VirnetX Holding Corp (VHC) AI Stock Analysis
VHC AI stock analysis summary
AI ResearchVirnetX Holding Corp is an Internet security software company developing zero trust communication solutions. For the trailing twelve months, the company generated $114,000 in revenue with an operating margin of -17640.4% and an EPS of -$5.37. As of June 30, 2026, VirnetX held $13.9M in cash and short-term investments with a current ratio of 6.24.
- Market cap
- $42.5M
- Revenue (TTM)
- $114,000
- P/E
- — fwd 3.6x
- 1Y return
- -40.4% S&P 500 16.8%
- Avg. target
- $2.88 -71.6% vs last close
Bull case
- VirnetX expanded annual revenue to $162,000 in FY2025, achieving 3140.0% growth over the prior fiscal year.
- The company closed the quarter ended June 30, 2026, with a strong liquidity profile featuring a current ratio of 6.24 and $13.9M in cash and short-term investments.
- Forward valuation multiples remain low, including a forward P/E of 3.6x and an EV to EBITDA ratio of 1.7x.
Bear case
- The company reported persistent annual net losses, including a net loss of $18.2M and negative free cash flow of $15.7M in FY2025.
- Trailing twelve-month revenue stands at just $114,000, yielding an elevated price-to-sales ratio of 373.2x.
- Analyst targets reflect significant skepticism, with the mean price target of $2.88 sitting 71.6% below the last close of $10.14.
What VirnetX does
VirnetX Holding Corporation, along with its subsidiary VirnetX, Inc., operates as a provider of Internet security software and technology solutions primarily in the United States. The company specializes in securing communications over the Internet using zero trust network access principles. Offerings include the secure domain name registry, GABRIEL Connection Technology, and VirnetX One, a security-as-a-service platform designed to protect enterprise applications, services, and infrastructure. It also provides the GABRIEL Connection Technology software development kit, War Room software for secure video conferencing environments, and the GABRIEL Collaboration Suite.
Growth and profitability
VirnetX generated annual revenue of $35,000 in FY2021, $48,000 in FY2022, $7,000 in FY2023, $5,000 in FY2024, and $162,000 in FY2025. Over the five years from FY2020 to FY2025, revenue contracted at a CAGR of -77.8%. In FY2025, gross margin reached 85.8%, but operating margin was -11691.4% and net income stood at -$18.2M, with diluted EPS of -$4.75. For the trailing twelve months ended June 30, 2026, revenue was $114,000, EPS was -$5.37, and operating margin was -17640.4%. While quarterly revenue growth was 4700.0% year-over-year in the latest quarter, profitability metrics remain negative.
Balance sheet and cash flow
As of the quarter ended June 30, 2026, VirnetX held $13.9M in cash and short-term investments, with total assets of $23.0M and shareholders' equity of $15.1M. The company maintained a current ratio of 6.24. In FY2025, operating cash flow was -$15.6M and free cash flow was -$15.7M, alongside capital expenditures of $17,000. Additionally, the company's share count increased 5.9% over a 5-year period.
Valuation and performance
VirnetX carries a market cap of $42.5M and an enterprise value of $33.8M. The stock trades at a price-to-sales multiple of 373.2x and an EV to revenue multiple of 296.1x, substantially above the median of its US-listed Technology peers of 2.8x for price-to-sales. Its forward P/E ratio is 3.6x compared to 18.8x for the peer median, and its EV to EBITDA is 1.7x versus 16.6x for peers. Over the past year, VHC returned -40.4%, while the SPY benchmark gained 16.8%. Over 5 years, the stock returned -87.2% against an 83.0% gain for the S&P 500.
What analysts expect
Wall Street sentiment indicates a mean price target of $2.88 for VirnetX, representing a potential downside of 71.6% compared to the last close of $10.14 on October 16, 2026. Over the last 4 quarters, the company recorded 0 EPS beats against expectations. The next scheduled earnings release date is November 13, 2026.
Key risks and what to watch
- VirnetX burned through -$15.6M of operating cash flow in FY2025, putting pressure on its $13.9M cash balance if burn rates continue.
- The stock displays high volatility with a beta of 2.26 and has declined 40.4% over the past 12 months.
- VirnetX failed to beat analyst earnings expectations in each of the last 4 quarters, posting 0 EPS beats.
- Long-term top-line contraction is severe, highlighted by a 5-year revenue CAGR of -77.8% from FY2020 to FY2025.
AI-generated research summary. Written with AI from Quotelinks data as of October 16, 2026 and checked so every figure matches that data. For information only, not investment advice. Disclaimer
About this VHC AI stock analysis
This page is an AI-written research summary of VirnetX Holding Corp (VHC). The text was generated on October 30, 2026 from Quotelinks data as of October 16, 2026 (company profile, annual results, latest balance sheet, valuation, price performance and analyst estimates). An automatic check rejects any draft that contains a figure not found in that data. It is not investment advice; verify figures on the linked tabs before making decisions.
Related: VHC income statement, VHC balance sheet, VHC key metrics, VHC chart. See the VHC stock overview for the latest quote and news.
VHC AI stock analysis FAQ
What is VirnetX Holding Corp's primary business?
VirnetX Holding Corp develops Internet security software and technology solutions based on zero trust network access. Its portfolio includes VirnetX One, the GABRIEL Connection Technology, secure domain name registry, and War Room secure video conferencing.
Does VirnetX pay a dividend?
No, VirnetX does not pay a dividend, and no dividend data is reported.
What is VirnetX's cash position and debt status?
As of June 30, 2026, VirnetX had $13.9M in cash and short-term investments, total assets of $23.0M, and a current ratio of 6.24.
What is the consensus analyst price target for VHC stock?
The mean analyst price target is $2.88, which represents a 71.6% decline from the last closing price of $10.14 on October 16, 2026.