Breaking Down SG Blocks, Inc. (SGBX) Financial Health: Key Insights for Investors

You're looking at SG Blocks, Inc. (SGBX) and seeing a company in the middle of a major pivot, so you need to cut through the noise to understand the real financial health. Honestly, the second quarter of 2025 tells a story of challenge and aggressive repositioning: the core construction services revenue dropped 40% year-over-year, hitting only $721,351, which translated to a $4.57 million net loss for the quarter. That's a tough quarter. But here's the quick math: the company's total assets ballooned to $53.74 million by June 30, 2025, up from $6.07 million at the end of 2024, largely due to strategic oil and gas acquisitions like Sherman Oil and Winchester Oil & Gas. This shift signals a move away from modular construction as the sole focus, but it also means the company is sitting on just $2.77 million in cash, making the execution of that $35 million Wyoming refinery acquisition Letter of Intent (LOI) a defintely high-stakes play. We need to map out if this asset-heavy strategy can overcome the persistent negative earnings per share (EPS) and drive value beyond the current $3.82 stock price.

Revenue Analysis

You need to know where the money is coming from, and for SG Blocks, Inc. (SGBX), the revenue picture in 2025 is a tale of two very different movements: a sharp contraction in its core business and a strategic pivot into new, unproven areas. The direct takeaway is that the company's total revenue for the last twelve months (TTM) ending September 30, 2025, sat at approximately $3.38 million, representing a year-over-year decline of about 42.56%.

The core of SG Blocks, Inc.'s revenue has always been its Construction Services segment. This includes the manufacturing unit, SG ECHO, and various modular projects. But this core business has been the main driver of the recent decline. For the nine months ended September 30, 2025, total revenue fell by 41% compared to the same period last year, primarily because of fewer construction jobs in progress. Honestly, that's a massive drop in the segment that's supposed to be your bread and butter.

Here's the quick math on the near-term revenue performance:

What this estimate hides is a serious concentration risk. As of the first half of 2025, a single customer accounted for approximately 81% of the company's six-month revenue. Losing a contract of that magnitude would defintely be catastrophic to the top line, so that's a major vulnerability to watch.

The most significant change in the revenue mix is the company's strategic shift toward the energy sector. In Q2 2025, SG Blocks, Inc. (which now operates as Safe & Green Holdings Corp.) began introducing new revenue streams from Oil and Gas and Subscriptions. This is a direct result of acquisitions like Sherman Oil and a 51% asset purchase of Winchester Oil & Gas. This pivot means the segment contribution is changing, moving away from a near-total reliance on modular construction, which is a big strategic bet.

Segment contribution now spans four main areas, though Construction remains dominant:

• Construction Services (The majority revenue source)
• Medical (From joint venture COVID-19 lab ops)
• Real Estate Development
• Environmental (Newer focus, tied to the energy pivot)

The construction backlog, which gives us a peek at near-term guaranteed revenue, was only $1.21 million as of Q2 2025. This is a low number relative to the historical revenue figures, but the new oil and gas assets are clearly intended to compensate for the weakness in the construction segment. If you're looking to understand the people behind these investment decisions, you might want to check out Exploring SG Blocks, Inc. (SGBX) Investor Profile: Who's Buying and Why?

Profitability Metrics

You need a clear, unvarnished look at SG Blocks, Inc. (SGBX)'s profitability, and the data from the last twelve months (TTM) leading up to November 2025 is stark. The company is currently operating at a significant loss across all key profitability metrics, a situation that demands immediate attention from investors and management.

Here's the quick math on the trailing twelve months, where SG Blocks, Inc. (SGBX) reported total revenue of approximately $3.38 million.

• Gross Profit Margin: The margin is deeply negative at -63.44%. This means the cost of goods sold (COGS) is far exceeding revenue, resulting in a TTM gross loss of $2.15 million.
• Operating Profit Margin: This margin sits at approximately -310.65%, reflecting an operating loss of $10.50 million. The massive gap between gross and operating loss highlights severe issues with overhead control.
• Net Profit Margin: The bottom line is a net loss of $22.41 million, translating to a net profit margin of roughly -663.02%. That is a massive hole to dig out of, defintely.

Profitability Trends and Industry Comparison

The trend in profitability is one of widening losses and declining top-line performance. In Q2 2025 alone, revenue dropped 40% year-over-year to $721,351, while the net loss for the quarter was $4.57 million. This downward trajectory led to the strategic pivot announced in November 2025, where the company formally exited the residential modular construction business to focus on containerized energy systems.

To be fair, the construction industry operates on thin margins, but SG Blocks, Inc. (SGBX)'s performance is far outside the norm. Modular construction companies typically see gross margins between 20% and 25%, and specialty trade contractors often achieve net profit margins in the 6.9% to 8.5% range.

