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Verdict
Quantitative factor alignment verified for current market regime.
Quant Score
Rank
#3324
Positioning
Market Dominance
Manufacturing
Electronic Equipment
$59M
Urban Forssell
Neonode Inc. develops optical sensing solutions for contactless touch, touch, and gesture sensing. It also offers software solutions for scene analysis using advanced machine learning algorithms to detect and track persons and objects in video streams for cameras and other types of imagers. Neonode sells Neonode branded sensor products, such as AirBar products through distributors.
Headcount
50
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X-AXIS: EV/EBITDA (LOWER = CHEAPER) | Y-AXIS: ROE (HIGHER = ELITE) | RED CIRCLE = NEON ANALYSIS TARGET
| Stock | Rating | Score▼ | Quality | Value | Momentum | P/E | EV/EBITDA | ROE | ROA | Gross Mgn | Op Mgn | Net Mgn | Rev Growth | Div Yield | D/E | Mkt Cap | AUDIT |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
$UL UNILEVER PLC | 78 | 96 | 98 | 59 | - | - | 28.5% | 8.0% | 100.0% | 100.0% | 10.4% | -4.6% | 3.3% | 0.0x | $141.8B | VS | |
$ASML ASML HOLDING NV | 77 | 89 | 86 | 83 | - | - | 46.1% | 16.6% | 51.3% | 31.9% | 26.8% | -4.0% | 1.0% | 25.0x | $272.1B | VS | |
$ESLT ELBIT SYSTEMS LTD | 76 | 81 | 87 | 85 | - | - | 10.3% | 3.1% | 24.1% | 7.2% | 4.7% | 14.3% | 0.8% | 25.0x | $11.4B | VS | |
$MT ArcelorMittal | 75 | 71 | 98 | 85 | - | - | 2.2% | 1.5% | 9.3% | 5.3% | 2.2% | -8.5% | 2.2% | 16.0x | $18.9B | VS | |
$AMAT APPLIED MATERIALS INC /DE | 75 | 85 | 87 | 84 | 20.9x | 13.6x | 35.5% | 19.8% | 48.7% | 29.2% | 24.7% | 4.4% | 0.8% | 32.0x | $181.9B | VS | |
$SIMO Silicon Motion Technology CORP | 75 | 84 | 86 | 85 | - | - | 11.8% | 8.8% | 45.9% | 11.3% | 11.1% | 25.7% | 3.7% | 0.0x | $1.8B | VS | |
$CODA Coda Octopus Group, Inc. | 74 | 83 | 90 | 79 | 16.3x | 11.9x | 7.6% | 7.0% | 66.5% | 17.1% | 15.6% | 39.0% | 0.0% | 0.0x | $115M | VS | |
$GSK GSK plc | 74 | 84 | 90 | 70 | - | - | 22.6% | 4.9% | 71.2% | 12.8% | 9.4% | 1.7% | 5.9% | 124.0x | $72.1B | VS | |
$EFXT Enerflex Ltd. | 74 | 80 | 91 | 83 | - | - | 3.0% | 1.1% | 20.9% | 7.3% | 1.3% | 3.0% | 0.9% | 67.0x | $1.2B | VS | |
$BUD Anheuser-Busch InBev SA/NV | 74 | 84 | 97 | 63 | - | - | 8.2% | 3.5% | 55.3% | 25.9% | 12.4% | 0.7% | 1.7% | 0.0x | $87.0B | VS | |
$NEON Neonode Inc. | 42 | 65 | 84 | 6 | 3.1x | 3.3x | 35.4% | 28.9% | 98.1% | 582.5% | 629.8% | -69.8% | 0.0% | 22.0x | $59M | ||
| SECTOR BENCH | - | - | - | - | - | 22.3x | 11.5x | -2.5% | -0.1% | 42.5% | 1.3% | -0.2% | 5.9% | 0.0% | 0.2x | - | REF |
Neonode Inc. (NEON) receives a "Reduce" rating with a composite score of 41.7/100. It ranks #3324 out of 7,333 stocks in our coverage universe and carries a 2-star rating. Ratings are driven by a 6-factor quantitative model measuring quality, value, momentum, investment, stability, and short interest.
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YOY expansion rate
Core pricing power
Operating efficiency
Bottom-line conversion
Equity capital efficiency
Asset base utilization
Financial leverage load
Direct cash return
Urban Forssell
Chief Executive Officer
Labor Force
50
65
31
33
Audit Verdict: Lower quality and stability scores may indicate governance concerns.
