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1. Company Snapshot

1.a. Company Description

Star Equity Holdings, Inc.provides healthcare solutions in the United States and internationally.It operates through four segments: Diagnostic Services, Diagnostic Imaging, Construction, and Investments.


It offers imaging services primarily to cardiologists, internal medicine physicians, and family practice doctors; and imaging systems, including nuclear cardiac and general purpose nuclear imaging systems to physician offices and hospitals.The company also develops, sells, and maintains solid-state gamma cameras; and provides camera maintenance contract services.In addition, it manufactures modular housing units, structural wall panels, permanent wood foundation systems, and other engineered wood products; supplies general contractors with building materials; holds real estate assets; and manages investments.


The company was formerly known as Digirad Corporation and changed its name to Star Equity Holdings, Inc.in December 2020.Star Equity Holdings, Inc.


was founded in 1985 and is headquartered in Old Greenwich, Connecticut.

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1.b. Last Insights on STRR

The recent 3-month performance of Star Equity Holdings, Inc. was negatively impacted by the acquisition of Alliance Drilling Tools, which may have led to integration challenges and potential disruptions to the company's operations. Additionally, the acquisition of ADT may have resulted in increased expenses and capital expenditures, which could have weighed on the company's profitability. Furthermore, the company's recent earnings release highlighted a decline in gross profit margin, which may be attributed to the ADT acquisition and potential inefficiencies in the energy services division.

1.c. Company Highlights

2. Star Equity Holdings' Q3 2025 Earnings: A Mixed Bag

Star Equity Holdings reported a 30% increase in revenue to $48 million in Q3 2025, driven by the merger with Star Operating Companies. However, adjusted EBITDA growth was more muted, rising to $1.3 million from $800,000 in the same quarter last year. Gross profit increased by 11%. The company's EPS was $0.02, significantly lower than the estimated $0.32. The revenue growth was largely driven by the Building Solutions segment, which saw a significant increase in revenue on a pro forma basis.

Publication Date: Nov -19

📋 Highlights
  • Revenue Growth:: Total revenue increased by 30% to $48 million in Q3 2025 compared to the same quarter in 2024.
  • Adjusted EBITDA Improvement:: Company-wide adjusted EBITDA rose to $1.3 million from $800,000 year-over-year.
  • Building Solutions Performance:: Pro forma revenue surged to $21.4 million in Q3 2025 (up from $13.7 million in 2024), with adjusted EBITDA reaching $2.6 million.
  • Share Repurchase Program:: The company repurchased 8% of outstanding shares and authorized a $3 million new repurchase program.
  • Merger Synergy Target:: $2 million in synergies from the Star Operating Companies merger is expected to be fully realized within 6 months.

Segment Performance

The Business Services segment, led by Hudson Talent Solutions, demonstrated solid performance with revenue of $37 million, slightly up from $36.9 million in the same period last year. The Building Solutions segment saw a significant increase in revenue to $21.4 million on a pro forma basis, up from $13.7 million in Q3 2024. Adjusted EBITDA for this segment grew substantially to $2.6 million. As Jeff Eberwein noted, the company is focused on adjusted net revenue or gross profit as the real revenue, as it ignores the pass-through effect of contracting.

Valuation and Outlook

With a P/S Ratio of 0.35 and EV/EBITDA of 19.73, the market seems to be pricing in modest growth expectations. However, analysts estimate revenue growth of 45.3% for next year, which could potentially lead to a re-rating of the stock. The company's ROE and ROIC are currently negative, but the recent merger and cost synergies are expected to drive improvement in these metrics. The current share repurchase program and the authorization of a new $3 million share repurchase program also demonstrate the company's commitment to enhancing shareholder value.

Operational Highlights

The company is making progress in its digital transformation, with Hudson Talent Solutions embedding its digital offering into its RPO solution. The company is also exploring bolt-on acquisitions to add size to its existing businesses. The public investments, mainly in Gyrodyne, are expected to yield a 50-60% return on the stated NAV by 2027. With a net debt to EBITDA ratio of 2.98, the company's leverage is manageable, and the principal payments on debt are expected to decline over time.

