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ZYBERNO

Stock Report

Updated Aug 22, 2026

AUDIOEYE INC (AEYE)

Technology • NASDAQ

$7.20

Professional Investment Analysis

ZYBERNO SCORE →

Is it a great business? Is it getting better?

34.0/100

WEAK BUSINESS

AUDIOEYE INC (AEYE) scores 34/100 — weak fundamentals with mixed indicators requiring careful analysis before acting.

📊 How is the Zyberno Score calculated? +

The Zyberno Score answers one question: "Is this a quality business worth owning?" It's a 0-100 investment grade that evaluates business fundamentals across four critical dimensions, based on principles from Warren Buffett, Benjamin Graham, Peter Lynch, and Charlie Munger.

The 4 Core Categories (25 points each):

1. PROFITABILITY (25 pts)

Metrics: ROE, ROIC, Net Margin, Operating Margin
Thresholds: ROE >20% excellent • ROIC >20% excellent • Net Margin >20% excellent • Operating Margin >25% excellent

2. FINANCIAL STRENGTH (25 pts)

Metrics: Debt-to-Equity, Current Ratio, Interest Coverage, Altman Z-Score
Thresholds: D/E <0.3 excellent • Current Ratio >2.5 excellent • Interest Coverage >10x excellent • Altman Z >3.0 safe

3. CASH FLOW QUALITY (25 pts)

Metrics: Free Cash Flow, OCF vs Net Income, FCF Margin
Thresholds: Positive & growing FCF excellent • OCF/NI >1.2x excellent (cash earnings exceed accounting)

4. GROWTH & CONSISTENCY (25 pts)

Metrics: Revenue Growth, Net Income Growth, FCF Growth, Piotroski F-Score
Thresholds: Growth via log-linear regression • Piotroski 8-9 excellent, 6-7 good

Score Interpretation:

75-100

GREAT BUSINESS

65-74

GOOD BUSINESS

50-64

AVERAGE BUSINESS

30-49

WEAK BUSINESS

0-29

POOR BUSINESS

→ View full AEYE quality analysis & detailed breakdown

VALUATION SIGNAL

MARGIN OF SAFETY

Is this stock cheap or expensive relative to what the business has historically generated for owners?

+51.7%

Undervalued

Growth gap unavailable — insufficient data for reverse DCF calculation.

🎯 Expected Annual Return →

44.9%

Margin of Safety convergence — your return if the market re-prices to intrinsic value (5-yr annualised)

-0.4%

Yield + growth — what the business alone earns you, even if the market never re-rates

💰 How is Margin of Safety calculated? +

Margin of Safety measures how much discount or premium you're paying relative to a stock's intrinsic value. It's Benjamin Graham's core principle: the larger the margin, the lower your downside risk.

Formula: (Intrinsic Value − Current Price) ÷ Intrinsic Value × 100%

How We Calculate Intrinsic Value (DCF Method):

Step 1: Calculate current Owner Earnings (OCF − Maintenance CapEx)

Step 2: Calculate company-specific growth rate using log-linear regression on 16 quarters of Owner Earnings

Step 3: Project 10 years forward using the calculated growth rate

Step 4: Discount each year's cash flow to present value using 10% discount rate

Step 5: Calculate terminal value using 3% perpetual growth rate

Step 6: Sum all discounted cash flows = Intrinsic Value

What The Percentages Mean:

+50% or more

EXCELLENT — Very undervalued

+25% to +50%

GOOD — Attractive discount

0% to +25%

FAIR — Reasonable value

0% to -25%

CAUTION — Slight premium

-25% or worse

POOR — Overvalued

"Price is what you pay, value is what you get." — Warren Buffett

→ View full AEYE valuation analysis · → View full AEYE Brina Gap analysis

📈 How is Brina Gap calculated? +

Brina Gap measures the difference between the growth a business can fundamentally sustain and the growth the market is already pricing in.

Formula: Fundamental Growth Rate − Market-Implied Growth Rate

The Two Components:

Fundamental Growth Rate = ROIC × Reinvestment Rate

What the business can sustainably grow at based on how much it reinvests and what return it earns on that capital. Grounded in historical financials.

Market-Implied Growth Rate = Reverse DCF

The growth rate the current Enterprise Value implicitly assumes. Calculated by back-solving a 10-year DCF model (10% WACC, 3% terminal growth) until the present value of projected cash flows equals EV.

What The Gap Means:

Gap > +5% Market Underestimates — potential upside

+2% to +5% Slight Underestimate

-2% to +2% Fairly Priced — market consensus matches fundamentals

-5% to -2% Slight Overestimate

Gap < -5% Market Overestimates — price embeds optimism fundamentals don't support

A positive gap (market underestimates) combined with a positive Margin of Safety is the strongest combined signal — the business is both cheap historically and forward economics are stronger than the price suggests.

