Company Overview
Wrap Technologies, Inc. operates as a public safety technology and services company dedicated to developing specialized policing solutions for law enforcement agencies and security personnel across the United States, Europe, the Middle East, Africa, Asia Pacific, and international markets. The company functions within the broader Technology sector, specifically categorized under the Scientific & Technical Instruments industry, which implies a focus on developing hardware and software tools that facilitate critical public safety operations and remote restraint capabilities. In terms of market scale, the company holds a market capitalization of $83.25M and generates annual revenue of $4.13M while employing a workforce of 19 individuals. These valuation and revenue figures indicate that Wrap Technologies is a small-cap entity with a niche presence in the global security equipment market, suggesting its operations are currently concentrated in specific product lines rather than diversified, large-scale manufacturing.
Financial Health
The company reported a trailing twelve-month revenue of $4.13M, yet this generated a net income of -$14,681,000 and an EBITDA of -$11,907,000, revealing a significant gap between top-line sales and bottom-line profitability that points to substantial operating expenses or one-time costs. The generation of negative free cash flow at -$12,289,375 indicates that the company is currently burning cash rather than generating liquidity, which limits its financial flexibility for capital expenditures or unexpected market shifts. Margin analysis shows a gross margin of 57.5%, which suggests a healthy pricing power or high-efficiency manufacturing for its core products, while the operating margin of -185.2% and profit margin of 0.0% demonstrate severe inefficiencies in converting revenue into operating profit. The balance sheet contains $5.96M in cash against $2.49M in debt, resulting in a debt-to-equity ratio of 17.63, which presents a complex picture where low absolute debt is offset by a high leverage ratio relative to equity. Despite the high debt-to-equity figure, the current ratio stands at 7.12, indicating a robust short-term liquidity position where current assets significantly exceed current liabilities. Return on Equity is reported at -136.3% and Return on Assets at -42.3%, metrics that reveal management is currently destroying shareholder value and utilizing assets to generate losses rather than returns.
Valuation Assessment
Valuation metrics for the company include a trailing P/E ratio that is effectively N/A due to losses, alongside a forward P/E of -6.25, a combination that implies the market is pricing in an expectation of future earnings recovery or sustained loss reduction over the coming period. The price-to-book ratio is calculated at 5.47, indicating that the market is valuing the company at a significant premium of over five times its book value, which often suggests high growth expectations or a specific intangible asset valuation despite current losses. Alternative valuation measures include a price-to-sales ratio of 20.14 and an EV/EBITDA of -6.03, figures that suggest the stock is priced heavily relative to its revenue stream and earnings power. The stock has traded within a 52-week range with a high of $3.23 and a low of $1.20, meaning the current price sits fluctuating within this band but historically closer to the lower end given the negative earnings environment. The stock exhibits a beta of 1.51, which signifies that its price volatility is 51% higher than the broader market, reflecting the inherent risk associated with small-cap technology stocks in the public safety sector.
Growth & Income
Wrap Technologies has demonstrated aggressive expansion with a revenue growth rate of 151.4% year-over-year, whereas earnings growth is listed as N/A due to the company's continued net losses, implying that top-line expansion has not yet translated into profitability. As a non-dividend payer, the company reports a dividend yield of N/A and a payout ratio of 0.0%, confirming that management retains all earnings to reinvest into product development, market expansion, or operational restructuring rather than distributing cash to shareholders. This reinvestment strategy is consistent with growth-stage companies that prioritize scaling revenue over providing immediate income to investors. The overall growth and income profile presents a high-risk, high-reward scenario characterized by rapid revenue expansion but an absence of current income generation or profitability.