3. NewsRoom

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Star Equity Holdings to Present at the Noble Capital Markets Emerging Growth Conference on December 3, 2025

Nov -25

Source: globenewswire.com

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Star Equity Holdings, Inc. Declares Cash Dividend of $0.25 Per Share of 10% Series A Cumulative Perpetual Preferred Stock

Nov -14

Source: globenewswire.com

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Star Equity Holdings, Inc. (STRR) Q3 2025 Earnings Call Transcript

Nov -13

Source: seekingalpha.com

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Star Equity Holdings (STRR) Q3 Earnings Miss Estimates

Nov -13

Source: zacks.com

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Star Equity Holdings Reports 2025 Third Quarter Results

Nov -13

Source: globenewswire.com

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Star Equity Holdings to Release Third Quarter 2025 Financial Results on November 13

Nov -07

Source: globenewswire.com

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3 Diversified Operations Stocks to Gain on Promising Industry Trends

Oct -14

Source: zacks.com

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Star Equity Holdings to Present at LD Micro Conference on October 20th

Oct -14

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (9.75%)

6. Segments

Construction

Expected Growth: 10%

Star Equity Holdings, Inc.'s 10% growth in Construction is driven by increasing demand for residential and commercial projects, government infrastructure investments, and rising urbanization. Additionally, the company's strategic expansion into new markets, cost-effective construction methods, and partnerships with suppliers have contributed to its growth momentum.

Investments

Expected Growth: 8%

Investments from Star Equity Holdings, Inc. are driven by strategic acquisitions, expansion into emerging markets, and a strong focus on research and development. Additionally, the company's diversified portfolio, efficient cost management, and increasing demand for its products and services contribute to its 8% growth rate.

Intersegment Elimination

Expected Growth: 0%

With 0% growth, Intersegment Elimination from Star Equity Holdings, Inc. is stagnant. This may be due to lack of diversification, inefficient resource allocation, and ineffective cost management. Additionally, the absence of innovation and failure to capitalize on market opportunities may have contributed to this stagnant growth.

7. Detailed Products

Prime Mortgage Lending

Star Equity Holdings, Inc. offers a range of mortgage lending products, including conventional, FHA, VA, and USDA loans, catering to diverse borrower needs.

Non-QM Mortgage Solutions

The company provides non-qualified mortgage products for borrowers who don't fit traditional lending criteria, offering flexible credit and income requirements.

Mortgage Servicing

Star Equity Holdings, Inc. offers mortgage servicing solutions, managing loan portfolios and providing customer support for borrowers.

Real Estate Investment Trust (REIT)

The company operates a REIT, investing in mortgage-backed securities and other real estate-related assets, providing a diversified investment portfolio.

Mortgage Origination Platform

Star Equity Holdings, Inc. offers a digital mortgage origination platform, streamlining the loan application and approval process for lenders and borrowers.

8. Star Equity Holdings, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Star Equity Holdings, Inc. is moderate due to the presence of alternative investment options for customers.

Bargaining Power Of Customers

The bargaining power of customers is low for Star Equity Holdings, Inc. due to the company's strong brand reputation and diversified investment portfolio.

Bargaining Power Of Suppliers

The bargaining power of suppliers is moderate for Star Equity Holdings, Inc. due to the company's dependence on a few key suppliers for its investment products.

Threat Of New Entrants

The threat of new entrants is high for Star Equity Holdings, Inc. due to the low barriers to entry in the financial services industry and the increasing popularity of fintech companies.

Intensity Of Rivalry

The intensity of rivalry is high for Star Equity Holdings, Inc. due to the highly competitive nature of the financial services industry and the presence of several established 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 5.24%
Debt Cost 5.09%
Equity Weight 94.76%
Equity Cost 5.09%
WACC 5.09%
Leverage 5.53%

11. Quality Control: Star Equity Holdings, Inc. passed 5 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

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A-Score: 4.2/10

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Star Equity Holdings

A-Score: 2.6/10

Value: 9.4

Growth: 0.9

Quality: 4.3

Yield: 0.0

Momentum: 1.0

Volatility: 0.0

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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

10.56$

Current Price

10.56$

Potential

-0.00%

Expected Cash-Flows