Critical Financial Health Indicators

Return on Equity (Profitability):CRITICAL (-108.8%)

Debt-to-Equity (Solvency Risk):CRITICAL (5.31x)

Operating Margin (Operational Efficiency):CRITICAL (-8.6%)

Return on Capital (Capital Efficiency):CRITICAL (-18.0%)

📊 Valuation Trilogy

Three interconnected metrics for complete valuation analysis

Click any metric for full methodology and detailed analysis

Zyberno's Verdict

AUDIOEYE INC (AEYE) stock report — Zyberno Score 34/100 (WEAK BUSINESS), Margin of Safety +51.7%, 45% expected annual return. Full financial analysis on Zyberno.

According to Zyberno's DCF model, AUDIOEYE INC (AEYE) trades at $7.20 against an estimated intrinsic value per share of $14.92 — a +51.7% Margin of Safety based on Owner Earnings of $5.99M TTM, projected at 89.2% growth for 10 years with a 2.5% terminal growth rate. Zyberno's model translates this into a 5-year expected return of 44.9% annually.

Over the trailing twelve months, AEYE generated $5.99M in Owner Earnings. Capital was deployed as follows: $68.00K invested in capital expenditures. Reinvestment rate: 48.0%. Owner Earnings have grown at 89.2% annually over the trailing five years using log-linear regression.

DIVISION I: EXECUTIVE SUMMARY

A. Market Valuation

Market Price & Capitalization (2)

Current Price:7.20

Market Cap:$89.92M

Valuation Multiples (3)

P/B Ratio:27.90x

P/S Ratio:2.14x

Peg Ratio:-999.00x

Enterprise Metrics (2)

Enterprise Value:$101.74M

Pfcf Ratio:12.12x

Price Action & Momentum (3)

12-1 Momentum:

-53.8% (8th pctile)

📈 Click to view full AEYE Momentum analysis →

Momentum Percentile:8 / 100

% of 52-Week High:43.9%

B. Profitability Assessment

Return Metrics (5)

ROE:

-108.8%

📊 Click to view full AEYE ROE analysis →

ROA:-13.8%

Roic:

-18.0%

📊 Click to view full AEYE ROIC analysis →

Reinvestment Rate:48.0%

Fundamental Growth Rate (g):-8.7%

Margin Analysis (3)

Operating Margin Ttm:-8.6%

Net Margin Ttm:-10.9%

Ebitda Margin:-6.0%

TTM Performance (3)

Gross Margin Ttm:78.4%

Operating Margin Ttm:-8.6%

Net Margin Ttm:-10.9%

Yield Metrics (3)

Earnings Yield:-$8.43

Owner Earnings Yield:$8.25

Dividend Yield:0.0%

C. Log-Linear Regression Growth Trends

Earnings Surprise (SUE) (3)

Earnings Surprise (SUE):

+0.23

📊 Click to view full AEYE Earnings Surprise analysis →

EPS Surprise vs Expected:24.2%

Latest Earnings Filed:2026-03-12

Revenue Growth (Linear) (1)

Revenue Growth Rate (Linear):11.2%

Cash Flow Growth (Linear) (2)

Free Cash Flow Growth Rate (Linear):89.2%

Operating Cash Flow Growth Rate (Linear):83.1%

D. Financial Stability

Liquidity Ratios (3)

Current Ratio:1.06x

Quick Ratio:1.06x

Cash Ratio:0.57x

Leverage Analysis (3)

Debt To Equity Ttm:5.31x

Debt-to-Equity Ratio:5.31x

Debt To Ebitda:-999.00x

Coverage Ratios (1)

Times Interest Earned:-999.00

Capital Structure (4)

Working Capital:974,000.00

Cash And Cash Equivalents:8,717,000.00

Long Term Debt:$15.57M

Net Debt:$11.82M

DIVISION II: FINANCIAL STATEMENTS ANALYSIS

A. Income Statement Analysis

Revenue Components (2)

Revenue TTM: $41.99M

Linear Growth: 11.2%

📊 Click to view full AEYE Revenue analysis & methodology →

Cost Of Revenue Ttm:$9.09M

Profitability Breakdown (2)

Gross profit TTM: $32.90M

Linear Growth: 11.9%

📊 Click to view full AEYE Gross Profit analysis & methodology →

-$3.61M

Bottom Line Performance (3)

-$4.59M

Income Before Tax:$0.00

Ebitda Ttm:-2,512,198.00

Operating Expenses (5)

Operating Expenses:36,513,000.00

R And D Expense:4,196,000.00

Sga Expense:17,428,000.00

Income Tax Expense:$0.00

Interest Expense:0.00

Expense Ratios (3)

R And D To Revenue Percentage:39.2%

Sga To Revenue Percentage:162.6%

Ebitda Margin:-6.0%

B. Balance Sheet Analysis

Asset Composition (5)

