Immersion Corporation Net Income surged on 127% and EBITDA Margin surged on 67.8 pp from -50.4% to 17.4%
03/04/2021 • About Immersion Corporation (
$IMMR) • By InTwits
Immersion Corporation reported 2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Immersion Corporation is a company in decline: 2020 revenue growth was -15.3%, 5 years revenue CAGR was -13.6%
- Immersion Corporation spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for 2016-2020 is 0.0%. Average EBITDA Margin for the same period was -6.6%
- Immersion Corporation has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.3%.
- The company has potentially unprofitable business model: ROIC is 2.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue dropped on 15.3%. Annual revenue decline showed slowdown in 20Q4 - revenue decreased on 4.6%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin surged on 67.8 pp from -50.4% to 17.4% in 2020.
Gross Margin showed almost no change in 2020. SG&A as a % of Revenue dropped on 61.7 pp from 137% to 75.7% in 2020.
Net Income margin jumped on 73.5 pp from -55.8% to 17.7% in 2020.
Investments (CAPEX, working capital and M&A)
In 2020 Immersion Corporation had CAPEX/Revenue of 0.15%. CAPEX/Revenue showed almost no change from 2017 to 2020. It's average CAPEX/Revenue for the last three years was 0.21%.
Return on investment
The company operates at low ROIC (2.9%) and ROE (7.3%). ROIC surged on 25.8 pp from -22.9% to 2.9% in 2020. ROE jumped on 29.2 pp from -21.9% to 7.3% in 2020.
Leverage (Debt)
Debt level is -10.7x Net Debt / EBITDA and 0.6x Debt / EBITDA. Debt dropped on 19.8% while cash dropped on 31.2%.
Immersion Corporation has no short term refinancing risk: cash is higher than short term debt (4,306.9%).
Valuation and dividends
The company's trades at EV/EBITDA 52.4x and P/E 61.8x.
Management team
Immersion Corporation's CEO is Jared Smith. Jared Smith has 2 years tenure with the company. The company's CFO is Aaron Akerman. Aaron Akerman has 1 year tenure at the company.
Financial and operational results
FY ended 12/31/2020
Immersion Corporation ($IMMR) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 57.1 | 35.0 | 111.0 | 36.0 | 30.5 | -15.3% |
| Gross Profit | 56.9 | 34.8 | 110.8 | 35.8 | 30.3 | -15.4% |
| SG&A | 58.8 | 66.9 | 47.9 | 49.4 | 23.1 | -53.3% |
| EBITDA | -14.4 | -44.5 | 54.0 | -18.1 | 5.3 | |
| Net Income | -39.4 | -45.3 | 54.3 | -20.0 | 5.4 | |
Balance Sheet
|
|---|
| Cash | 56.9 | 24.6 | 111.0 | 86.5 | 59.5 | -31.2% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 1.2 | 1.4 | 20.2% |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 2.7 | 1.7 | -37.0% |
Cash flow
|
|---|
| Capex | 0.3 | 0.1 | 0.1 | 0.2 | 0.0 | -68.7% |
Ratios
|
|---|
| Revenue growth | -9.9% | -38.7% | 217.0% | -67.6% | -15.3% | |
| EBITDA growth | -350.3% | 209.7% | -221.4% | -133.6% | -129.2% | |
|
|---|
| Gross Margin | 99.7% | 99.4% | 99.8% | 99.5% | 99.4% | -0.1% |
| EBITDA Margin | -25.1% | -127.0% | 48.6% | -50.4% | 17.4% | 67.8% |
| SG&A, % of revenue | 102.9% | 191.0% | 43.2% | 137.4% | 75.7% | -61.7% |
| Net Income Margin | -69.0% | -129.4% | 49.0% | -55.8% | 17.7% | 73.5% |
| CAPEX, % of revenue | 0.6% | 0.4% | 0.1% | 0.4% | 0.2% | -0.3% |
|
|---|
| ROIC | -21.5% | -138.9% | 96.8% | -22.9% | 2.9% | 25.8% |
| ROE | -55.5% | -139.4% | 99.4% | -21.9% | 7.3% | 29.2% |
| Net Debt/EBITDA | | | -2.1x | | -10.7x |
Immersion Corporation ($IMMR) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 6 | 6 | 8 | 11 | | 22.2% | -35.2% | -28.5% | -4.6% |
| EBITDA | -3 | -1 | 3 | 6 | | - | - | - | 145.7% |
| Net Income | -5 | -1 | 3 | 8 | | - | - | - | 725.9% |
Balance Sheet
|
|---|
| Cash | 76 | 54 | 56 | 60 | | -25.7% | -41.6% | -35.4% | -31.2% |
| Short Term Debt | 1 | 1 | 1 | 1 | | 22.1% | 20.2% | 19.6% | 20.2% |
