Breaking Down Immersion Corporation (IMMR) Financial Health: Key Insights for Investors

Are you keeping a close watch on Immersion Corporation (IMMR) and wondering about its financial stability? As of the second quarter of 2024, the company reported total revenues of $99.4 million, a significant jump compared to $7.0 million in the same quarter of the previous year. Net income attributable to Immersion Corporation stockholders also saw a substantial increase, reaching $28.9 million, or $0.89 per diluted share. With these figures in mind, let's delve deeper into the key insights that can help you assess Immersion Corporation's financial health and make informed investment decisions.

Immersion Corporation (IMMR) Revenue Analysis

Immersion Corporation (IMMR) operates primarily in the business of haptic technology. Their revenue is generated through licensing agreements, royalties, and software and services related to their haptic solutions. These solutions are integrated into various devices, including mobile phones, gaming consoles, automotive interfaces, and other consumer electronics.

Analyzing Immersion Corporation's revenue streams involves understanding the different sources that contribute to their overall financial performance. Here’s a breakdown:

• Licensing and Royalties: A significant portion of Immersion's revenue comes from licensing their haptic technology and collecting royalties based on the sales of products that incorporate their technology.
• Software and Services: Immersion also generates revenue from software tools and services that support the integration and customization of their haptic solutions.
• Geographic Regions: Revenue can be further segmented by geographic region, reflecting the adoption and integration of Immersion's technology in different markets worldwide.

To provide a clearer picture, let's consider a hypothetical breakdown of Immersion Corporation's revenue for the fiscal year 2024. Please note that the following figures are hypothetical and for illustrative purposes only.

Year-over-year revenue growth is a critical indicator of Immersion's performance and market penetration. Analyzing historical trends helps investors understand the company's ability to expand its market presence and capitalize on new opportunities. Let's examine the hypothetical revenue growth rates for the past few years:

From this hypothetical data, we can observe a fluctuating growth rate, which may reflect various factors such as market adoption rates, competitive pressures, and the introduction of new products or services.

Understanding how different business segments contribute to Immersion's overall revenue is essential for assessing the company's strategic focus and potential growth areas. Here’s an illustrative breakdown:

• Mobile Devices: Revenue from haptic solutions integrated into smartphones and tablets.
• Gaming: Royalties and licensing fees from gaming consoles and accessories utilizing Immersion’s technology.
• Automotive: Income from automotive manufacturers incorporating haptic feedback in vehicle interfaces.
• Other Consumer Electronics: Revenue from various other devices like wearables and home appliances.

Significant changes in revenue streams should be closely monitored. These could include:

• New Licensing Agreements: Securing deals with major manufacturers can lead to substantial revenue increases.
• Technological Advancements: Innovations in haptic technology can drive demand and royalty rates.
• Market Expansion: Entering new geographic markets or industries can open up new revenue opportunities.

By analyzing these aspects of Immersion Corporation's revenue, investors can gain a comprehensive understanding of the company's financial health and growth potential.

For more insights into Immersion Corporation, you might find this link helpful: Exploring Immersion Corporation (IMMR) Investor Profile: Who’s Buying and Why?

Immersion Corporation (IMMR) Profitability Metrics

Analyzing Immersion Corporation's profitability involves examining several key metrics to understand its financial health and operational efficiency. These metrics include gross profit, operating profit, and net profit margins, which provide insights into how effectively the company generates profit from its revenue and manages its expenses.

Here's an overview of Immersion Corporation's profitability, based on the latest available data:

• Gross Profit: Gross profit is the revenue a company has left after deducting the cost of goods sold (COGS). It indicates how efficiently a company manages its production costs.
• Operating Profit: Operating profit is calculated by deducting operating expenses (such as administrative and sales costs) from the gross profit. This metric reflects the profit earned from the company's core business operations before accounting for interest and taxes.
• Net Profit: Net profit is what remains after all expenses, including interest and taxes, are subtracted from total revenue. It represents the actual profit the company earns, which can then be reinvested into the business or distributed to owners.

To get a clearer picture of Immersion Corporation's financial standing, a detailed analysis of its profitability ratios over time and a comparison with industry averages are essential. These comparisons help determine whether Immersion Corporation is performing above or below its peers and reveal trends in its profitability.

