Swarmer, Inc. (NASDAQ:SWMR<\/b>) made our Mad Money recap, as Jim Cramer shared his take on the stock and highlighted resilient consumer spending despite the Iran conflict<\/b>. Cramer said that he cannot endorse the stock, as he stated:<\/p>\n I cannot in good conscience endorse Swarmer up here\u2026 Now, normally, I\u2019d tell you something like this is more of a business plan than an actual business, but clearly, something about Swarmer resonated with the market. So I dug deeper, and the truth is this company\u2019s got a great story even if it\u2019s still in its infancy\u2026 Even down here with the stock down nearly 60% from its highs\u2026 last Wednesday, I can\u2019t tell you to buy Swarmer in anything more than an extremely speculative position because the numbers just aren\u2019t there yet. Again, Swarmer has barely had any revenue to date, and it\u2019s losing millions of dollars a year.<\/p>\n Now, in its IPO prospectus\u2026 the company does cite signed contracts for new and existing customers amounting to roughly $33 million over the next 12 to 24 months, with about 60% of the revenue expected to be recognized this year. But even if we run the numbers on that and make a wildly optimistic assumption that Swarmer has almost 20 million in revenues this year, then the company\u2019s still valued at more than 16 times sales, not earnings, sales, which is very, very expensive. Plus, it\u2019s worth noting that there are a ton of shares set aside for employee stock plans and other things that are not being included in the company\u2019s official share count, but could result in significant dilution for shareholders, and that\u2019s in the not-too-distant future.<\/p>\n And of course, given how well the stock\u2019s done to start, the company would be crazy not to issue more shares itself as soon as it\u2019ll be able to. Finally, I just don\u2019t love how Swarmer seemed to come out of nowhere. There\u2019s no real institutional support for this one, given that it used just one boutique capital markets firm as its underwriter. I don\u2019t know, doesn\u2019t seem right. If the stock stays elevated, it might pick up some coverage from larger firms, but we can\u2019t assume that.<\/p>\n So here\u2019s the bottom line: Swarmer hit the market with a bang last week. But after looking closely at the company, I think this one needs more time in the oven, maybe much more. It\u2019s still very, very early, even if it\u2019s got a terrific elevator pitch. My verdict? Why don\u2019t we do this? Let\u2019s keep an eye on Swarmer for now and see if those signed contracts result in some more meaningful revenue this year. And let\u2019s see how the stock trades when there\u2019s not the pinch of a very low float like right now, because I expect there to be lots of dilution coming in the next year or two. For now, though, Swarmer, let\u2019s call it a cool story, but not much more than that.<\/p>\n<\/blockquote><\/div>\n Stock market reports printed on a sheet of paper. Photo by RDNE Stock Project on Pexels<\/p>\n Swarmer, Inc (NASDAQ:SWMR) is a defense technology firm that develops vendor-agnostic software for autonomous swarm coordination and multi-domain unmanned systems.<\/p>\n While we acknowledge the potential of SWMR as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock<\/b>.<\/p>\n READ NEXT: <\/b>33 Stocks That Should Double in 3 Years<\/b> and <\/b>15 Stocks That Will Make You Rich in 10 Years<\/b>\u00a0<\/b><\/p>\n Disclosure: None. Follow Insider Monkey on Google News<\/b>.<\/b><\/p>\n<\/p><\/div>\n\n
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