No recent insider transactions available for NEON
HQ Base
STOCKHOLM,
Lagging peers — losers tend to keep underperforming
Trading at a discount to fundamentals — favorable entry valuation
High profitability & efficiency — strong quality floor supports entry
High volatility — wider range of outcomes increases timing risk
Aggressive spending — empire-building risk, dilutive growth
Mid-range overall rating
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Relative valuation derived from Manufacturing sector benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Re-calculated daily.
Projection based on user-defined inputs. Re-calculated daily against current market data.
Reverse DCF Framework — Mauboussin Methodology
Institutional-grade Reverse DCF analysis. This model identifies the growth hurdles embedded in current market prices. When implied growth is significantly lower than historical or projected rates, a margin of safety may exist. Re-audited daily.
No analyst ratings for NEON.
View All RatingsMaterial decline in asset turnover efficiency detected
High margin volatility — erratic forensic earnings quality
ROE proxy 35.4% (sector -2.5%)
GM 98% vs sector 43%, OM 583% vs sector 1%
Capital turnover N/A, R&D intensity 184.4%
Rev growth -70%, 10yr history
Interest coverage N/A, Net debt/EBITDA -0.8x
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation and elite competitive moats.
Profit generated per dollar of shareholder equity
Efficiency of asset utilization
Pricing power and cost efficiency
Core business profitability
Bottom-line profitability
The Quality factor evaluates the persistence and magnitude of realized cash flows. Companies with scores >70 exhibit superior pricing power and structural financial resilience through diverse economic regimes.
Our uncertainty rating tracks the predictability of future cash flows and potential for permanent capital loss. Moderate visibility with standard industry cyclicality.
Neonode Inc. receives a Reduce rating from our analysis, with a composite score of 41.7/100 and 2 out of 5 stars, ranking #3324 out of 7,333 stocks. NEON's factor profile shows weakness across multiple dimensions, suggesting the stock may underperform going forward. Existing holders may want to consider trimming positions or tightening stop-losses.
NEON earns a quality score of 65/100, indicating above-average business quality. The company reports a return on equity of 35.4% (sector avg: -2.5%), gross margins of 98.1% (sector avg: 42.5%), net margins of 629.8% (sector avg: -0.2%). Companies in this tier generally demonstrate consistent profitability and efficient capital deployment, though they may face some competitive pressure.
NEON carries a solid value score of 84/100, pointing to an attractively priced stock relative to peers. Key valuation metrics include a P/E ratio of 3.06x, an EV/EBITDA of 3.32x, a P/B ratio of 1.08x. This score suggests reasonable compensation for the risks involved, with potential upside if the market recognizes the stock's underlying worth.
Neonode Inc.'s investment score of 31/100 suggests limited reinvestment activity. Key growth metrics include revenue growth of -69.8% vs. a sector average of 5.9% and a return on assets of 28.9% (sector: -0.1%). While this can be positive for mature, cash-generative businesses returning capital to shareholders, it may also signal a lack of growth opportunities or management conservatism.
Neonode Inc. is experiencing notably weak momentum with a score of just 6/100. The stock has underperformed its peers and is trending below major moving averages. Revenue growth stands at -69.8% year-over-year, while a beta of 0.85 reflects its sensitivity to broader market moves. While deep momentum weakness can occasionally present value opportunities, it often reflects deteriorating fundamentals or structural headwinds that may persist.
NEON's stability score of 33/100 signals elevated volatility and/or leverage concerns. Key stability metrics include a beta of 0.85 and a debt-to-equity ratio of 22.00x (sector avg: 0.2x). Investors should be prepared for wider-than-average price swings and consider position sizing accordingly to manage portfolio risk.
Neonode Inc.'s short interest score of 24/100 reveals significant bearish positioning, suggesting institutional investors are actively betting against the stock. Specific risk factors include elevated leverage (D/E: 22.00x), micro-cap liquidity risk. At $59M (micro-cap), NEON carries meaningful risk and is best suited for investors with high risk tolerance who have thoroughly evaluated the bear thesis.
Neonode Inc. is a micro-cap company in the Manufacturing sector, ranked #0 of 50 in its sector (100th percentile) and #3324 of 7,333 overall (55th percentile). Key comparisons include ROE of 35.4% exceeding the -2.5% sector median and operating margins of 582.5% above the 1.3% sector average. This top-quartile standing reflects exceptional competitive strength relative to Manufacturing peers.
