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1. Company Snapshot

1.a. Company Description

Ispire Technology Inc.manufactures e-cigarettes and cannabis vaping products.The company was founded in 2019 and is based in Los Angeles, California.


Ispire Technology Inc.operates as a subsidiary of Pride Worldwide Investment Limited

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1.b. Last Insights on ISPR

Ispire Technology Inc.'s recent performance was driven by its innovative vaping technology and precision dosing solutions. The company's fiscal year 2025 results, announced on September 16, showed significant growth. Despite a quarterly loss of $0.26 per share, which lagged revenue estimates, Ispire's commitment to product development and expansion remains strong. According to the company's earnings call transcript, management is focused on driving growth through new product launches and strategic partnerships. With a strong presence in the vaping technology market, Ispire is well-positioned for future growth.

1.c. Company Highlights

2. Ispire Technology's Strategic Shift Drives Improved Financials

Ispire Technology's first fiscal quarter 2026 earnings report revealed a revenue decline to $30.4 million from $39.3 million in the same period last year, primarily due to the company's deliberate exit from the cannabis industry. Gross profit decreased to $5.1 million from $7.7 million, with gross margins at 17% compared to 19.5% in the prior year. However, operating expenses were substantially reduced by 39% year-over-year to $7.8 million, and net loss improved to $3.3 million from $5.6 million. The company reported non-GAAP EBITDA of $600,000 for the quarter, indicating a positive trend. Actual EPS came out at '-0.06', beating estimates at '-0.1'.

Publication Date: Nov -21

📋 Highlights
  • Revenue Decline Amid Strategic Shift: Q1 revenue fell to $30.4M (-22.6% YoY) due to exiting the cannabis industry.
  • Gross Profit Decline with Improved Margins: Gross profit dropped to $5.1M (-33.8% YoY), but Q4 growth showed margin improvement to 17%.
  • Operating Expenses Reduced by 39%: Costs fell to $7.8M, driving net loss improvement to $3.3M (-41.1% YoY).
  • Positive Non-GAAP EBITDA: Generated $600K, reflecting cash flow progress despite losses.
  • Manufacturing Expansion in Malaysia: Capacity to scale from 6 to 80 production lines, supporting future revenue growth.

Operational Highlights and Future Growth

The company's IKE Tech joint venture is gaining traction, with its blockchain-based age verification technology being adopted in various regions. Ispire is also in discussions with large and medium-sized nicotine companies regarding its proprietary G-Mesh technology solutions. The build-out of the company's manufacturing facility in Malaysia is progressing well, with plans to increase production capacity from 6 lines to 80 lines. Ispire expects its ODM partnerships to contribute substantially to revenue growth in future quarters, with analysts estimating next year's revenue growth at 7.7%.

Valuation and Pricing

With a P/S Ratio of 0.74 and an EV/EBITDA of -3.86, the market seems to have priced in the challenges faced by the company. The stock's P/B Ratio stands at 7.17, indicating a premium valuation. However, considering the company's improved cash flow and reduced operating expenses, the current valuation may be justified. The company's ROE and ROIC are negative, at -107.0% and -124.56% respectively, but this is expected to improve as the company continues to focus on quality revenue, improving gross margin, and controlling costs.

Outlook and Risks

Ispire is cautious about re-entering the cannabis industry due to cash flow challenges and regulatory uncertainty. However, the company will reconsider its strategy if there are significant changes at the federal level. The company's supply chain strategy may also be impacted by geopolitical conflicts between the U.S. and China. Nevertheless, Ispire is confident that its technology, including the G-Mesh and IKE Tech, will drive growth and profitability. With improved cash flow, P&L, and gross margin, the company expects this trend to continue throughout fiscal 2026.