Total Assets:$34.88M

Current Assets:$16.31M

Ppe Net:110,000.00

Goodwill:6,682,000.00

Intangible Assets:$11.44M

Liability Structure (4)

Total Liabilities:31,658,000.00

Current Liabilities:15,331,000.00

Long Term Debt:$15.57M

Short Term Debt:$4.97M

Equity & Capital (3)

Equity:$3.22M

Retained Earnings:-$106.85M

Common Stock:50,000,000.00

Working Capital Items (3)

Accounts Receivable:6,718,000.00

Inventory:0.00

Accounts Payable:4,972,000.00

Special Items (2)

Contract Liabilities:9,394,000.00

Stock Based Compensation:1,141,000.00

C. Cash Flow Analysis

Operating Activities (2)

Operating cash flow TTM: $6.06M

Linear Growth: 83.1%

Free cash flow TTM: $5.99M

Linear Growth: 89.2%

📊 Click to view full AEYE Free Cash Flow analysis & methodology →

Investment Activities (2)

Investing Cash Flow:-$727.00K

Capital Expenditures Ttm:68,000.00

Financing Activities (3)

Financing Cash Flow:$2.74M

Dividends Paid Ttm:0.00

Stock Repurchase:0.00

Capital Transactions (3)

Common Stock Issuance:0.00

Long Term Debt Issuance:$3.60M

Long Term Debt Repayments:$7.00M

Non-Cash Items (1)

Depreciation Amortization Ttm:1,100,802.00

DIVISION III: OPERATIONAL METRICS

A. Per Share Analysis

Earnings Per Share (2)

EPS (Basic TTM):-0.49

Earnings Per Share Ttm:-$0.37

Revenue & Cash Per Share (3)

Sales Per Share Ttm:3.36

Operating Cash Flow Per Share:$0.38

Fcf Per Share Ttm:0.48

Book Value & Capital (2)

Book Value Per Share:$0.26

Cash Per Share:0.70

Dividend Policy (1)

Dividend Payout Ratio:-999.00x

B. Operational Efficiency

Asset Utilization (2)

Asset Turnover Ttm:1.27x

Working Capital Turnover Ttm:43.11x

Receivables Management (2)

Receivables Turnover Ttm:6.25x

Days Sales Outstanding Ttm:58.40

Inventory Management (2)

Inventory Turnover Ttm:-999.00x

Days Inventory Outstanding Ttm:-999.00

Payables & Cash Cycle (2)

Days Payable Outstanding:199.65

Cash Conversion Cycle:-1,140.25

C. Quality & Risk Metrics

Financial Quality Scores (2)

Financial Strength Score:20.00

Quality Score:35.00

Market Metrics (2)

Beta:0.00x

Volatility Category:unknown

DIVISION IV: INVESTMENT ANALYSIS

A. Value Investment Framework

Owner Earnings Analysis (3)

Owner earnings TTM: $5.99M

Linear Growth: 89.2%

📊 Click to view full AEYE Owner Earnings analysis & methodology →

Owner Earnings Per Share:$0.48

Owner Earnings Yield:$8.25

Growth Assessment (1)

Owner Earnings Growth Rate:$89.17

Damodaran Growth Analysis (2)

Reinvestment Rate:48.0%

Fundamental Growth Rate (g):-8.7%

Intrinsic Value Models (1)

Intrinsic Value:

$186.36M

📊 Click to view full AEYE DCF valuation →

Margin of Safety (1)

Margin Of Safety:

51.7%

📊 Click to view full AEYE valuation analysis →

Return Scenarios (2)

Theoretical 5-Year Return:

44.9%

📊 Click to view full AEYE expected return analysis →

Forward Expected Return (Yield + Growth):

-0.4%

📊 Click to view full AEYE expected return analysis →

Investment Assessment (1)

Buffett Assessment:Excellent margin of safety

B. Log-Linear Regression Growth Analysis

Growth Rates (Log-Linear Regression) (1)

Revenue Growth Rate (Linear):11.2%

Cash Flow Growth Rates (2)

Free Cash Flow Growth Rate (Linear):89.2%

Operating Cash Flow Growth Rate (Linear):83.1%

Other Growth Rates (3)

Gross Profit Growth Rate (Linear):11.9%

Book Value Growth Rate (Linear):-24.4%

Owner Earnings Growth Rate:$89.17

C. Company Profile & Context

Corporate Information (6)

Symbol:AEYE

Company Name:AUDIOEYE INC

Sector:Technology

Industry:Software

Exchange:NASDAQ

Country:United States

Market Classification (3)

Market Cap Category:N/A

Price Category:low

Volume Category:N/A

Share Structure (3)

Shares Outstanding:12.49M

Shares Outstanding Basic:12.49M

Shares Outstanding Diluted:12.49M

Data Processing Info (3)

Processing Version:v3.0

Last Updated:2026-08-22 04:27:39 UTC

Data Timestamp:2026-08-19T21:32:46.148575