Breaking Down Cyanotech Corporation (CYAN) Financial Health: Key Insights for Investors

Breaking Down Cyanotech Corporation (CYAN) Financial Health: Key Insights for Investors

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Are you keeping a close watch on your investments and seeking to understand the financial stability of companies like Cyanotech Corporation (CYAN)? Did you know that in the third quarter of fiscal year 2025, Cyanotech reported a 10.6% increase in net sales, reaching $6,172,000, compared to $5,582,000 in the same quarter of the previous year? Furthermore, the gross profit margin improved to 35.3% from 29.5% year-over-year. But how do these figures truly reflect the company's financial health, and what key insights can investors like you glean from these numbers?

Cyanotech Corporation (CYAN) Revenue Analysis

Understanding Cyanotech Corporation's revenue streams is crucial for investors seeking insights into the company's financial health. A detailed analysis reveals the sources of revenue, growth trends, and the impact of various business segments on the company’s overall financial performance.

Cyanotech Corporation primarily generates revenue through the production and sale of nutritional products derived from microalgae. These products include:

  • Spirulina: A blue-green algae known for its high protein and nutrient content, sold as a dietary supplement.
  • Astaxanthin: A powerful antioxidant used in dietary supplements and aquaculture feed.

Analyzing Cyanotech Corporation’s revenue involves examining several key aspects:

  • Breakdown of primary revenue sources (e.g., products, services, regions)
  • Year-over-year revenue growth rate (historical trends, percentage increase/decrease)
  • Contribution of different business segments to overall revenue
  • Analysis of any significant changes in revenue streams

Unfortunately, specific year-over-year revenue growth rates and detailed breakdowns of revenue contribution by different business segments for the fiscal year 2024 are not available in the provided search results. For precise figures, consulting Cyanotech Corporation's official financial statements and investor reports is recommended.

For more insights into the investors behind Cyanotech Corporation, consider reading: Exploring Cyanotech Corporation (CYAN) Investor Profile: Who’s Buying and Why?

Cyanotech Corporation (CYAN) Profitability Metrics

Understanding Cyanotech Corporation's financial health requires a close examination of its profitability metrics. These metrics provide insights into how efficiently the company generates profits from its revenue and assets.

Here's a breakdown of key profitability aspects:

  • Gross Profit Margin: This ratio indicates the percentage of revenue remaining after deducting the cost of goods sold (COGS). A higher gross profit margin suggests that Cyanotech is efficient in managing its production costs.
  • Operating Profit Margin: The operating profit margin reveals the percentage of revenue remaining after deducting both COGS and operating expenses. This metric reflects the company's efficiency in managing its core business operations.
  • Net Profit Margin: This is the percentage of revenue that remains as net income after all expenses, including interest and taxes, are deducted. The net profit margin is a comprehensive measure of overall profitability.

Analyzing trends in these profitability metrics over time is crucial. Consistent improvement in margins indicates enhanced efficiency and profitability, while declining margins may signal operational challenges or increased competition. Comparing Cyanotech's profitability ratios with industry averages provides context. If Cyanotech's margins are higher than its peers, it suggests a competitive advantage. Conversely, lower margins may indicate areas needing improvement.

Operational efficiency is a critical driver of profitability. Effective cost management and favorable gross margin trends directly impact the bottom line. Investors should monitor these trends closely to assess Cyanotech's ability to maintain and improve its profitability.

For additional insights into Cyanotech's strategic direction, refer to Mission Statement, Vision, & Core Values of Cyanotech Corporation (CYAN).

Cyanotech Corporation (CYAN) Debt vs. Equity Structure

Understanding how Cyanotech Corporation (CYAN) finances its operations and growth is crucial for investors. This involves analyzing the company's debt levels, its debt-to-equity ratio, and how it strategically uses debt versus equity to fund its activities.

As of the quarter ended December 31, 2023, Cyanotech Corporation reported:

  • Total current liabilities of $2.98 million
  • Total liabilities of $4.34 million

This provides a snapshot of the company's short-term and overall debt obligations at that specific point in time.

The debt-to-equity ratio is a key metric for evaluating a company's financial leverage. It indicates the proportion of debt and equity a company uses to finance its assets. Unfortunately, specific debt-to-equity ratio figures and detailed comparisons against industry standards for Cyanotech Corporation were not available in the provided search results. To calculate this, one would divide the company's total liabilities by its total shareholders' equity. A higher ratio generally indicates more financial risk, as the company relies more on debt. A lower ratio suggests a more conservative approach.

Recent activities such as debt issuances, credit ratings, or refinancing can significantly impact a company's financial health. The search results did not provide specific details on these activities for Cyanotech Corporation. Tracking these events is important because they can affect the company's interest expenses, cash flow, and overall financial stability.

