Sono-Tek Corporation (SOTK) Stock Analysis & Winston Score

Sono-Tek Corporation makes ultrasonic spray systems — machines that use sound waves to coat surfaces with very thin, even layers of liquid. Their equipment is used in industries like electronics, medical devices, solar panels, and fuel cells. The company is small but specialized, selling to manufacturers around the world who need precise, low-waste coating technology.

Sono-Tek earns revenue by selling its hardware systems and replacement parts, with additional income from service and support. The company operates primarily from the United States but sells globally, including to customers in Asia and Europe. Its main competitive advantage is its long history and deep expertise in ultrasonic coating, which creates a niche position that larger industrial equipment makers have not aggressively targeted. The key growth driver is expanding demand for fuel cell and battery manufacturing, where precise coatings are critical — but as a very small company with limited resources, any slowdown in capital spending by its industrial customers could meaningfully hurt revenue.

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

+7.4% YoY

YoY Growth Rate

Slow revenue growth

EPS Growth

+110.1% YoY

YoY Growth Rate

EPS growth accelerating

R&D Spend

$3M/ year

↓ Declining (-6% vs prior year)

12.2% of revenue

In line with sector average (15%)

R&D spend declining — could signal cost-cutting or efficiency

Insider Activity

16.1%ownership

→ Flat

Insiders holding steady — not selling despite ability to

Cash Runway

~21 months

$5M cash & investments

Quarterly Free Cash Flow

→ Burn rate stable

Adequate runway but may need to raise capital within 2 years

Growth context

Sono-Tek Corporation is growing revenue at 7% year-over-year. The Winston Score measures business quality today — these growth metrics show what could matter tomorrow.

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.

Share count broadly stable

+0.7% over 4y

The share count has stayed roughly flat over this period — little dilution or buyback activity.

Diluted shares outstanding: 15.6M (2022) → 15.7M (2026)

Score breakdown

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Quality

Gross Margin

47.4%

Healthy — 47.4% gross margin

Operating Margin

5.6%

Thin — 5.6% operating margin

ROCE

1.6%

Weak — 1.6% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY

+1.3%

Nearly flat sales (1.3% YoY)

EPS YoY

+43.3%

Earnings growing fast (43.3% YoY)

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

EPS Consistency

8/8 quarters

Every recent quarter grew earnings vs last year

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Cash Flow

Cash Conversion

-36%

Weak — only -36% of profit becomes cash

FCF Margin

-4.0%

Burning cash (-4.0%)

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

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Stability

Debt / Equity

N/A

Data not available

Interest Cover

100.00x

—

Comfortably covers interest (100.0x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

P/E Ratio (TTM)

54.9x

Expensive — P/E 54.9

P/E over 35. The market is pricing in heavy, sustained growth.

P/E vs Forward

-66.9

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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