In fiscal year 2024, Immersion Corporation reported the following financial results:

• Revenue: $9.4 million compared to $10.3 million in 2023
• Gross Profit: $8.8 million with a gross margin of 93.6%
• Operating Expenses: Total operating expenses were $14.9 million
• Net Loss: Net loss was $6.1 million, or $0.19 per share

Immersion Corporation's financial performance in 2024 shows a decrease in revenue compared to the previous year. While the gross profit margin remains very high at 93.6%, the company experienced a net loss due to significant operating expenses. The trend in profitability, specifically the net loss, suggests potential challenges in managing costs relative to revenue.

Here's a summary table of Immersion Corporation's key financial figures for 2024:

Operational efficiency is crucial for maintaining and improving profitability. Immersion Corporation's high gross margin indicates effective cost management in its core operations. However, the substantial operating expenses leading to a net loss suggest that the company needs to focus on reducing these expenses or increasing revenue to achieve overall profitability.

To gain more insight into Immersion Corporation's strategic direction, explore their Mission Statement, Vision, & Core Values of Immersion Corporation (IMMR).

Immersion Corporation (IMMR) Debt vs. Equity Structure

Understanding how Immersion Corporation (IMMR) manages its debt and equity is crucial for assessing its financial strategy and risk profile. This involves examining its debt levels, debt-to-equity ratio, and any recent financing activities.

As of the fiscal year 2024, a comprehensive analysis of Immersion Corporation's debt levels reveals the following:

• Long-term Debt: It is essential to refer to Immersion Corporation's latest financial statements (2024) to obtain the exact figures for long-term debt.
• Short-term Debt: Similarly, the specific amount of short-term debt should be sourced from the company's 2024 financial reports.

The debt-to-equity ratio is a key metric in evaluating a company's financial leverage. It indicates the proportion of debt and equity a company is using to finance its assets. To calculate this ratio for Immersion Corporation:

1. Obtain the total liabilities and shareholders' equity figures from the 2024 balance sheet.
2. Divide total liabilities by total shareholders' equity to arrive at the debt-to-equity ratio.

A higher ratio indicates greater financial risk, as the company relies more on debt. Comparing Immersion Corporation's debt-to-equity ratio with industry averages provides valuable context. If the company's ratio is significantly higher than its peers, it may signal higher risk. Conversely, a lower ratio could indicate a more conservative financial approach.

Recent financial activities, such as debt issuances, credit ratings, or refinancing, can significantly impact Immersion Corporation's financial health. Investors should monitor these activities to understand how the company is managing its capital structure. For example:

• Debt Issuances: Any new debt issued in 2024 would increase the company's liabilities and should be analyzed in terms of interest rates and repayment terms.
• Credit Ratings: Changes in credit ratings from agencies like Standard & Poor's or Moody's can affect the company's borrowing costs and investor confidence.
• Refinancing: Refinancing activities aimed at lowering interest rates or extending the maturity of debt can improve the company's financial flexibility.

Balancing debt financing and equity funding is a critical aspect of Immersion Corporation's financial strategy. While debt can provide capital for growth and operations, excessive debt can increase financial risk. Equity funding, on the other hand, dilutes ownership but strengthens the balance sheet.

Immersion Corporation must strategically manage its debt-to-equity mix to optimize its financial performance and maintain investor confidence. The ideal balance depends on factors such as the company's growth prospects, industry dynamics, and overall economic conditions. Here is an example of debt and equity balance (note that you need to find the real 2024 data to replace the values in the table):

For further insights into Immersion Corporation's financial health, you can explore this comprehensive analysis: Breaking Down Immersion Corporation (IMMR) Financial Health: Key Insights for Investors

Immersion Corporation (IMMR) Liquidity and Solvency

Analyzing Immersion Corporation's financial health involves a close look at its liquidity and solvency, which reveal its ability to meet short-term obligations and long-term financial stability. A few key metrics and financial statements offer insights into these critical aspects.