Balancing debt and equity is a strategic decision for companies. Debt financing can provide capital for growth without diluting ownership, but it also introduces fixed interest payments and the risk of default. Equity financing, on the other hand, does not require repayment but dilutes ownership and can be more expensive in the long run. The optimal mix depends on the company's growth prospects, risk tolerance, and market conditions. Without specific information on Cyanotech Corporation’s strategy, it's challenging to assess their approach.

For more in-depth analysis, you can check out: Breaking Down Cyanotech Corporation (CYAN) Financial Health: Key Insights for Investors

Cyanotech Corporation (CYAN) Liquidity and Solvency

Assessing Cyanotech Corporation's (CYAN) liquidity involves examining key financial metrics that reveal the company's ability to meet its short-term obligations. Here's an overview:

Current and Quick Ratios:

  • The current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations with its current assets.
  • For fiscal year 2023, the current ratio was 1.62, while in 2022, it was 1.45 [2].
  • The quick ratio, which excludes inventories from current assets, provides a more conservative view of liquidity.
  • As of December 2024, Cyanotech's quick ratio was 0.28, indicating that the company's most liquid assets may not fully cover its current liabilities [1].
  • Historically, Cyanotech's quick ratio has ranged from a minimum of 0.28 to a maximum of 1.53 over the past 13 years, with a median of 0.75 [1].
  • For fiscal year 2023, the quick ratio was 1.18, while in 2022, it was 1.03 [2].

Analysis of Working Capital Trends:

  • Working capital, which is the difference between current assets and current liabilities, is an important measure of a company's short-term financial health.
  • As of June 30, 2024, Cyanotech's working capital was $207,000, a decrease of $1.8 million compared to March 31, 2024 [3].
  • As of December 31, 2024, the company had working capital of $602,000 compared to $550,000 as of September 30, 2024 [5].
  • In Q3 2024, the company's working capital was $3.7 million, compared to $5.4 million in the same period of the prior year [4].

Cash Flow Statements Overview:

  • Analyzing cash flow trends helps understand the movement of cash both into and out of the company.
  • Trends in operating, investing, and financing activities are vital for assessing liquidity.

Potential Liquidity Concerns or Strengths:

  • Low Quick Ratio: A quick ratio of 0.28 as of December 2024 suggests that Cyanotech may face challenges in meeting its short-term obligations with its most liquid assets [1].
  • Decreasing Working Capital: The decrease in working capital from March 31, 2024, to June 30, 2024, indicates a tightening of short-term liquidity [3].
  • Non-Compliance with Financial Covenants: As of March 31, 2024, Cyanotech was not in compliance with required debt service coverage and current ratios, which could further strain liquidity [12], [17], [20].

The company’s financial statements as of June 30, 2024, indicate that it is engaged in the production of natural products derived from microalgae for the dietary supplements market [3]. The company reported a net sales increase of 10.6% for Q3 Fiscal Year 2025, with a gross profit margin of 35.3% [19].

Below is a summary of key balance sheet and cash flow figures:

Metric Amount
Total Cash (mrq) $359K
Total Debt/Equity (mrq) 122.60%
Levered Free Cash Flow (ttm) $1.3M

These factors suggest that investors and stakeholders should carefully monitor Cyanotech's liquidity position and strategies for managing its short-term obligations. [3].

Cyanotech Corporation (CYAN) Valuation Analysis

Assessing whether Cyanotech Corporation (CYAN) is overvalued or undervalued requires a multifaceted approach, incorporating key financial ratios, stock performance analysis, and analyst sentiment. This analysis provides investors with a clearer picture of the company's current market position and potential future value. To make informed decisions, it's essential to consider various valuation metrics and market indicators.

Key valuation ratios offer insights into how the market prices Cyanotech Corporation (CYAN) relative to its earnings, book value, and operational cash flow. Here's how these metrics can be applied:

  • Price-to-Earnings (P/E) Ratio: This ratio indicates how much investors are willing to pay for each dollar of Cyanotech Corporation (CYAN)'s earnings. A higher P/E ratio might suggest overvaluation, while a lower one could indicate undervaluation, relative to industry peers or the company's historical average.
  • Price-to-Book (P/B) Ratio: The P/B ratio compares Cyanotech Corporation (CYAN)'s market capitalization to its book value of equity. It can help determine whether the stock price is justified by the company's net asset value. A lower P/B ratio may suggest the stock is undervalued.
  • Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: This ratio compares the total value of Cyanotech Corporation (CYAN) to its earnings before interest, taxes, depreciation, and amortization (EBITDA). It provides a more comprehensive valuation measure than the P/E ratio, as it accounts for debt and capital expenditures. A lower EV/EBITDA ratio could indicate undervaluation.

Analyzing Cyanotech Corporation (CYAN)'s stock price trends over the past year, or longer, can reveal important insights into market sentiment and company performance. Here's what to look for:

  • Stock Price Trends: Upward trends may reflect positive market sentiment and strong company performance, while downward trends could indicate concerns about the company's future prospects.
  • Historical Data: Examining long-term stock performance can provide a broader perspective on the company's ability to deliver returns over time.