While NEON currently exhibits a REDUCE profile, superior opportunities exist within the MANUFACTURING sector. Our model identifies several "Strong Buy" candidates with higher quality scores and more attractive valuations among direct industry competitors.
View Top Manufacturing Alpha →Quant Factor Profile
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Improvement in Momentum (6) would have the largest impact on the composite score.
EV/EBITDA 71% BELOW SECTOR MEDIAN (FAVORABLE)
ROE 1529% BELOW SECTOR MEDIAN
Gross Margin 131% ABOVE SECTOR MEDIAN (FAVORABLE)
AUDIT DATA AS OF SEP 30, 2025 (Q2 FY2025)
We rate Neonode Inc. (NEON) as a Reduce with a composite score of 41.7/100 at a current price of $1.75. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential and elevated risk of underperformance relative to peers over the next 12 months.
The rating is primarily driven by strength in value (84th percentile) and quality (65th percentile), which together account for the majority of the composite score. Offsetting weakness in momentum (6th percentile) and investment (31th percentile) tempers our overall conviction. We assign a Narrow Moat rating (51/100), Medium uncertainty, and Exemplary capital allocation.
Key items to watch: momentum to confirm whether the current price trend has legs. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.
Neonode Inc. holds a top-quartile position (#0 of 50) within the Manufacturing sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 41.7/100 places it at rank #3324 in our full 7,333-stock universe. At $59M in market capitalization, Neonode Inc. is a small-cap player in the Manufacturing space, which limits certain scale advantages but may allow for more agile strategic execution.
Revenue contraction of -70% combined with momentum at the 6th percentile paints a cautious picture of the near-term business outlook. The market appears to be pricing in continued challenges, and a catalyst for reversal is not clearly visible from current data.
The margin cascade tells an important story: gross margins of 98% (+55.6pp vs sector) narrow to operating margins of 583% (+581.3pp vs sector) and net margins of 629.8%, yielding a gross-to-net conversion rate of 642%. This efficient conversion suggests well-controlled operating costs and limited margin leakage between the gross and net levels.
At a current price of $1.75, Neonode Inc. appears undervalued relative to its fundamentals. Our value factor score of 84/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. The stock screens as attractively priced on a majority of these measures, suggesting the market may be underappreciating the underlying fundamentals.
The stock currently trades at a P/E of 3.1x (a 86% discount to the sector median of 22.3x), EV/EBITDA of 3.3x (discounted to peers), P/B of 1.1x, P/S of 12.2x. The below-sector P/E suggests possible undervaluation or the market pricing in near-term headwinds.
Gross margins of 98% signal strong pricing power and brand/IP advantages — businesses with margins above 40% have historically demonstrated more resilient earnings through economic cycles.
Returns on equity of 35.4% exceed the cost of equity for most companies, indicating genuine shareholder value creation and a reinvestment engine that compounds wealth over time.
A value factor score of 84/100 suggests the market is underpricing these fundamentals, creating a potential margin of safety for new investors.
A conservative balance sheet (22% D/E) provides financial flexibility for acquisitions, buybacks, or weathering economic downturns without dilution.
Return on assets of 28.9% indicates efficient deployment of the full asset base, not just equity capital.
The Reduce rating (composite 41.7/100) reflects multi-factor weakness, and historically, stocks in this scoring range have underperformed the market by a meaningful margin.
We assign a Medium uncertainty rating to Neonode Inc.. The stock presents a balanced risk profile: below-average price stability (33th percentile). While not risk-free, the core business fundamentals are adequate to withstand moderate economic stress, and the range of potential outcomes around our fair value estimate is manageable.
Specific risk factors that inform our assessment include: below-average price stability (33th percentile). Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 33th percentile and quality factor at the 65th percentile provide a quantitative summary of the overall risk landscape.
Key risk mitigants include: healthy gross margins of 98% provide a buffer against cost pressures; conservative leverage (22% D/E) limits balance sheet risk. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.
We rate Neonode Inc.'s capital allocation as Exemplary. Management demonstrates a strong track record of balancing reinvestment with shareholder returns, evidenced by returns on equity of 35.4%, disciplined leverage (22% D/E), best-in-class net margins of 629.8%. Exemplary allocators typically generate returns on equity above 20% while maintaining debt-to-equity below 50% — Neonode Inc. meets this high bar.
The balance sheet remains conservatively managed, providing financial flexibility for opportunistic investments while maintaining a margin of safety for shareholders. We note that the combination of 28.9% return on assets and controlled leverage suggests management is deploying capital at rates well above the cost of capital — the hallmark of exemplary stewardship.