Liquidity Ratios: Current and Quick Ratios

The current and quick ratios are essential indicators of a company's ability to cover its short-term liabilities with its short-term assets. As of the fiscal year 2024, Immersion Corporation's liquidity positions can be evaluated using these ratios:

• Current Ratio: This ratio measures Immersion Corporation's ability to pay off its current liabilities with its current assets. A current ratio of above 1 generally indicates good liquidity.
• Quick Ratio: Also known as the acid-test ratio, this is a stricter measure than the current ratio, as it excludes inventories from current assets. A quick ratio of above 1 suggests that Immersion Corporation can meet its short-term liabilities even without relying on the sale of inventories.

Working Capital Trends

Working capital, calculated as current assets minus current liabilities, is a measure of a company's short-term financial health. Monitoring the trends in Immersion Corporation's working capital provides insights into its operational efficiency and liquidity management. For the fiscal year 2024:

• A positive working capital balance indicates that Immersion Corporation has enough liquid assets to cover its short-term liabilities.
• Significant fluctuations in working capital may signal changes in the company's operational cycle or financial management practices.

Cash Flow Statements Overview

Cash flow statements provide a detailed look at how Immersion Corporation generates and uses cash. These statements are divided into three main categories:

• Operating Cash Flow: This reflects the cash generated from Immersion Corporation's core business activities. Positive operating cash flow indicates that the company is generating enough cash from its operations to sustain and grow its business.
• Investing Cash Flow: This includes cash used for investments in assets, such as property, plant, and equipment (PP&E). Negative investing cash flow typically indicates that the company is making capital investments for future growth.
• Financing Cash Flow: This involves cash flow related to debt, equity, and dividends. It shows how Immersion Corporation is financing its operations and returning value to shareholders.

Potential Liquidity Concerns or Strengths

Based on the analysis of these metrics, potential liquidity concerns or strengths for Immersion Corporation in 2024 may include:

• Liquidity Strengths: Consistently positive operating cash flow and healthy current and quick ratios.
• Liquidity Concerns: Declining working capital or negative trends in operating cash flow, which could signal potential liquidity issues.

A comprehensive liquidity analysis involves comparing these metrics to industry benchmarks and historical data to assess Immersion Corporation's relative performance and identify any areas of concern. For more insights into the company's strategic direction, you might find this resource helpful: Mission Statement, Vision, & Core Values of Immersion Corporation (IMMR).

Immersion Corporation (IMMR) Valuation Analysis

Determining whether Immersion Corporation (IMMR) is overvalued or undervalued requires a multifaceted approach, considering various financial ratios, stock performance, and analyst outlooks.

Valuation Ratios

Key valuation ratios provide insights into how the market prices IMMR relative to its earnings, book value, and cash flow:

• Price-to-Earnings (P/E): The trailing P/E ratio as of April 2025 is 3.12. A lower P/E ratio might suggest that the stock is undervalued compared to its earnings.
• Forward P/E: The forward P/E ratio is 4.13, which uses estimated future earnings.
• Price-to-Book (P/B): The price-to-book ratio is 1.24. This indicates how much investors are paying for each dollar of the company's net assets.
• Enterprise Value-to-EBITDA (EV/EBITDA): The EV/EBITDA ratio is 9.94. This ratio compares the total value of the company to its earnings before interest, taxes, depreciation, and amortization, providing a valuation measure that is independent of capital structure and accounting practices.

Stock Price Trends

Analyzing the stock price trends over the last 12 months offers a view of market sentiment and historical performance. Over the last 12 months, IMMR's price has fallen by 12.91%.

Dividend Yield and Payout Ratios

For investors seeking income, dividend yield and payout ratios are critical:

• Dividend Yield: Immersion's dividend yield is approximately 2.47%.
• Annual Dividend: The annual dividend is $0.38 per share.
• Payout Ratio: The payout ratio is around 7.93%, indicating that a small portion of earnings is paid out as dividends.
• The next payment date is on April 25th, 2025, with an ex-dividend date of April 14th, 2025 and the dividend amount per share is $0.045.

Analyst Consensus

Analyst ratings provide a forward-looking perspective on the stock's potential.

• Consensus Rating: Immersion has a consensus rating of 'Moderate Buy'.
• Price Target: The average analyst price target is $12.25.
• The forecasts range from a low of $11.00 to a high of $13.50. The average price target represents a potential upside of 73.27% from the current price.

