Digimarc Corporation Common Stock (DMRC)

FairStock Score: 50/100 — MIXED

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I look for businesses that earn good returns on capital, generate cash, and sell at a sensible price. Digimarc fails most of those tests today. In the quarter ended 2026-06-30, fiscal Q2 2026, revenue was $7.4 million and net loss was $12.1 million, or -$0.54 diluted EPS. A year earlier, in the quarter ended 2025-06-30, revenue was $8.0 million and net loss was $8.2 million, or -$0.38 diluted EPS. Sales fell while losses widened. Trailing free cash flow is -$5.3 million, a -3.7% FCF yield. FairStock's calculations show -82.86% ROE, -37.68% ROCE, P/B of 4.80, and a negative P/E, so the $6.29 close on 2026-10-13 is not backed by profits. The balance sheet has low debt-to-equity of 0.16, but Piotroski 2/9 and Altman Z -7.70 warn of financial weakness. Digimarc's anti-counterfeiting and digital identity tools may have switching costs, but with 110 employees, shrinking revenue, and a -163.97% net margin in the latest quarter, I see no proven moat or pricing power. The stock trades within a 52-week range of $4.07 to $17.47, and Beta 2.29 suggests a speculative quote. FairStock score 50/100 is neutral at best. The Lynch category is none because only 0 years of filed annual results meet its three-year threshold. Without a path to positive earnings and cash flow, this is a speculative turnaround, not a Graham bargain.

In plain English: Digimarc makes software and digital tags that help companies prove products are real and track them. The business looks weak right now: sales shrank and losses grew in the latest reported quarter, and it is using more cash than it brings in. At $6.29, the shares look expensive compared with today's shrinking sales and losses, because there is little profit to support the price.

The full AI analysis, bull and bear case and key monitorables are in FairStock Pro.

Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer