One-glance verdict
Undervalued
$103.15 our estimate vs market $1.92
98% below our estimate, below the bear case
Fundamentals snapshot
Erayak Power Solution Group Inc.
RAYA · NCM · Industrials · Electrical Equipment & Parts
Current price
$1.92
52-week range
$1.65 - $101.20
Market cap
$2.03M
Balance sheet
Distressed
-4.25x Concerning
Net debt $5.05M. Interest coverage shows how many times profit covers the interest bill.
What stands out
1 Reward
3 Risks
1 rewards · 3 risks
- Reward Free cash flow was positive in 2/10 years.
- Risk Net debt grew 106.3% over 3 years.
- Risk Operating margin compressed from 15.8% to -4.5% over 3 years.
- Risk Insider ownership is only 0.0% (peer median: 17.4%).
What this company does
Erayak Power Solution Group Inc.
Erayak Power Solution Group makes and sells devices that provide electricity when you're not near a power outlet, like portable generators for RVs or battery packs for camping. The company earns money by manufacturing and selling these products to both large distributors and individual customers across the globe. Its business is tied to the growing need for power on the go, whether for recreation, work in remote locations, or as an emergency backup at home.
How the company got here
The company's main operations began in China in 2009 through a subsidiary named Zhejiang Leiya. In 2019, a new parent company, Erayak Power Solution Group Inc., was established in the Cayman Islands to hold the business. A key turning point was in December 2022, when the company held its Initial Public Offering (IPO), which is when a private company first sells shares of stock to the public, listing on the Nasdaq stock exchange in the U.S. to raise money for its operations. This move was part of its plan to expand its reach to international customers.
What it actually does
Erayak designs and builds products that provide electricity when you're away from a standard wall outlet. Think of them as portable power sources for various situations. Their equipment is often used in recreational vehicles (RVs), farm and industrial trucks, and for outdoor activities like camping. They sell these products both in wholesale (selling in large quantities to other businesses) and retail (selling directly to individual customers) in China and other countries around the world.
Inverters
This is the company's largest business, making up the vast majority of its sales. An inverter is a device that changes one type of electricity (Direct Current, or DC, like from a car battery) into the type that powers most household appliances (Alternating Current, or AC). Erayak makes several kinds, including sine wave inverters, which provide a stable and clean power source for sensitive electronics, and off-grid inverters for situations where there's no connection to the main power supply. Customers buy these to run everyday electronics in vehicles or remote locations.
Generators
This segment represents a smaller but growing part of the company's business. Erayak produces gasoline-powered generators, which are machines that burn fuel to create electricity. These are useful for providing more power than a battery alone can supply, making them suitable for running larger equipment or as a backup power source during an outage. Customers who need reliable, on-demand power for outdoor work or recreational activities are the main buyers.
Chargers
This part of the business accounts for a small slice of the company's total revenue (the money it brings in from sales). Erayak makes smart chargers and battery chargers designed to efficiently charge various types of batteries. Unlike a simple power cord, these chargers can manage the charging process to help extend a battery's life. People who use vehicles like RVs or boats, or have other battery-powered systems, purchase these to maintain their power storage.
What management is betting on now
The company is making a strategic pivot to focus more on the North American market and higher-powered, more advanced energy systems. They have established a U.S. subsidiary to strengthen sales and customer support in the region. Management is also developing new products like tri-fuel generators (which can run on gasoline, propane, or natural gas) and systems with integrated UPS (Uninterruptible Power Supply) capabilities, which provide seamless backup power for sensitive electronics. Their goal is to meet the growing energy needs they see coming from things like AI infrastructure and to become a key provider of home energy resilience solutions.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q4
$-16.39M
FY2025 Q4
$-8.41M
Revenue
$22.86M
Net income
$-1.39M
Diluted EPS
—
Operating cash flow
$-3.17M
Free cash flow
$-8.41M
Fetching…
Sources
Revenue
$30.30M
Net income
$-1.12M
Diluted EPS
—
Operating cash flow
$-15.88M
Free cash flow
$-16.39M
Fetching…
Sources
Is it cheap or expensive?
Fair value $103.15 vs current price $1.92
Our most-likely fair value is $103.15 a share — about 5,272.2% above today's price of $1.92, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Distressed
Net debt $5.1M. Interest coverage -4.3x.
Net debt
$5.05M
Interest coverage
-4.25x
Erayak Power Solution Group Inc.'s profit covers its interest bill about 0.0 times over. which is weaker than most peers shown here and 5 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Distressed
Worse cushion
Baseline
Better cushion
RAYA
BASELINE
Erayak Power Solution Group Inc.
Total debt $13.69M Interest coverage -4.25x This is the baseline the peer rows are being compared against.
Total debt $6.37M Interest coverage -14.68x Neither company has much profit cushion over interest right now.
Total debt $51.01M Interest coverage -27.70x Neither company has much profit cushion over interest right now.
Total debt $16.56M Interest coverage -14.97x Neither company has much profit cushion over interest right now.
Total debt $5.84M Interest coverage -34.06x Neither company has much profit cushion over interest right now.
Total debt $3.32M Interest coverage -30.93x Neither company has much profit cushion over interest right now.
What you should know
The case for and against RAYA
1 Reward
3 Risks
Rewards
-
Free cash flow was positive in 2/10 years.
Risks
-
Net debt grew 106.3% over 3 years.
-
Operating margin compressed from 15.8% to -4.5% over 3 years.
-
Insider ownership is only 0.0% (peer median: 17.4%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
—
Forward P/E
—
P/B
0.00x
P/S
0.09x
EV/EBITDA
-10.09x
PEG ratio
—
Profitability
How much profit each dollar creates
Gross margin
22.9%
Operating margin
-4.5%
Net margin
-6.1%
ROE
-4.5%
ROA
-1.5%
Health
Liquidity and balance-sheet strength
Debt / equity
0.39x
Current ratio
2.09x
Quick ratio
1.23x
Total debt
$13.69M
Total cash
$8.64M
Growth
How the business has been compounding
Revenue TTM
$100.39M
Revenue 5Y CAGR
5.2%
EPS TTM
-272.80
EPS 5Y CAGR
—
Cash flow
How much cash the business throws off
Operating CF TTM
$-16.46M
Free CF TTM
$-8.41M
FCF margin
-8.4%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
—