SPAR Group, Inc. (SGRP) - Comprehensive Stock Analysis & Investment Research
Deep dive into SPAR Group, Inc.'s business profile, financial performance, AI predictions, and competitive positioning to make informed investment decisions.
SPAR Group, Inc. Investment Summary
When evaluating whether SPAR Group, Inc. (SGRP) represents a compelling investment opportunity, investors must consider multiple factors including the company's financial health, market position, growth prospects, and what our AI-powered predictive models suggest about its near-term price trajectory.
Company Profile
SPAR Group, Inc. (SGRP) operates within the Trade & Services sector, specifically in the Services-Business Services, NEC industry. The company employs approximately 1,896 people. With a market capitalization of $18 million, the company is a small-cap stock that may offer higher growth potential but also carries higher volatility.
Financial Performance Analysis
SPAR Group, Inc. generates annual revenues of approximately $256 million. The company operates with a net margin of 4.9%, showing modest profitability.
From a profitability standpoint, the company has a Return on Equity (ROE) of -8.4%, suggesting room for improvement in capital efficiency. The Return on Assets (ROA) stands at -2.1%, suggesting potential for operational improvement. The gross margin of 20.2% suggests a competitive or commodity-driven business model.
Balance Sheet Strength
Examining the balance sheet health, the current ratio of 1.45x indicates the company can meet its short-term obligations, though with limited buffer. The debt-to-equity ratio of 0.06x reflects a conservative capital structure with low leverage.
Cash Flow Generation
SPAR Group, Inc. currently reports negative free cash flow of $-5 million, which may reflect heavy investment in growth or operational challenges. Operating cash flow stands at $-3 million, indicating the company is consuming cash in its operations. Year-over-year operating cash flow has changed by 43.2%, showing strong cash flow momentum.
Valuation Analysis
The P/E ratio of 3.9x suggests the stock may be undervalued relative to its earnings, potentially offering value for investors. However, low P/E ratios can also reflect market concerns about future growth prospects. The price-to-book ratio stands at 1.10x, suggesting the stock trades at a modest premium to book value.
AI-Powered Price Predictions
Our AI models continuously analyze SPAR Group, Inc. to identify potential price movements. Subscribe to Intratio Premium to unlock detailed AI-powered price predictions for 7, 30, and 90-day horizons.
Investment Considerations
When determining whether SPAR Group, Inc. is a suitable investment, consider your investment objectives, risk tolerance, and time horizon. As a small-cap stock, SPAR Group, Inc. may offer higher growth potential but also carries elevated volatility and risk.
This analysis is generated automatically using our proprietary AI systems and should not be considered personalized investment advice. Past performance does not guarantee future results. Always conduct your own research and consider consulting a financial advisor before making investment decisions.
Corporate Identity
SPAR Group, Inc. (Stock Symbol: SGRP) is a prominent company operating within the Trade & Services sector, with a specific focus on the Services-Business Services, NEC industry. The company's shares are publicly traded on the Nasdaq exchange.
Leadership & Workforce
The organization employs approximately 1,896 professionals, indicating a well-established company with meaningful operational scale and the human resources necessary to compete effectively in its markets.
Market Classification
With a market capitalization of $18 million, SPAR Group, Inc. is classified as a small-cap stock. Small-cap companies often represent emerging businesses with substantial growth potential. While these investments typically carry higher volatility, they can offer significant upside for investors willing to accept greater risk.
Sector & Industry Context
Operating within the Trade & Services sector, SPAR Group, Inc. is subject to the unique dynamics, opportunities, and challenges that characterize this segment of the economy.
Revenue & Growth Analysis
SPAR Group, Inc. generates annual revenues of $256 million , representing an emerging company in its growth phase. While smaller in scale, such companies often offer higher growth potential as they capture market share and expand their operations.
Profitability Analysis
The company achieves a 4.9% net profit margin, reflecting thin profitability that may be characteristic of the industry or indicative of competitive pressures. Companies operating at these margins have limited buffer against economic downturns or cost increases.
Gross profit margin stands at 20.2%, a moderate margin common in manufacturing, retail, or distribution-heavy businesses where competition or cost structures limit pricing flexibility.
Operating margin is 7.7%, indicating moderate operational leverage where fixed costs consume a significant portion of gross profits.
Market Valuation
Current market capitalization stands at $18 million . This small-cap classification typically represents higher-growth, higher-risk opportunities. Small-cap stocks can be more volatile but may offer substantial returns if the company successfully executes its growth strategy.
Return on Investment Metrics
Return on Equity (ROE) measures -8.4%, indicating negative shareholder returns, typically resulting from operating losses or exceptional write-downs.
Return on Assets (ROA) stands at -2.1%, indicating lower asset efficiency that may reflect industry norms or opportunities for operational improvement.
Return on Invested Capital (ROIC) measures -4.0%, which may indicate returns below the cost of capital, potentially destroying shareholder value over time if sustained.
Cash Flow Generation
Free cash flow of $-5 million indicates the company is currently consuming more cash than it generates, which may reflect heavy growth investments, working capital needs, or operational challenges.
Operating cash flow reaches $-3 million , with year-over-year growth of 43.2%. Operating cash flow represents the cash generated from core business operations before capital investments, providing insight into the sustainability of the company's business model.
Strategic Market Position
SPAR Group, Inc. strategically competes in the highly dynamic Services-Business Services, NEC marketplace. As a small-cap company, it represents an emerging market participant with potentially significant growth opportunities. Small-caps often offer greater growth potential as they capture market share and scale their operations, though this comes with higher risk and volatility. Success at this stage can lead to substantial returns for early investors who identify winning business models.
Industry Competitive Landscape
SPAR Group, Inc. competes within the Trade & Services sector, navigating the competitive dynamics and market forces specific to this industry. The company's competitive position depends on its ability to differentiate through product quality, cost efficiency, customer relationships, or other strategic advantages relevant to its specific market segment.
Operational Efficiency
The company currently shows negative free cash flow of $-5 million , with year-over-year cash flow growth of 43.2%. Negative free cash flow may reflect heavy investment in growth, working capital needs, or operational challenges. This is common for high-growth companies investing aggressively but warrants attention for mature businesses.
Margin & Pricing Power Analysis
The company maintains a 20.2% gross margin characteristic of commodity-like businesses or high-volume, low-margin operators. Thin gross margins require exceptional operational efficiency and volume to generate meaningful profits. Companies at this margin level are particularly sensitive to cost increases or pricing pressures.
Operating margin of 7.7% demonstrates how efficiently the company converts revenues into operating profits after accounting for all operating expenses including research and development, sales and marketing, and general administrative costs. Operating margin compression relative to gross margin suggests high operating expenses that may warrant efficiency improvements or reflect necessary growth investments.
Asset Utilization Efficiency
Asset turnover ratio of 2.66x indicates exceptional efficiency in utilizing company assets to generate revenue. High asset turnover is characteristic of retail, distribution, or service businesses that operate with relatively lean asset bases. This efficiency translates to higher returns on invested capital when combined with reasonable margins.
Financial Strength & Leverage
Current ratio of 1.45 indicates adequate liquidity to meet short-term obligations with reasonable cushion. This level balances working capital efficiency with financial safety.