FatPipe

FATN

Software - Application · Technology

Price

$4.54

-0.00 (-0.00%)

Market Cap

$63.7M

Exchange

NASDAQ Capital Market

Winston Score

Winston is curious

A decent business — some strong pillars, some weaker.

Share count rising — dilution

+1.7% over 4y

The company has issued more shares over this period, which dilutes each existing shareholder’s stake.

Diluted shares outstanding: 13.8M (2022) → 14.0M (2026)

FatPipe, Inc. is a networking software company that helps businesses connect multiple internet lines together so their networks stay fast and reliable. Its core products include WAN optimization and SD-WAN software, which let companies combine several internet connections into one stronger, more stable link. The main customers are mid-sized businesses, government agencies, and organizations that cannot afford their network to go down.

FatPipe makes money by selling software licenses and support subscriptions to its customers. It operates primarily in the United States and holds several patents on its core network-bonding technology, which gives it some protection against larger competitors. The company is small, with a market cap around $100 million, but its high gross margins suggest the software itself is profitable to deliver. The key risk is competition from much larger networking vendors like Cisco and VMware, which have far greater resources to develop and market similar SD-WAN solutions.

Winston Score History

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+129.5% YoY

YoY Growth Rate

Revenue accelerating

EPS Growth

>+1,000% YoY

YoY Growth Rate

EPS growth accelerating

R&D Spend

$2M/ year

↑ Rising (+7% vs prior year)

9.9% of revenue

Below sector average (15%)

R&D investment increasing — building for the future

Insider Activity

54.9%ownership

Insiders own a meaningful stake in the company

Cash Runway

~6 years

$21M cash & investments

Quarterly Free Cash Flow

→ Burn rate stable

$21M cash & investments at current burn rate

Revenue accelerating

FatPipe grew revenue 129% year-over-year and the growth rate is speeding up. That's the kind of momentum growth investors look for — the question is whether margins can follow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

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Quality

Gross Margin

80.4%

Premium pricing power — 80.4% gross margin

Operating Margin

30.2%

Excellent — 30.2% operating margin

ROCE

7.2%

Weak — 7.2% return on capital

ROIC between 5% and 15%. They earn 5 to 15 cents back per year on every dollar invested.

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Growth

Sales YoY

+39.2%

Fast-growing sales (39.2% YoY)

EPS YoY

+210.6%

Earnings growing fast (210.6% YoY)

Earnings growing 25%+ a year. The compounder zone.

EPS Consistency

4/8 quarters

Earnings inconsistent quarter-to-quarter

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Cash Flow

Cash Conversion

-16%

Weak — only -16% of profit becomes cash

FCF Margin

-4.4%

Burning cash (-4.4%)

Free cash flow is negative. They are burning cash, not generating it.

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Stability

Debt / Equity

0.20

Conservative — low debt load (0.20)

Interest Cover

7.56x

Adequate interest coverage (7.6x)

Interest coverage between 3 and 8. Profits cover interest several times over.

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Valuation

P/E Ratio (TTM)

13.0x

Attractive valuation — P/E 13.0

P/E in the normal range. Price is roughly $15 for every $1 of yearly profit.

P/E vs Forward

-48.1

SLOWING

Earnings expected to fall — forward P/E higher than today

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Dividends

Not applicable for this business.

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