SMSI  Smith Micro Software Inc.

Exchange

NASDAQ

Sector

Technology

Industry

Computer Software: Prepackaged Software

Market Cap.

16.76M

Vuru Grade

27.93/100

Current Price

$1.36
+0.01 (+0.74%)

Growth Price

$0.28
Overvalued by 79.40%

Stability Price

$0.49
Overvalued by 64.01%

Company Metrics

  • P/E 45.23
  • P/S 0.53
  • P/B 3.08
  • EPS -1.04
  • Cash ROIC -120.06%
  • Cash Ratio 1.79
  • Dividend 0 / N/A %
  • Avg. Vol. 65,105.00
  • Shares 45.95M
  • Market Cap. 16.76M

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 Schedules Teleconference to Discuss Fourth Quarter and Full-Year ...
PR Newswire (press release) - Feb 23, 2017
23, 2017 /PRNewswire/ -- Smith Micro Software (NASDAQ: SMSI) today announced that it will report its fourth quarter and full-year 2016 financial results following the close of regular trading on Thursday, March 9, 2017.
Smith Micro Software, Inc. (SMSI) Receives An Update From Brokers - The De Soto Edge
Smith Micro Software, Inc. (NASDAQ:SMSI) Files An 8-K Departure of Directors ...
Market Exclusive - Feb 23, 2017
On February 3, 2017, Rick Carpenter resigned as Senior Vice President of Engineering of Smith Micro Software, Inc. (the “Company”).
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 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.
Why Smith Micro Software (SMSI) Stock Plummeted to a One-Year Low Today
TheStreet.com - May 9, 2014
... this year's decline was more strongly felt since, as expected, the 19% customer in Q4 did not contribute any revenue to Q1," said CEO William Smith in a statement. "While we were hopeful that we could achieve profitability based on our previous ...
Smith Micro Software, Inc. (NASDAQ:SMSI) Takes Beating Following Wider Loss ... - WallStreetPR
Smith Micro Software, Inc. (NASDAQ:SMSI) Registers a Net Consolidated EPS Of ...
Equities Focus - 6 hours ago
Smith Micro Software, Inc. (NASDAQ:SMSI) received diluted EPS of from the parent company amounting to $-0.2265 for the year ended on 2015-12-31.
Smith Micro Software's (SMSI) CEO Bill Smith on Q3 2016 Results - Earnings ...
Seeking Alpha - Oct 27, 2016
Good day and welcome to the Smith Micro Software Third Quarter 2016 Earnings Conference Call. ... 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 ...
Smith Micro Software (SMSI) Plans 1-for-4 Reverse Stock Split
StreetInsider.com - Aug 16, 2016
Smith Micro Software, Inc. (NASDAQ: SMSI) today announced that its Board of Directors has approved a 1-for-4 reverse split of its common stock.
Zacks: Smith Micro Software, Inc. (SMSI) Receives Average Rating of “Strong ...
BNB Daily (blog) - Feb 9, 2017
Smith Micro Software, Inc. (NASDAQ:SMSI) has been assigned a consensus broker rating score of 1.00 (Strong Buy) from the one analysts that provide coverage for the stock, Zacks Investment Research reports.
Smith Micro Completes Acquisition of Birdstep Technology
PR Newswire (press release) - Apr 7, 2016
ALISO VIEJO, Calif., April 7, 2016 /PRNewswire/ -- Smith Micro Software, Inc. (NASDAQ: SMSI) today announced that it has completed its acquisition of Birdstep Technology AB, the software development and marketing arm of Birdstep Technology ASA (OSO: ...
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.

$1.36 Current Price

$0.28 Growth Price (DCF)

Overvalued by 79.40%


Growth Rate Assumed by Market: 500.00%


Future Free Cash Flow Growth Rate: 0.0%


Discount Rate: 15.0%


SMSI's most recent year of (normalized) free cash flow is negative. This is the base number for forward projections. This means that if you increase the growth rate, the amount of negative FCF grows, thereby decreasing the price.

Show Free Cash Flow numbers

$0.49 Stability Price (EPV)

Overvalued by 64.01%


Discount Rate: 15.0%

$0.25 NCA Price

Overvalued by 81.85%

$0.61 Book Price

Overvalued by 55.21%


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 $120.06 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20112012201320142015
Free Cash Flow -26.98M -13.13M -17.40M -7.07M -179,000.00
divided by
Invested Capital 22.44M 13.95M 6.87M 5.50M 4.36M
Cash ROIC -120.20% -94.09% -253.43% -128.45% -4.10%

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 $111.46 loss for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20112012201320142015
Net Income -159.61M -25.46M -27.95M -11.80M -2.60M
divided by
Stockholders' Equity 64.86M 42.66M 18.17M 14.90M 14.03M
Return on Equity -246.08% -59.69% -153.83% -79.18% -18.55%

Mediocre Business Performance over the past 10 years

SMSI isn't a strong business and might be consistently attempting to fuel growth with debt or has trouble staying profitable. The lack of predictability in free cash flow should be concerning for the reliability of future earnings.

SMSI has been unable to consistently create value for shareholders.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Free Cash Flow 14.39M 16.03M 12.41M 13.67M 18.43M -26.98M -13.13M -17.40M -7.07M -179,000.00

Very Strong Balance Sheet

SMSI has more Cash than its Total Liabilities, resulting in $0.05 Net Cash per share. In other words, if you buy SMSI today, the price you're paying for shares is actually $1.31 because $0.05 of Cash is included in the current share price. This much Cash is very healthy. It can help SMSI sustain itself in the face of any economic turmoil and makes a stock buyback more of a possibility.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Cash 92.56M 87.55M 36.62M 45.86M 72.55M 45.97M 32.20M 14.84M 13.05M 12.90M
Current Assets 103.77M 104.54M 58.86M 75.60M 109.34M 64.25M 43.00M 24.29M 22.83M 21.79M
Total Assets 131.03M 162.42M 177.00M 205.93M 234.89M 79.94M 54.40M 31.54M 27.39M 24.47M
Current Liabilities 4.97M 7.91M 11.13M 16.89M 14.70M 11.53M 8.24M 9.83M 8.85M 7.21M
Total Liabilities 4.97M 7.91M 11.59M 17.96M 16.63M 15.08M 11.73M 13.37M 12.49M 10.45M
Stockholder' Equity 126.06M 154.51M 165.40M 187.98M 218.27M 64.86M 42.66M 18.17M 14.90M 14.03M
Current Ratio 20.88 13.22 5.29 4.48 7.44 5.57 5.22 2.47 2.58 3.02
TL-to-TA 0.04 0.05 0.07 0.09 0.07 0.19 0.22 0.42 0.46 0.43

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
2006200720082009201020112012201320142015
Retained Earnings -2.99M 172,000.00 -560,000.00 4.19M 16.54M -143.07M -168.54M -196.49M -208.28M -210.89M
Retained Earnings Growth - 105.75% -425.58% 848.57% 294.51% -965.09% -17.80% -16.58% -6.01% -1.25%

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
2006200720082009201020112012201320142015
Net Income 8.96M 3.16M -732,000.00 4.75M 12.35M -159.61M -25.46M -27.95M -11.80M -2.60M
divided by
Revenue 54.47M 73.38M 98.42M 107.28M 130.50M 57.77M 43.33M 42.68M 36.98M 39.51M
Net Profit Margin 16.44% 4.31% -0.74% 4.43% 9.46% -276.29% -58.77% -65.50% -31.91% -6.59%

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.

$72.76 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
2006200720082009201020112012201320142015
Gross Profit 34.21M 52.73M 78.32M 91.79M 114.99M 16.06M 34.88M 32.97M 27.66M 31.36M
divided by
Revenue 54.47M 73.38M 98.42M 107.28M 130.50M 57.77M 43.33M 42.68M 36.98M 39.51M
Gross Margin 62.81% 71.87% 79.57% 85.56% 88.12% 27.79% 80.50% 77.25% 74.80% 79.37%

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.

56.68% 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
2006200720082009201020112012201320142015
Capital Expenditure 362,000.00 2.22M 4.04M 4.81M 6.31M 13.43M 322,000.00 829,000.00 216,000.00 124,000.00
divided by
Net Income 8.96M 3.16M -732,000.00 4.75M 12.35M -159.61M -25.46M -27.95M -11.80M -2.60M
Capital Expenditure Ratio 4.04% 70.36% -551.64% 101.20% 51.13% -8.42% -1.26% -2.97% -1.83% -4.77%

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
2006200720082009201020112012201320142015
Dividend Paid - - - - - - - - - -
divided by
Shares Outstanding 25.33M 31.00M 30.98M 32.90M 34.62M 35.62M 35.85M 36.98M 40.65M 45.95M
Dividend Paid Per Share - - - - - - - - - -
Price at Year End 14.19 8.44 5.50 9.47 15.83 1.13 1.54 1.51 0.87 0.70
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
2006200720082009201020112012201320142015
Shares Outstanding 25.33M 31.00M 30.98M 32.90M 34.62M 35.62M 35.85M 36.98M 40.65M 45.95M
Stock Bought Back - -18.29% 0.06% -5.83% -4.96% -2.81% -0.65% -3.06% -9.02% -11.53%
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