| Long Term Debt | 3 | 2 | 2 | 2 | | -23.0% | -27.5% | -31.1% | -37.0% |
Ratios
|
|---|
| Gross Margin | 99.3% | 98.9% | 99.6% | 99.7% | | -0.4% | -0.6% | 0.2% | 0.2% |
| EBITDA Margin | -49.5% | -9.9% | 37.4% | 52.9% | | 165.8% | 89.4% | 44.8% | 32.3% |
| Net Income Margin | -77.2% | -12.6% | 37.6% | 73.9% | | 137.9% | 86.0% | 50.6% | 65.4% |
Peers in Technology Hardware, Storage & Peripherals
Below we provide Immersion Corporation benchmarking against other companies in Technology Hardware, Storage & Peripherals industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Ionix Technology Inc ($IINX) | - | 246.0% | -5.8% | 92.3% | 66.8% |
| Veritec Inc ($VRTC) | - | -52.2% | 53.1% | -38.5% | 42.9% |
| Pure Storage, Inc. ($PSTG) | - | 67.9% | 38.6% | 32.7% | 20.9% |
| USA Technologies, Inc. ($USAT) | - | 34.5% | - | - | 12.9% |
| CPI Card Group Inc. ($PMTS) | - | -17.4% | 0.4% | 8.7% | 12.3% |
| |
|---|
| Median (20 companies) | 1.4% | 2.1% | 4.3% | -2.0% | -8.8% |
|---|
| Immersion Corporation ($IMMR) | - | -38.7% | 217.0% | -67.6% | -15.3% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Datasea Inc ($DTSS) | - | 39.3% | 54.4% | - | 89.7% |
| Pure Storage, Inc. ($PSTG) | 61.9% | 65.9% | 65.5% | 66.4% | 69.0% |
| Avid Technology, Inc. ($AVID) | 65.0% | 57.8% | 57.9% | 60.5% | 63.3% |
| Socket Mobile, Inc. ($SCKT) | 50.2% | 53.5% | 51.4% | 52.5% | 53.1% |
| Veritec Inc ($VRTC) | 52.6% | 19.9% | 50.4% | 25.0% | 52.1% |
| |
|---|
| Median (21 companies) | 38.5% | 38.9% | 38.3% | 32.7% | 37.4% |
|---|
| Immersion Corporation ($IMMR) | 99.7% | 99.4% | 99.8% | 99.5% | 99.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Apple Inc. ($AAPL) | 32.7% | 31.2% | 30.8% | 29.4% | 28.7% |
| CPI Card Group Inc. ($PMTS) | 14.9% | -0.0% | 9.0% | 15.2% | 17.9% |
| Avid Technology, Inc. ($AVID) | 17.5% | 6.6% | 8.4% | 13.5% | 13.6% |
| Western Digital Corporation ($WDC) | 12.5% | 21.4% | 27.5% | 11.5% | 11.7% |
| NCR Corporation ($NCR) | 14.4% | 16.0% | 8.1% | 15.6% | 11.4% |
| |
|---|
| Median (19 companies) | 4.9% | 4.5% | 7.9% | 7.9% | 7.6% |
|---|
| Immersion Corporation ($IMMR) | -25.1% | -127.0% | 48.6% | -50.4% | 17.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Datasea Inc ($DTSS) | - | 0.0% | 0.0% | - | 20.9% |
| Hewlett Packard Enterprise Company ($HPE) | 10.8% | 10.9% | 9.6% | 9.8% | 8.8% |
| Pure Storage, Inc. ($PSTG) | 8.9% | 10.4% | 6.3% | 7.4% | 5.3% |
| Stratasys, Ltd. ($SSYS) | 6.7% | 3.3% | 3.5% | 3.5% | 5.2% |
| Western Digital Corporation ($WDC) | 4.5% | 3.0% | 4.0% | 5.3% | 3.9% |
| |
|---|
| Median (19 companies) | 2.0% | 1.9% | 2.4% | 2.3% | 2.3% |
|---|
| Immersion Corporation ($IMMR) | 0.6% | 0.4% | 0.1% | 0.4% | 0.2% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| HP Inc. ($HPQ) | 15.8% | 60.8% | 72.9% | 116.0% | 109.2% |
| Apple Inc. ($AAPL) | 27.0% | 23.8% | 28.0% | 29.5% | 33.0% |
| Avid Technology, Inc. ($AVID) | - | - | 252.4% | 42.1% | 30.0% |
| CPI Card Group Inc. ($PMTS) | 12.8% | -9.3% | 2.7% | 15.4% | 20.5% |
| NCR Corporation ($NCR) | 13.9% | 16.3% | 4.6% | 14.3% | 5.5% |
| |
|---|
| Median (21 companies) | 1.8% | 1.6% | 2.2% | 4.2% | 2.0% |
|---|
| Immersion Corporation ($IMMR) | -21.5% | -138.9% | 96.8% | -22.9% | 2.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Diebold Nixdorf Incorporated ($DBD) | - | 8.3x | - | 6.6x | 7.3x |
| CPI Card Group Inc. ($PMTS) | 5.8x | - | 12.4x | 7.2x | 5.2x |
| Hewlett Packard Enterprise Company ($HPE) | 0.4x | 1.2x | 1.6x | 2.6x | 5.2x |
| NCR Corporation ($NCR) | 2.7x | 2.3x | 5.2x | 3.3x | 4.8x |
| Western Digital Corporation ($WDC) | 5.5x | 1.7x | 1.1x | 3.7x | 3.5x |
| |
|---|
| Median (11 companies) | 0.2x | 0.3x | 1.1x | 1.4x | 3.3x |
|---|
| Immersion Corporation ($IMMR) | - | - | -2.1x | - | -10.7x |