3. NewsRoom

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New Strong Sell Stocks for February 19th

Feb -19

Source: zacks.com

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Ispire Technology Inc. (ISPR) Q2 2026 Earnings Call Transcript

Feb -06

Source: seekingalpha.com

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Ispire Technology Inc. (ISPR) Reports Q2 Loss, Lags Revenue Estimates

Feb -06

Source: zacks.com

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Ispire Technology Inc. Reports Financial Results for Fiscal Second Quarter 2026

Feb -06

Source: prnewswire.com

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Ispire-Backed IKE Tech Invited to Participate in FDA Roundtable on PMTA Submissions

Feb -04

Source: prnewswire.com

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Ispire Technology Inc. Schedules Fiscal Second Quarter 2026 Earnings Conference Call

Feb -03

Source: prnewswire.com

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Ispire Technology (NASDAQ:ISPR) Trading Up 1.2% – What’s Next?

Jan -13

Source: defenseworld.net

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Head to Head Survey: Vapor Group (OTCMKTS:VPOR) vs. Ispire Technology (NASDAQ:ISPR)

Jan -06

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (16.57%)

6. Segments

Tobacco Vaping

Expected Growth: 12.4%

Growing demand for smoke-free alternatives, increasing awareness of tobacco-related health risks, and innovative technology driving adoption of Tobacco Vaping devices.

Cannabis Vaping

Expected Growth: 24.5%

Growing demand for cannabis vaping products, increasing adoption of portable vaporizers, and rising popularity of cannabis concentrates and oils drive the market growth.

7. Detailed Products

CloudConnect

A cloud-based platform that enables secure and reliable connectivity for IoT devices, providing real-time data monitoring and analytics.

DeviceHQ

A device management platform that provides remote monitoring, configuration, and firmware updates for IoT devices.

IoT Security Suite

A comprehensive security solution that provides threat detection, vulnerability assessment, and incident response for IoT devices.

DataSphere

A data analytics platform that provides real-time insights and predictive analytics for IoT devices and sensors.

EdgeInsights

An edge computing platform that provides real-time data processing, analytics, and AI-driven insights for IoT devices.

8. Ispire Technology Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Ispire Technology Inc. faces moderate threat from substitutes, as customers have limited alternatives for its technology services.

Bargaining Power Of Customers

Ispire Technology Inc. has a large customer base, but customers have significant bargaining power due to the availability of alternative service providers.

Bargaining Power Of Suppliers

Ispire Technology Inc. has a diverse supplier base, reducing the bargaining power of individual suppliers.

Threat Of New Entrants

Ispire Technology Inc. operates in a moderately competitive industry, with new entrants facing significant barriers to entry.

Intensity Of Rivalry

Ispire Technology Inc. operates in a highly competitive industry, with intense rivalry among existing players.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 12.06%
Debt Cost 3.95%
Equity Weight 87.94%
Equity Cost 17.08%
WACC 15.50%
Leverage 13.71%

11. Quality Control: Ispire Technology Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Universal

A-Score: 7.0/10

Value: 8.2

Growth: 5.9

Quality: 4.2

Yield: 10.0

Momentum: 5.0

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
Vector

A-Score: 5.4/10

Value: 7.3

Growth: 5.3

Quality: 6.0

Yield: 5.0

Momentum: 6.0

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
Turning Point Brands

A-Score: 4.8/10

Value: 1.2

Growth: 5.6

Quality: 6.9

Yield: 0.0

Momentum: 10.0

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
Kaival Brands

A-Score: 3.8/10

Value: 9.2

Growth: 4.0

Quality: 4.8

Yield: 0.0

Momentum: 5.0

Volatility: 0.0

1-Year Total Return ->

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Stock-Card
Ispire Technology

A-Score: 2.6/10

Value: 7.4

Growth: 2.6

Quality: 3.6

Yield: 0.0

Momentum: 1.5

Volatility: 0.7

1-Year Total Return ->

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Stock-Card
S&W Seed

A-Score: 2.5/10

Value: 10.0

Growth: 2.0

Quality: 2.2

Yield: 0.0

Momentum: 0.5

Volatility: 0.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

2.45$

Current Price

2.45$

Potential

-0.00%

Expected Cash-Flows