In summary, Neonode Inc. receives a Reduce rating with a composite score of 41.7/100 (rank #3324 of 7,333). Our quantitative framework assigns a Narrow Moat (51/100, trend: stable), Medium uncertainty, and Exemplary capital allocation. The average factor score across quality, value, momentum, stability, and investment is 44/100.
Our analysis does not support a constructive view on Neonode Inc. at this time. The combination of the current quantitative profile, medium uncertainty, and exemplary capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.
Analysis derived from Blank Capital Research quantitative terminal. For informational purposes only. No trade solicitation. Past performance not indicative of future results. Consult a qualified advisor.
We assign Neonode Inc. a Narrow Moat rating with a composite moat score of 51/100. The company possesses identifiable competitive advantages, though they are less entrenched than those of wide-moat peers. Our analysis indicates that Neonode Inc. can sustain above-average returns on invested capital for at least 10 years, with the strongest contributor being margin superiority at 17.2/20.
The strongest moat sources are margin superiority (17.2/20) and economic value creation (16.2/20). GM 98% vs sector 43%, OM 583% vs sector 1%. ROE proxy 35.4% (sector -2.5%). These pillars form the core of Neonode Inc.'s competitive identity and are the primary drivers of excess returns in our framework.
Areas of relative weakness include growth durability (3.7/20) and reinvestment efficiency (7/20). Rev growth -70%, 10yr history. Improvement in these areas could meaningfully widen the moat over time, while deterioration would be an early warning of competitive erosion.
Our moat trend assessment is Stable. Multi-year ROIC and operating margin trajectories show neither meaningful improvement nor deterioration, suggesting the competitive position is steady. We expect Neonode Inc.'s moat profile to remain largely unchanged absent a material shift in return on capital or industry dynamics.
Key profit drivers include gross margins of 98% providing a solid profitability foundation, operating margins of 583% reflecting effective cost management, declining revenues (-70%) that pressure the earnings outlook. The margin cascade from 98% gross to 583% operating to 629.8% net reveals the company's cost structure and reinvestment intensity. Our analysis indicates that the profit engine is high-quality and likely sustainable, with the quality factor at the 65th percentile.
The margin profile shows gross margins of 98%, operating margins of 583%, net margins of 629.8%. Return metrics include ROE of 35.4% and ROA of 28.9%. Relative to the Manufacturing sector, gross margins are 55.6 percentage points above the sector median of 43%, and ROE of 35.4% compares to a sector median of -2.5%.
The balance sheet reflects a conservatively managed balance sheet with D/E of 22%, revenue growth of -70%. The sector median D/E is 0%, putting Neonode Inc. at higher leverage than the typical peer. The combination of low leverage and healthy profitability provides significant financial resilience and strategic optionality.
Revenue decline of -70% signals business deterioration — declining revenues make it difficult to grow into the current valuation and often precede further negative revisions.
Weak momentum (6th percentile) suggests institutional selling pressure and unfavorable technical dynamics that may persist.
Above 50MA
37.18%
Net New Highs
+51081
Neonode Inc. (NASDAQ: NEON) announced the appointment of Marec Gasiun as Executive Vice President of Sales & Marketing, effective January 1, 2026. Gasiun brings extensive global commercial leadership experience from roles at SeeReal Technologies, Telia Company, and Google. The appointment comes as Neonode successfully converted a commercial vehicle design win into a production license agreement in December 2025, marking the deployment of its MultiSensing driver monitoring technology in commercial vehicles. CEO Daniel Alexus stated the company is positioned to accelerate automotive momentum through new design wins and strategic partnerships.
The healthy profit announcement from Neonode Inc. ( NASDAQ:NEON ) didn't seem to impress investors. We think that they...
Neonode Inc. announced that Peter Kruk has joined the company's Board of Directors. Kruk currently serves as the CEO and a board member of NCAB Group AB, and brings extensive experience as a leader in global industrial companies.
Neonode reported Q2 2025 revenue of $0.60 million, a 25.2% year-over-year decline, with continued challenges in legacy business lines and ongoing efforts to expand licensing opportunities in automotive and technology markets.
Neon One, the nonprofit software platform built to empower communities of generosity, today announced the appointment of Paul Rosenfeld as Chief Marketing Officer. The move underscores Neon One's continued investment in helping small and midsize nonprofits build stronger relationships through technology that is powerful, practical, and human-centered.