Erayak Power Solution Group Inc. (RAYA) Stock Analysis
Erayak Power Solution Group Inc.
▾ What's in the 40/100 risk score? (higher = riskier)
Contributions (weight × component score) sum to the total. This near-term score now includes fundamental health (leverage, FCF trend). It excludes the Altman Z score, whose retained-earnings input this filer does not report separately. See the Financial Health section for the full balance-sheet read.
How to read RAYA (pre-profit growth)
This company is reinvesting instead of generating profit, so a standard DCF cannot price it. The useful question is whether the growth the market is paying for is achievable — and whether the company can fund itself until then.
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Reverse-DCF — the growth the price demands ↓
It shows exactly how fast the business must grow to justify today's price. Compare that to what comparable companies have actually achieved.
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Cash runway ↓
Can it reach profitability before it has to raise money and dilute shareholders?
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Interactive calculator ↓
Set your own growth + margin assumptions and see what the business would be worth if you are right.
Standard DCF doesn't fit RAYA well — but that's expected for this kind of business. The Rule of 40 (Pre-Profit Growth) Lens below uses the metrics actually used by analysts who value electrical industrial equipment. Reverse DCF + Football Field also work as cross-checks.
Quality & solvency checks
Cheap stocks can be cheap for a reason. These screens warn when a low valuation comes paired with structural fragility.
Why it matters: Cheap-looking stocks (low P/E or P/B) often have low Z-scores because the market knows the company is dying. Z-score warns you before you fall into a value trap.
Reference: > 3.0 = safe zone · 1.81–3.0 = grey zone · < 1.81 = distress zone
Full explanation →
The Z-score needs working capital, retained earnings, EBIT, sales and total assets from the latest balance sheet, and at least one of those isn't reported in machine-readable form here — common for foreign private issuers. We leave it blank rather than compute a distress verdict from an estimated input. It doesn't affect the reported figures in the financial tables below.
Why it matters: High score = fundamentals improving. Low score = deteriorating. Especially powerful for filtering cheap stocks: cheap + high F-score historically outperforms; cheap + low F-score is often a value trap.
Reference: 7–9 = strong · 4–6 = mediocre · 0–3 = weak
Full explanation →
▾ The checks — what passed, what didn't (and what we couldn't measure)
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✗ Positive net incomeNet income -$1.4M in FY2025.Why this matters: Does the company actually earn a profit? Sustained losses eventually force it to raise money — diluting you — or take on debt.
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✗ Positive operating cash flowOperating cash flow -$3.2M (was -$15.9M the prior year).Why this matters: Profit can be an accounting figure; cash from running the business is harder to fake. Negative operating cash flow means the core business consumes cash and must be funded externally.
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✗ Cash flow backs up reported profitOperating cash flow -$3.2M vs net income -$1.4M.Why this matters: When cash generated exceeds reported earnings, profits are high-quality (not propped up by accruals or one-time items).
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✓ Return on assets improvingReturn on assets -2.3% vs -2.4% a year ago.
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✓ Debt load (vs assets)Long-term debt is 5.7% of assets vs 8.5% a year ago ($3.4M of $59.4M assets).
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✗ Short-term liquidity (current ratio)Current ratio 2.09x vs 2.13x a year ago.Why this matters: The current ratio compares assets it can turn to cash within a year against bills due within a year. Below 1.0 means it may struggle to cover near-term obligations.
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✗ Share count (dilution)Share count rose 349.0% (0.0M → 0.1M year-over-year).Why this matters: Issuing lots of new shares splits the pie into more pieces, shrinking your slice. Stable or falling share count protects existing owners.
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✓ Pricing power (gross margin)Gross margin 21.3% vs 13.2% a year ago.
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✗ Sales per asset (asset turnover)Asset turnover 0.38x vs 0.66x a year ago.Why this matters: Asset turnover measures how much revenue each dollar of assets generates. Rising = more productive use of the asset base.
Missing data is never counted as a pass or a fail — it's shown as n/a and excluded from the denominator. Each check compares the company against its own prior year.
Plain English: the company holds about $0M in cash and is burning roughly $3M/year in operations. At that pace, the cash lasts 2 mo before it must raise capital (diluting shareholders), take on debt, or cut spending.
Assumes constant burn and ignores financing/asset sales. For pre-profit biotech and growth companies, this matters more than a DCF — a great drug pipeline is worthless if they run out of money before approval.
A standard discounted cash flowDCF — Discounted Cash Flow — sums up all future cash a business will produce, adjusted for the fact that future dollars are worth less than dollars today.
Why it matters: It is the most fundamentally honest valuation method when applicable — but only works for companies with predictable, positive cash flow.
Reference: Best for: mature, profitable businesses. Fails for: pre-profit growth, banks, REITs.
Full explanation → (DCF) valuation is not meaningful for Erayak Power Solution Group Inc. due to its negative operating cash flow and compressing gross margins, making future cash flows highly uncertain. Investors are likely focused on the company's ability to achieve sustained profitability and positive cash flow, rather than current earnings. The primary quantifiable risk is the continued compression of gross margins, which could hinder future profitability despite revenue growth.
As of 3 months ago
Anatomy of a share
What you're buying per share. Bars are at the same scale so you can see the relative size of revenue, costs, cash flow, and debt — not just read them in a table.
What you actually need to decide
Every stock price is a disagreement. Here's the single thing that must go right for the bulls, the single thing that breaks the thesis, and the concrete signposts to watch so you can update your view as real results arrive.