If Cyanotech Corporation (CYAN) distributes dividends, the dividend yield and payout ratios are important for investors seeking income. Here's how to interpret these metrics:

  • Dividend Yield: This is the annual dividend payment relative to the stock price, expressed as a percentage. A higher dividend yield can be attractive to income-seeking investors.
  • Payout Ratios: This indicates the percentage of earnings paid out as dividends. A lower payout ratio suggests the company has more room to increase dividends in the future.

Analyst consensus on Cyanotech Corporation (CYAN)'s stock valuation provides a summary of professional opinions on the stock. Here's how to interpret analyst ratings:

  • Buy, Hold, or Sell Ratings: These ratings reflect analysts' recommendations on whether to buy, hold, or sell the stock. A consensus buy rating suggests positive expectations, while a sell rating indicates negative sentiment.
  • Price Targets: Analysts often provide price targets, which represent their expectations for the stock's future price. Comparing the current stock price to the consensus price target can help determine whether the stock is undervalued or overvalued.

By examining these factors, investors can gain a more informed understanding of Cyanotech Corporation (CYAN)'s valuation and make better investment decisions. For further insights, you can explore: Breaking Down Cyanotech Corporation (CYAN) Financial Health: Key Insights for Investors

Cyanotech Corporation (CYAN) Risk Factors

Understanding the risks associated with investing in Cyanotech Corporation (CYAN) is crucial for making informed decisions. These risks can be broadly categorized into internal and external factors that may impact the company's financial health.

External Risks:

External risks include industry competition, regulatory changes, and market conditions. Cyanotech faces competition from other producers of astaxanthin and spirulina, as well as potential new entrants into the market. Changes in regulations related to food safety, environmental standards, or healthcare could also adversely affect Cyanotech's operations and financial performance. Economic downturns or shifts in consumer preferences could reduce demand for the company's products, impacting revenue and profitability.

Internal Risks:

Internal risks can stem from operational, financial, or strategic challenges. Operational risks might involve production inefficiencies, supply chain disruptions, or quality control issues. Financial risks could include fluctuations in raw material costs, difficulties in managing debt, or the need for additional capital. Strategic risks may arise from unsuccessful product development, failure to adapt to changing market trends, or ineffective marketing strategies. Investors can gain valuable insights into these risks by carefully reviewing Cyanotech's earnings reports and filings.

Some of the risks are:

  • Competition: The natural algae market is competitive.
  • Dependence on Key Customers: Loss of a major customer could significantly impact revenue.
  • Raw Material Costs: Fluctuations in the cost of raw materials can affect profitability.
  • Product Liability: Potential for product liability claims.
  • Dependence on Kona, Hawaii Operations: Any disruption to operations in Kona could impact production.
  • Climate Change: Climate change and related unusual weather patterns could impact operations.

Mitigation Strategies:

While specific mitigation strategies may vary, Cyanotech likely employs several approaches to manage these risks. These could include diversifying its customer base, investing in research and development to create innovative products, implementing cost-control measures, and maintaining strong relationships with suppliers. The company may also carry insurance to protect against certain types of losses and have contingency plans in place to address potential disruptions.

For more insights into Cyanotech Corporation (CYAN), consider reading: Exploring Cyanotech Corporation (CYAN) Investor Profile: Who’s Buying and Why?

Cyanotech Corporation (CYAN) Growth Opportunities

To understand where Cyanotech Corporation (CYAN) is headed, it's crucial to analyze the factors driving its potential growth. These encompass product innovations, market expansions, strategic initiatives, and the competitive advantages that set the company apart.

Key growth drivers for Cyanotech Corporation include:

  • Product Innovations: Continued investment in research and development to create new and improved products in the nutraceutical and aquaculture sectors.
  • Market Expansions: Targeting new geographic markets and customer segments to increase the reach of its existing product line.
  • Strategic Partnerships: Collaborating with other companies to expand distribution channels and develop new products.

Predicting future revenue growth and earnings requires a look at current market trends and Cyanotech's strategic positioning. While specific projections vary, several factors suggest a positive outlook. According to the latest available information, Cyanotech Corporation's most recent revenue was reported at $33.44 million.

Strategic initiatives and partnerships play a vital role in Cyanotech’s growth trajectory. These collaborations can unlock new markets, enhance product offerings, and drive innovation. Here are some potential avenues:

  • Distribution Agreements: Partnering with major retailers or distributors to expand product availability.
  • Research Collaborations: Working with universities or research institutions to develop new technologies and products.
  • Joint Ventures: Teaming up with other companies to enter new markets or develop new products.

Cyanotech possesses several competitive advantages that position it for growth:

  • Established Brand: A recognized and trusted brand in the nutraceuticals market.
  • Proprietary Technology: Unique technology for the production of high-quality microalgae.
  • Vertically Integrated Operations: Control over the entire production process, from cultivation to finished product.

For additional insights into the company's direction, explore Mission Statement, Vision, & Core Values of Cyanotech Corporation (CYAN).

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