A hét részvénye: MicroVision (Angol hír)

MicroVision (MVIS.US) is one of the hottest US stocks recently. Share price rallied from $10.30 on April 20 to high of almost $28.00 at the beginning of the session on April 27. However, share price finished April 27 trading almost 30% below its daily peak. If you think this scheme looks similar to early-year's performance of GameStop or AMC Entertainment, you are not mistaken as this stock has also been targeted by the WallStreetBets community. Let's take a closer look at the company.

Company Overview

MicroVision is a small US company that develops laser scanning technology for image capturing and displaying as well as 3D sensors. Company's business model assumes developing technology and licensing it to original equipment manufacturers (OEMs) later on. However, in spite of the company having an almost 30 year history, it has never reported profit on an annual basis. Revenue growth has been stagnant for years and the company generated just $3.09 million in sales in 2020. MicroVision had only 2 profitable quarters over the past 15 years and combined net loss during that 15-year period stands at over $400 million.

MicroVision has a combined, 15-year net loss of $405 million compared to a combined 15-year revenue of just $133.94 million. Source: Bloomberg, XTB

Reasons behind recent rally

As financial data paints a very poor outlook for the company, one may wonder why MicroVision stock has surged over 2,800% since the beginning of 2020. While there were some rumours about potential sale of the company in 2020, they have not materialized and a bulk of the aforementioned price gains were made this year. Reasons? Stock became a target of the WallStreetBets community! With a 20% short interest it has fit into the community's goal of playing against financial institutions. However, as the case of GameStop or AMC Entertainment shows, such Reddit-induced rallies do not last forever.

Is there a bull case?

There is one key question that needs to be asked - is there a bull case for MicroVision? When it comes to GameStop, the primary goal was to squeeze hedge funds out of short positions but there was a slim bull case assuming that reopening of the economy will boost brick-and-mortar sales of the company. When it comes to MicroVision, it looks like short squeeze was the only reason behind the recent surge. MicroVision is in the process of developing a new lidar sensor but it is not expected to be ready within a year or two. Even if MicroVision manages to develop a superior sensor, the company may find it hard to scale up production or even find customers as competition in the sector is fierce. Meanwhile, the company continues to book losses and with poor outlook for profits, it has to resort to equity financing rather than debt financing. As a result, the number of shares outstanding increased from 47.4 million at the end of 2015 to almost 153 million at the end of 2020.

Summary

MicroVision has experienced a massive share price rally recently, driven by investors from the WallStreetBets community. While this rally may last, it is hard to determine when it will end or whether it has ended already. Stock trades at Price-to-Sales ratio of over 900, signalling that it is massively overvalued. Additionally, lack of possibility to finance with debt poses a risk of significant stake dilution for investors with a long-term horizon. MicroVision will release Q1 earnings today after the close of the Wall Street session but it is hard to imagine what the company would have to report to make its valuation justified. Market consensus expects another quarterly net loss of $3.6 million amid sales of only $0.6 million.

Taking a look at the technical situation of the stock, one can see that the recent share price rally has pushed the price above a downward trendline. Surge was halted near the $27.80 mark. Subsequent downward move reached a $19 swing level before stock started to recover. This is a key support zone to watch for now.

Source: xStation5