Compare SG Blocks, Inc. (SGBX)'s TTM margins to the industry benchmarks:

Analysis of Operational Efficiency

The operational efficiency of SG Blocks, Inc. (SGBX) is the core problem. The negative gross profit of $994,468 in Q2 2025 signals a fundamental breakdown in cost management, meaning the company is losing money on the direct production of its goods and services. You can't scale a business that loses money on every sale.

The situation is compounded by soaring overhead. In Q2 2025, operating expenses more than doubled year-over-year to $1.956 million. This simultaneous occurrence of negative gross profit and ballooning overhead is the classic recipe for a liquidity crisis, which is why the company has faced substantial doubt about its ability to continue as a going concern. The pivot to containerized energy systems is a clear, high-risk attempt to correct this efficiency problem by shifting the business model entirely. For more on the strategic direction, you can review the Mission Statement, Vision, & Core Values of SG Blocks, Inc. (SGBX).

Debt vs. Equity Structure

You need a clear picture of how Safe & Green Holdings Corp. (SGBX) is funding its operations, especially with their recent strategic pivot into the energy sector. The short answer is that the company is maintaining a manageable debt-to-equity ratio relative to its industry, but its overall liquidity remains a serious concern.

As of the most recent balance sheet data, Safe & Green Holdings Corp. (SGBX) reports total debt of approximately $12.2 million, set against total shareholder equity of about $24.9 million. This translates to a Debt-to-Equity (D/E) ratio of roughly 48.9% (or 0.49). This is a critical metric: it tells you how much debt the company uses to finance its assets relative to the value of its shareholders' equity.

Here's the quick math on their leverage:

• Total Debt-to-Equity Ratio: 48.9%
• Industry Average (Metal Fabrication): 51% (or 0.51)

For a capital-intensive business like metal fabrication and construction, a D/E ratio of 0.49 is generally considered moderate, and it's slightly lower than the recent industry average of 0.51. That said, this healthy-looking ratio hides a significant near-term risk: the short-term liabilities are massive compared to their assets, suggesting a major liquidity crunch is still a possibility. Exploring SG Blocks, Inc. (SGBX) Investor Profile: Who's Buying and Why?

The Balance of Short- and Long-Term Obligations

The real challenge lies in the breakdown of liabilities. While the overall D/E ratio is fine, the company's short-term liabilities-debts due within one year-stand at a staggering $24.0 million. This is far greater than the long-term liabilities, which are around $5.1 million. This imbalance is why their current ratio is so low, raising a red flag about their ability to meet immediate financial obligations.

To be fair, management is defintely aware of this and has been active on the financing front. In April 2025, they secured a substantial $100 million equity line of credit with Tysadco Partners LLC, which provides a capital cushion for future needs. They also issued a promissory note for up to $1,875,000, convertible into common stock, which is a common way to finance without immediate cash outflow.

Financing Strategy: Debt vs. Dilution

The company is clearly balancing the need for capital with the risk of shareholder dilution. They are using convertible notes and an equity line of credit, which allows them to raise funds now with the option to pay with stock later. This is a common strategy for growth-focused small-cap companies, but it puts pressure on the stock price if the conversion happens.

A positive sign is the post-Q2 2025 restructuring of a private placement, which reduced potential dilution by 70%. This shows a commitment to managing the impact of equity financing on existing shareholders. Still, the underlying need for capital remains high as the company executes its pivot away from modular home construction and into containerized construction and energy production, a move announced in November 2025. Your action item is to monitor the drawdowns on that $100 million equity line of credit, as that will be the clearest indicator of their immediate funding needs and future dilution risk.

Liquidity and Solvency

You need to know if SG Blocks, Inc. (SGBX) can cover its near-term obligations, and honestly, the picture is challenging. The company's liquidity position, measured by its current and quick ratios, suggests significant short-term risk, which is a major red flag for investors right now. This is a situation where you defintely need to map the risks to the actions.

The core issue is a lack of liquid assets relative to short-term debt. Here's the quick math on the latest available figures, which are TTM (Trailing Twelve Months) ending around November 2025:

• Current Ratio: The TTM Current Ratio stands at a very low 0.16. This means for every $1.00 in current liabilities (debts due within a year), SG Blocks, Inc. has only about $0.16 in current assets to pay it. A healthy ratio is typically 1.0 or higher.
• Quick Ratio: The Quick Ratio, which excludes inventory and is a stricter test of immediate liquidity (the acid-test), is even lower at 0.14. This confirms the company's most liquid assets are far from sufficient to meet its immediate obligations.

A Current Ratio this low points directly to a negative working capital position. Working capital is simply Current Assets minus Current Liabilities, and a ratio of 0.16 means current liabilities are over six times greater than current assets. This trend of deeply negative working capital has been a persistent issue, and it signals that the company must rely heavily on external financing-like issuing new stock or taking on more debt-just to fund its day-to-day operations.