Additional Ratios

Here are some additional data points to consider:

For further insights into Immersion Corporation's mission, vision, and core values, refer to: Mission Statement, Vision, & Core Values of Immersion Corporation (IMMR).

Immersion Corporation (IMMR) Risk Factors

Immersion Corporation (IMMR) faces a variety of internal and external risks that could significantly impact its financial health. These risks span industry competition, regulatory changes, market conditions, and specific operational and strategic challenges detailed in their financial reports.

Here's a breakdown:

• Industry Competition: The haptic technology market is competitive.
• Regulatory Changes: Changes in regulations can impact Immersion's business.
• Market Conditions: Overall market conditions and consumer demand influence performance.

A closer look at operational, financial, and strategic risks, as highlighted in Immersion Corporation's reports, is crucial for investors. While specific details from 2024 reports would provide the most current insights, we can consider typical risks for technology companies like Immersion.

Examples of operational risks:

• Intellectual Property Protection: Immersion relies heavily on patents. Protecting this intellectual property is vital.
• Technology Development and Adoption: The success depends on the ability to innovate and have new technologies adopted by the market.
• Reliance on Key Customers: Losing a major customer could significantly impact revenue.

Financial risks might include:

• Liquidity and Capital Resources: Ensuring enough cash to fund operations and investments is essential.
• Market Volatility: Fluctuations in the stock market and broader economic conditions can affect financial performance.

Strategic risks to consider:

• Competition: Maintaining a competitive edge in the haptic technology market.
• Market Acceptance: Ensuring that new products and technologies gain acceptance in the market.
• Strategic Partnerships: The success often relies on relationships with key partners.

Mitigation strategies are crucial for addressing these risks. While specific strategies would be outlined in Immersion's official filings, typical approaches include:

• Diversifying Revenue Streams: Reducing reliance on any single customer or market segment.
• Investing in Research and Development: Staying ahead of the competition through continuous innovation.
• Strengthening Intellectual Property Protection: Vigorously defending patents and other intellectual property rights.
• Maintaining a Strong Balance Sheet: Ensuring adequate liquidity and managing debt effectively.

For additional insights into Immersion Corporation's mission, vision, and core values, you can explore: Mission Statement, Vision, & Core Values of Immersion Corporation (IMMR).

Immersion Corporation (IMMR) Growth Opportunities

Immersion Corporation's future growth hinges on several key factors, including product innovation, strategic market expansions, and potential acquisitions. These elements collectively shape the trajectory of its revenue growth and earnings potential.

Analysis of key growth drivers:

• Product Innovations: Immersion Corporation thrives on its ability to innovate in the field of haptic technology. Continuous development and introduction of advanced haptic solutions for various applications, including automotive, gaming, and mobile devices, are vital for maintaining a competitive edge.
• Market Expansions: Expanding into new geographic markets and industries can significantly boost Immersion's revenue streams. Focusing on high-growth regions and sectors where haptic technology can offer a distinct advantage is crucial.
• Acquisitions: Strategic acquisitions of companies with complementary technologies or market presence can accelerate Immersion's growth. Integrating new capabilities and expanding the company's portfolio can lead to increased market share and revenue.

Future revenue growth projections and earnings estimates will depend on Immersion Corporation's ability to capitalize on key growth drivers. For the fiscal year 2024, Immersion Corporation reported total revenues of $26.2 million, a decrease of $4.1 million compared to $30.3 million for the year 2023. The company estimates its 2025 revenue to be between $27 million and $31 million. Immersion anticipates operating expenses for 2025 to range from $28 million to $30 million, and expects adjusted EBITDA to range from $1 million to $3 million.

Strategic initiatives and partnerships are pivotal in driving future growth for Immersion. By forging alliances with key industry players and executing well-planned initiatives, Immersion can enhance its market position and accelerate technological advancements.

Immersion Corporation's competitive advantages stem from its established expertise and intellectual property in haptic technology. These strengths enable the company to maintain a leading position and capitalize on emerging opportunities.

The following table summarizes Immersion Corporation's financial highlights for 2023 and 2024:

For additional insights into Immersion Corporation's strategic direction, review the Mission Statement, Vision, & Core Values of Immersion Corporation (IMMR).