- Improvement in gross margin percentage in upcoming filings
- Positive operating cash flow reported in future quarters
- Acceleration in revenue growth beyond 5.2% annually
The trend, in plain numbers (FY2024 → FY2025, latest reported)
Straight from the financial statements — no model, no opinion. For a small or unprofitable company, the direction of these numbers usually tells you more than any single valuation.
- Free cash flow is negative at -$8.4M — the cash burn narrowed vs last year.
- Gross margin improved to 21% (+8 pts).
- Revenue fell -25% to $22.9M.
- Still unprofitable at -$1.4M — loss widening.
Management & Leadership
Erayak Power Solution Group Inc. is led by Mr. Jianjun Wu, who serves as the Chief Executive Officer. The company's leadership focuses on developing and delivering power solutions. Limited executive data available beyond the CEO.
What They Make
Erayak Power Solution Group Inc. designs, manufactures, and sells power solution products, including inverters, generators, and related equipment, primarily serving industrial and commercial customers.
End Markets
Revenue Drivers
Why Is It Priced Like This?
Why Customers Pay
What we use instead: earnings (P/E, EV/EBIT), book value (P/B) — computed from the figures this company does report, shown in the sections below. Those numbers are unaffected by the missing cash-flow data.
The market is likely pricing Erayak based on its revenue growth of 5.2% per year, anticipating that this growth will eventually lead to sustained profitability and positive cash flow, which has been negative recently. The market may be assigning value to the potential for new product development or expansion into emerging power solution markets, which is not in the model, despite the current negative net income and operating cash flow.
Business Model & Valuation
How They Make Money
The company funds itself primarily through its operations and potentially equity raises, as it has negative operating cash flow and no stated dividend or buyback programs.
Growth / Revenue DCF
Negative free cash flow: revenue/margin growth model used - standard FCF DCF is unreliable for companies still scaling.
Show advanced inputs
| Revenue Growth | 5.2% |
What this model does NOT do: this is a consolidated owner-earnings FCF model. Standalone segment assumptions: none. It does not project product, services and recurring/cloud lines independently; their combined effect is embedded in the historical revenue and cash-flow trend the model extrapolates. The calculator above can only approximate a segment's impact through the single consolidated growth rate — it cannot model any one line separately. For a true segment-level view, build a separate model from the company's segment disclosures.
Maturity & Competitive Position
Moat Signals
Revenue is growing at 5.2% per year over the last four years, from $19M to $23M.
Geography & Markets
Erayak Power Solution Group Inc. operates globally, with a focus on serving industrial and commercial customers across various regions. Specific geographic revenue mix percentages are not available from current data sources.
Geographic Risks
Market Signals
These are timing signals, not value signals — they describe the stock's recent price behavior, not what the business is worth. Use them for the "the thesis looks good, but is now the moment?" question. Each tile below explains what it's saying.
Why it matters: Short-term contrarian indicator. Extreme readings often precede mean reversion, though not always.
Reference: 30–70 normal · >70 overbought · <30 oversold
Full explanation → (14)44.5NeutralMomentum is balanced — neither overbought nor oversold.
Why it matters: When the fast line crosses above the slow line, short-term momentum is turning up; below, turning down. A timing cue, not a value signal.
Reference: Line above signal = bullish momentum · below = bearish
Full explanation →BullishLine above signalThe fast trend is above the slow trend — short-term momentum is currently upward.
Technicals describe price, not the business. A great company can have a "bearish" tape (a buying chance) and a weak one a "bullish" tape (a trap). Pair these with the valuation and health sections above.
QUALITY
Data Quality & Risk Flags (5 notes — click to expand/collapse)
Guardrail Notes (4)
- FCF negative: revenue/margin growth model projects future cash flows from revenue trajectory.
- Illiquidity discount 25% applied (small/micro-cap — harder to exit, demand a margin).
- Extreme valuation (P/IV withheld — see the note above); output dominated by data/units issue (often a multi-class share-count mismatch). Suppressed.
- DATA UNAVAILABLE: per-share values suppressed due to missing/unreliable shares data.
FINANCIALS
Financial Statements (5-year tables — click to expand)
From Erayak Power Solution Group Inc.'s SEC filings (EDGAR).
Income (5yr)
| Year | Revenue | Net Income | EPS |
|---|---|---|---|
| 2025 | 22.9M | -1.4M | $-27.28 |
| 2024 | 30.3M | -1.1M | $-98.34 |
| 2023 | 20.3M | 1.2M | $223.43 |
| 2022 | 26.9M | 3.5M | $0.38 |
| 2021 | 18.6M | 3.4M | $2.40 |
Cash Flow (5yr)
| Year | Operating CF | CapEx | − SBC & adj. | Free Cash Flow |
|---|---|---|---|---|
| 2025 | -3.2M | 5.2M | — | -8.4M |
| 2024 | -15.9M | 517,813 | — | -16.4M |
| 2023 | 6.7M | 684,210 | — | 6.0M |
| 2022 | -4.2M | 694,813 | — | -4.8M |
| 2021 | 4.6M | 244,017 | — | 4.4M |
How we define FCF: operating cash flow − capital expenditure − stock-based compensation (owner-earnings basis — SBC is a real cost to shareholders even though it's non-cash). This is the same owner-earnings FCF definition the valuation model uses, though the DCF's starting value is a projected from revenue × terminal margin, not this single year.
Balance Sheet
| Total Assets | 59.4M |
| Total Liabilities | 24.2M |
| Equity | 35.3M |
| Total Debt | 3.4M |
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