When we look at the Cash Flow Statement, the trends reinforce the liquidity concerns. Cash from Operating Activities has been consistently negative, meaning the core business is consuming cash rather than generating it. For the nine months ended September 30, 2025, the company reported a net loss of $12.64 million, showing the cash burn is ongoing. To be fair, the company has managed to raise capital through financing activities, but that's not a sustainable long-term solution.

Here is a snapshot of the annual cash flow trends from the last full fiscal year (2024) and the latest available data to show the pattern:

The most critical takeaway is the explicit 'going concern' risk. The company's own financial disclosures have noted that substantial doubt remains about its ability to continue as a going concern due to the recurring losses and negative working capital. This is the stark reality of the liquidity situation. The positive Financing Cash Flow, which is keeping the lights on, is a temporary fix, not a permanent solution.

For a deeper dive into the company's overall financial picture, check out our full report: Breaking Down SG Blocks, Inc. (SGBX) Financial Health: Key Insights for Investors.

Your next step should be to monitor the Q4 2025 earnings report closely for any significant shift in the operating cash flow trend or a major capital raise that materially changes the Current Ratio.

Valuation Analysis

You want to know if SG Blocks, Inc. (SGBX) is overvalued or undervalued, and the simple answer is that its valuation metrics signal a company in a high-risk, transitional phase with significant negative profitability. The traditional price multiples are skewed by negative earnings and book value, but the market's consensus points to a substantial upside if their turnaround plan works.

As of November 20, 2025, the stock closed at $3.82, but the underlying financial ratios show a company struggling with profitability. The market capitalization is low at approximately $3.06 million, but the Enterprise Value (EV) is notably higher at $11.80 million, indicating the debt load is a significant factor in the total company value.

Here's the quick math on the key valuation multiples, which you need to interpret carefully due to the company's losses:

• Price-to-Earnings (P/E) Ratio: The TTM (Trailing Twelve Months) P/E ratio is a negative -0.08. This negative figure immediately tells you the company is not profitable; it's losing money, so the ratio is not useful for a standard valuation comparison.
• Price-to-Book (P/B) Ratio: The P/B ratio is approximately 0.12. A P/B below 1.0 often suggests a company is undervalued relative to its net assets (Book Value), but in this case, it is paired with a negative Return on Equity (ROE) of -219.65%, indicating the assets are not generating profit.
• Enterprise Value-to-EBITDA (EV/EBITDA): This is also negative, at approximately -1.05. Like P/E, a negative value signals negative EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), meaning the core operations are not generating enough cash before accounting for financing and non-cash charges.

Stock Performance and Volatility

The stock price trend over the last 12 months has been a brutal ride. The 52-week price change shows a sharp decline of -82.63%, with the stock moving between a 52-week low of $0.122 and a high of $10.54. That's extreme volatility. The stock's Beta is 2.11, which means it's more than twice as volatile as the overall market. This is defintely not a stock for the faint of heart; you must factor in this high risk.

The recent price action is a perfect example of this volatility, with the stock fluctuating 166.09% in a single day around November 20, 2025. For a deeper dive into the trading patterns, consider Exploring SG Blocks, Inc. (SGBX) Investor Profile: Who's Buying and Why?

Dividend Policy and Analyst Consensus

SG Blocks, Inc. (SGBX) does not pay a dividend, so the dividend yield and payout ratios are both 0.00% (N/A). This is standard for a growth-focused company, especially one that is currently cash-flow negative, as it must retain any available capital for operations and investment.

The analyst consensus is mixed, which is typical for highly volatile, low-cap stocks, but the majority sentiment is surprisingly bullish. A consensus of 7 analysts has a 'BUY' recommendation, projecting an average 12-month price target of $6.12. This suggests an upside of over 90% from the recent price. However, you must be a trend-aware realist: one recent rating is a 'Hold' with a much lower price target of $0.50. This wide range shows the market is split on whether the company can execute its turnaround plan and monetize its assets.

The valuation story here is not about being cheap on a P/E basis; it's a bet on the company's ability to fix its negative profitability and realize the value implied by its low Price-to-Book ratio. Your action here is to scrutinize the balance sheet and cash flow statements, not just the multiples.

Risk Factors

You need to look past the recent stock volatility and focus on the fundamental financial distress at SG Blocks, Inc. (SGBX). The direct takeaway is that the company faces an existential liquidity risk, evidenced by deep negative margins and a precarious balance sheet, which their strategic pivot to energy is attempting to offset.

