Recommendation: Speculative Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Potential Upside* |
|---|---|---|---|---|---|---|---|
| 21 Mar, 25 | WKEY | Speculative Buy | USD 4.25 | USD 4.5 | USD 4.7 | 3 days | 10.6% |
*Potential Upside (%) indicates the expected percentage increase from the Entry Price to the Target 2 Price.
Data Powered by EOD Historical Data (“EODHD”).
WISeKey International Holding AG, a cybersecurity company, provides integrated security solutions in Switzerland, rest of Europe, the Middle East, Africa, North America, the Asia Pacific, and Latin America. The company operates in two segments, IoT and Managed Public Key Infrastructure (mPKI). It offers microcontrollers that provides identity to various connected devices; and mPKI, which include digital identity, certificate management and signing solutions, and trust services, as well as offers digital certificates; software as a service, including cloud-based certificate life-cycle-management and signing and authentication solutions; software licenses; post-contract customer support for cybersecurity applications; and infrastructure hosting and monitoring services. The company also develops, markets, hosts, and supports a range of solutions that enable secure digital identification of people, content, and objects by generating digital identities through its products and services in cybersecurity services, IoT, digital brand management, and mobile security, which enable clients to monetize their existing user bases, as well as expand its eco-system. In addition, it engages in financing, sales, and distribution activities; and sells semiconductors secure chips. The company was founded in 1999 and is headquartered in Zug, Switzerland.
Expansion in Blockchain and Digital Assets – WISeKey’s Web 3.0 platform, WISe.ART, now holds over $32 million in digitalized assets, showcasing growth in the NFT and blockchain sector
Strong Cash Position – The company reported $26.3 million in cash and cash equivalents as of June 30, 2024, a significant increase from $15.3 million at the end of 2023. This strengthens liquidity and provides flexibility for future investments
Increased Operating Loss – The company's operating loss surged by 140%, from $5.9 million in H1 2023 to $14.1 million in H1 2024, driven by lower revenue and increased R&D expenses
Revenue Decline – The company’s revenue for H1 2024 was $5.2 million, a sharp 66% decrease compared to $15.1 million in H1 2023. This decline is primarily due to lower semiconductor sales as clients deplete existing inventory
Key investment risks for WISeKey include reliance on semiconductor sales amidst industry fluctuations, the uncertain adoption rate of its blockchain and quantum-resistant technologies, high R&D expenditures impacting short-term profitability, and regulatory challenges in cybersecurity and digital identity markets
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 4.25 | 3.91 | 4.5 | 4.7 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Strategic Progress and Business Transformation
WISeKey International Holding Ltd. has made significant strides in the first half of 2024, demonstrating a clear commitment to technological innovation and sustainable business growth. The company continues to refine its strategy to transition towards a recurring revenue model while maintaining a strong focus on operational efficiency. By leveraging its diverse technological capabilities, WISeKey aims to strengthen its market position in key industries such as cybersecurity, blockchain, and semiconductor technology.
Corporate Structure and Subsidiary Development
Operating as a holding company, WISeKey oversees several specialized subsidiaries, each dedicated to distinct technological domains. These subsidiaries include SEALSQ Corp, a leader in semiconductor and post-quantum technology; WISeSAT.Space, which focuses on satellite communications; WISe.ART, a blockchain-based NFT platform; SEALCOIN AG, which develops decentralized infrastructure networks; and WISeID, specializing in digital identity and authentication services. This structured approach allows the company to optimize resource allocation and capitalize on cross-sector synergies.
Technological Advancements and Strategic Alliances
During the first half of the year, WISeKey expanded its partnerships to enhance the capabilities of its subsidiaries. A notable development was the strategic agreement between WISeSAT and the Swiss Army, paving the way for the launch of a specialized satellite in early 2025. Additionally, the installation of a WISeSAT antenna at the Swiss Federal Institute of Technology Lausanne (EPFL) is expected to facilitate advanced communication testing. Such collaborations reinforce the company’s position as a leader in secure satellite communications and digital infrastructure.
Blockchain Expansion and Digital Asset Innovation
WISeKey has continued to enhance its Web 3.0 platform, WISe.ART, which now encompasses digitalized assets valued at over $32 million. Furthermore, the company has launched SEALCOIN AG as a dedicated decentralized infrastructure project, supported by a strategic partnership with Hedera. SEALCOIN is designed to integrate WISeKey’s semiconductor technology with Hedera’s blockchain framework, enabling secure digital authentication and data exchange. These initiatives highlight the company’s commitment to advancing blockchain technology across multiple sectors.
Quantum-Resistant Technology and Future Readiness
Significant progress has also been made in the field of post-quantum cryptography. SEALSQ introduced its next-generation quantum-resistant security chips, QS7001 and QVault TPM, with production scheduled for the fourth quarter of 2024. Engineering samples of the QS7001 chip are already in development and are expected to be available for order later this year. These advancements position WISeKey at the forefront of cybersecurity, ensuring its technology remains resilient against emerging cyber threats.
Financial Outlook and Growth Strategy
Despite a temporary slowdown in semiconductor sales due to inventory adjustments across the industry, WISeKey remains well-positioned for long-term revenue growth. The company is actively engaging with funding sources within the space and cybersecurity sectors to support its ongoing expansion. Looking ahead, WISeKey anticipates a steady increase in demand for its cybersecurity solutions, blockchain applications, and IoT security services. By aligning its technological innovations with market needs, the company is poised to deliver substantial value to shareholders over the coming years.
Commitment to Innovation and Market Leadership
As WISeKey advances towards its long-term strategic objectives, its emphasis on technological leadership, strategic partnerships, and operational efficiency remains unwavering. The company’s robust investment in cutting-edge technologies, coupled with its diversified subsidiary portfolio, ensures that it continues to be a dominant player in the evolving digital landscape. With a strong foundation in place, WISeKey is committed to securing a sustainable future while delivering meaningful growth and innovation across its business sectors.
Considering recent key business, financial updates, current trading levels, and key business risks, a ‘Speculative Buy’ recommendation has been given on WISeKey International Holding Ltd (NASDAQ: WKEY) at the closing market price of USD 4.25, as on March 20, 2025.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Technology Industry: Semiconductors
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| WKEY Wisekey International Holding AG |
-0.04 1.02% | 3.89 | - | - | 0.75 | 0.80 | 0.58 | -1.3541 |
| NVDA NVIDIA Corporation |
0.72 0.66% | 109.10 | 62.11 | 36.76 | 36.43 | 51.65 | 36.19 | 61.96 |
| AVGO Broadcom Inc |
-0.18 0.11% | 167.25 | 139.68 | 28.99 | 17.14 | 12.73 | 19.13 | 40.92 |
| TSM Taiwan Semiconductor Manufacturing |
2.36 1.42% | 168.36 | 19.45 | 15.92 | 0.24 | 4.85 | 0.22 | 0.30 |
| AMD Advanced Micro Devices Inc |
-0.835 0.81% | 101.91 | 244.65 | 48.78 | 11.64 | 4.72 | 11.51 | 62.93 |
Data Powered by EOD Historical Data (“EODHD”).
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is March 20,2025. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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