, those costs may have to be fuelled by debt. Look at the growth of Shareholders' Equity to see if this strategy is having a positive or negative impact.

74.23% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Capital Expenditure 2.22M 4.04M 4.81M 6.31M 13.43M 322,000.00 829,000.00 216,000.00 124,000.00 500,000.00
divided by
Net Income 3.16M -732,000.00 4.75M 12.35M -159.61M -25.46M -27.95M -11.80M -2.60M -14.51M
Capital Expenditure Ratio 70.36% -551.64% 101.20% 51.13% -8.42% -1.26% -2.97% -1.83% -4.77% -3.45%

No Dividend History over the past 10 years

SMSI has never distributed dividends or has recently suspended their dividend distribution.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Dividend Paid - - - - - - - - - -
divided by
Shares Outstanding 31.00M 30.98M 32.90M 34.62M 35.62M 35.85M 36.98M 40.65M 45.95M 11.95M
Dividend Paid Per Share - - - - - - - - - -
Price at Year End 8.44 5.50 9.47 15.83 1.13 1.54 1.51 0.87 0.70 1.57
Dividend Yield - - - - - - - - - -

History of Stock Buybacks over the past 10 years

SMSI has some history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Shares Outstanding 31.00M 30.98M 32.90M 34.62M 35.62M 35.85M 36.98M 40.65M 45.95M 11.95M
Stock Bought Back - 0.06% -5.83% -4.96% -2.81% -0.65% -3.06% -9.02% -11.53% 284.45%
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