Zacks Initiates Coverage of IVDA With Neutral Recommendation

Zacks Investment Research has recently initiated the coverage of Iveda Solutions, Inc. IVDA with a “Neutral” recommendation, reflecting a balanced risk-reward profile as the company works to convert backlog into sustainable profitability while managing geographic and customer concentration risks.

Headquartered in Mesa, AZ, Iveda Solutions is a provider of AI-driven video surveillance and Internet of Things (IoT) technologies that support smart city and digital transformation initiatives. Its offerings span intelligent video analytics (IvedaAI), the Cerebro IoT platform, smart poles, power solutions, drones, sensors, body cameras and health monitoring systems. The company operates primarily in the United States and Taiwan, with Taiwan accounting for 85% of the total 2024 revenues.

For 2024, consolidated revenues were $6 million, down 7% year over year. The business remains heavily weighted toward equipment sales and installation, which accounted for 93% of 2024 revenues, while services accounted for 7%. In the United States, Iveda Solutions’ model combines hardware sales with recurring software licensing, creating the potential for dual revenue streams over time.

A key development in 2025 has been improved liquidity. In the first nine months of the year, the company raised $2.7 million in net proceeds through an at-the-market equity program, followed by $2.2 million in October. Cash and equivalents rose to $3.3 million as of Sept. 30, 2025, extending the company’s operational runway and reducing near-term refinancing risks. However, the additional shares outstanding raise the bar for future per-share performance.

Operationally, management has reset its expense base. Total operating expenses declined by roughly $810,000 year over year in the first nine months of 2025, helping narrow the operating loss to $1.6 million from $2.5 million in the prior-year period. Gross profit improved to $1.25 million on modestly higher revenues and the third-quarter 2025 gross margin expanded to 31% from 17% a year earlier, driven by higher-margin contract work in Taiwan. If the favorable project mix continues, earnings leverage could improve meaningfully.

The research report highlights several key factors that can drive IVDA’s growth. The company is also building a modest but growing services stream, which may help smooth revenue volatility over time. While still a small portion of total sales, recurring service revenues could enhance visibility and support margin stability.

However, potential investors should consider certain challenges outlined in the report. That said, Iveda remains unprofitable and dependent on the timing of equipment shipments, installations, and milestone approvals. Revenues can shift between quarters, contributing to earnings volatility. Customer concentration is notable, with two customers accounting for a significant portion of 2025 revenues, and geographic exposure to Taiwan remains high. Working capital swings and potential future financing needs add uncertainty to the path toward sustained profitability.

Shares have declined sharply over the past year and now trade at 0.53X trailing 12-month P/B and 0.22X EV/EBITDA, both well below industry and broader market averages. While valuation appears compressed, execution and margin durability will be critical.

You are encouraged to view the full Zacks research report for a comprehensive analysis of IVDA's financial health, growth initiatives and market positioning. This detailed report explores the company's operational strategies and financial performance, highlighting risks and opportunities that may impact its direction.

Read the full Research Report on Iveda Solutions here>>>

Note: Our initiation of the coverage on IVDA, which has a modest market capitalization of $2.23 million, aims to equip investors with the information needed to make decisions in this promising but inherently risky market segment.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research