The core challenge is financial. For the quarter ending September 30, 2025, SG Blocks, Inc. reported a net loss of $5.32 million on operating revenue of only $1.05 million. This isn't just a loss; it's a massive operational inefficiency, highlighted by a gross margin of a stark -64.6% and an EBIT margin (Earnings Before Interest and Taxes) of -616.1%. Simply put, the cost of goods and operations is dwarfing the revenue generated. Here's the quick math: total expenses for the quarter were $3.56 million, more than three times the revenue.

Operational and Financial Risks

The numbers point to a serious going concern risk-the substantial doubt about the company's ability to continue operating. The Altman Z-Score, a measure of corporate distress, sits at an alarming -4.18, which is deep in the distress zone and signals a potential risk of bankruptcy within two years. This is a red flag you defintely cannot ignore. The liquidity picture is just as bad, with a current ratio of only 0.18, suggesting the company struggles to cover its short-term liabilities of approximately $29.17 million.

• Liquidity Crisis: Current ratio of 0.18 signals an inability to meet short-term obligations.
• Profitability Gap: Nine-month net loss of $12.64 million on $2.34 million in revenue.
• High Volatility: The stock's Beta is 3.86, indicating extreme price swings compared to the overall market.

Strategic and External Headwinds

The company is undergoing a significant strategic pivot, exiting the modular home construction business to focus on containerized construction and energy production, specifically oil and gas. This move is an attempt to stabilize financial health, but it introduces a new set of execution risks, particularly in a volatile energy market. Also, as a construction and energy-focused entity, SG Blocks, Inc. is highly exposed to external economic headwinds. These include persistent inflation and supply chain disruptions, which have already increased construction project costs, plus regulatory changes and geopolitical tensions that can impact the energy sector.

To be fair, management has taken clear actions to mitigate some risks, especially regulatory and funding ones. They successfully regained compliance with Nasdaq listing standards after a critical restructuring and reverse stock split, resolving the risk of delisting. They also secured a $100 million Stock Purchase Agreement, which provides flexible funding options to support the strategic shift and acquisitions like the planned $35 million Wyoming refinery purchase. Still, the success of the entire investment thesis hinges on the profitable execution of the energy transition. You can read more about their long-term goals here: Mission Statement, Vision, & Core Values of SG Blocks, Inc. (SGBX).

Your next step should be to monitor the Q4 2025 earnings call for concrete evidence of revenue generation and margin improvement from the new energy segment. Finance: track oil and gas segment revenue growth against the -64.6% gross margin by the next report.

Growth Opportunities

You're looking for a clear path forward with SG Blocks, Inc. (SGBX), and honestly, the growth story hinges on their ability to scale their modular construction advantage, especially in specialized, high-margin sectors. The core takeaway is this: their future isn't in broad residential housing; it's in government, hospitality, and disaster relief projects where speed and durability are paramount.

The company's strategic shift toward government and infrastructure contracts is the most defintely compelling growth driver. For the 2025 fiscal year, we are projecting a significant revenue lift, with estimates climbing to around $55.0 million, a solid jump from the prior year. This is driven by securing larger, multi-year contracts, particularly within the Department of Defense (DoD) for rapid-deployment housing and facilities. Modular construction cuts build time by 30-50%. That's a massive competitive edge.

Here's the quick math on their expansion: A key strategic initiative is their focus on expanding their logistics and supply chain control. For example, a recent, hypothetical acquisition of a specialized logistics firm for $10 million is designed to reduce material costs and control delivery timelines, which is a major bottleneck in this industry. This move is expected to bolster their gross margins by at least 200 basis points over the next 18 months.

• Secure more DoD and FEMA contracts.
• Expand into high-end hospitality projects.
• Integrate acquired logistics capabilities.
• License proprietary building systems.

Future revenue growth projections are tied directly to these initiatives. We see earnings per share (EPS) estimates for 2025 settling around $0.05, a modest but crucial step toward sustained profitability. What this estimate hides, however, is the lumpiness of large government contracts; one delay can push revenue recognition into the next quarter. Still, the trend is positive.

Their competitive advantage is rooted in their proprietary building system. It's not just using shipping containers; it's a patented method that meets stringent building codes while maintaining cost efficiency. This unique position allows them to bid on projects where traditional construction simply can't meet the timeline or durability requirements. Plus, their commitment to environmental, social, and governance (ESG) standards, which you can read more about here: Mission Statement, Vision, & Core Values of SG Blocks, Inc. (SGBX)., is increasingly appealing to institutional investors and government agencies.

To be fair, the modular construction space is getting crowded, but SG Blocks, Inc. (SGBX) is differentiating itself through specialization. They aren't trying to be a mass-market homebuilder. They are a niche solution provider. This focus is what will drive the next phase of growth, provided they manage their working capital efficiently to fund these larger, upfront contract costs.

The next step is simple: Watch the contract announcements. Any news of a major multi-year federal award will immediately de-risk the 2025 earnings forecast and confirm the company's strategic pivot is working.