Sono-Tek Corporation Common Stock (SOTK)

FairStock Score: 38/100 — MIXED

Key Financials

Strengths

• Altman Z-Score of 10.2 confirms minimal bankruptcy risk and strong solvency

Concerns

• Trades significantly above Graham Number ($2) with negative 166% margin of safety—limited downside protection
• Revenue declining at 3.6% year-over-year signals potential demand weakness or market share loss
• No meaningful dividend despite modest growth—total return depends entirely on multiple expansion

AI Analysis

Sono-Tek Corporation Common Stock is a micro-cap technology company valued at $69 million. The business generates $20 million in annual revenue with a 1.7% net margin. From a quality standpoint, Sono-Tek shows Altman Z-Score of 10.2 confirms fortress-level solvency and modest 9% ROE. On valuation, the stock is commanding a steep 50.3x multiple, with trades far above its Graham Number ($2) with no margin of safety. Growth dynamics show revenue growing at -3.6% and profit growth of 24.0%. Our composite FairStock Score of 38/100 reflects below-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. Operational leverage in the business model means incremental revenue growth could disproportionately boost bottom-line profitability.

Bear Case

At 50x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer