Investment Thesis
Data I/O operates with severe structural profitability challenges, posting negative operating margins of -23.8% and net losses of $5.2M on $21.5M revenue. With negative free cash flow of -2.8M and only $5.2M cash on hand, the company faces critical cash runway constraints within 18-24 months without operational turnaround or capital injection.
Strengths
- Strong gross margin of 49.3% indicates viable core product economics
- Zero long-term debt eliminates bankruptcy risk from leverage
- Adequate current liquidity ratio of 3.46x provides near-term operational buffer
Risks
- Negative operating cash flow of -2.2M indicates business is not self-sustaining
- Revenue decline of -1.2% YoY signals weakening market demand
- Negative ROE (-38.7%) and ROA (-26.0%) demonstrate value destruction for shareholders
- Elevated operating expenses far exceed gross profit despite reasonable margin
- Cash depletion risk at current burn rate within 18-24 months
Key Metrics to Watch
- Operating cash flow trend and path to breakeven
- Revenue stabilization and growth recovery
- Operating expense reduction initiatives and cost structure analysis
- Cash burn rate and runway until funding need
Financial Metrics
Revenue
21.5M
Net Income
-5.2M
EPS (Diluted)
$-0.56
Free Cash Flow
-2.8M
Total Assets
20.2M
Cash
5.2M
Profitability Ratios
Gross Margin
49.3%
Operating Margin
-23.8%
Net Margin
-24.4%
ROE
-38.7%
ROA
-26.0%
FCF Margin
-13.0%
Balance Sheet & Liquidity
Current Ratio
3.46x
Quick Ratio
2.32x
Debt/Equity
0.00x
Debt/Assets
0.0%
Interest Coverage
N/A
Long-term Debt
N/A
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-04-29T14:44:26.010156 |
Data as of: 2025-12-31 |
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