IMTE: Integrated multimedia technology: buy, sell or hold?
Hong Kong-based Integrated Media Technology Limited (IMTE) is a 3D autostereoscopic display (ASD) technology company that develops glasses-less 3D equipment and services. The company’s products have wide application in industrial sector and software development. As one of the budding companies in the Internet of Things (IoT) space, IMTE has gained 108.5% over the past year.
IMTE also provides super 3D workstations for converting 2D video content to 3D mode for the TV and film industry; and VisuMotion, a set of software designed for 2D to 3D conversion, as well as for the creation of 3D content. In addition, it sells and distributes switchable glasses; and offers 3D consulting, management and trading services. The company was previously known as China Integrated Media Corporation Limited and changed its name to Integrated Media Technology Limited in October 2016.
The company has been working to strengthen its presence in the IoT space over the past two months, with the most notable development being its acquisition of a 70% stake in Shenzhen Koala Wisdom Fire Engineering Co. Ltd. in February.
Here is what we believe could shape IMTE’s performance in the short term:
The craze for NFT
IMTE’s unique business model has led investors to speculate on its potential entry into the non-fungible token space. The company yesterday closed a direct offering of 708,000 ADS for net proceeds of $ 4.58 million. It plans to use the product primarily for product development and financial research. Its stock has risen 69% year-to-date as NFT enthusiasts expect IMTE to launch a digital art segment soon, which will lead to overwhelming demand for NFT in the markets. global.
Entering the NFT market is expected to be extremely profitable for IMTE. NFT sales topped $ 500 million as of March 17, with the biggest sale valued at $ 69 million (Beeple Art). In the past seven days, nonfunglibe.com reported NFT sales worth $ 41.94 million.
In terms of EV / sales over the past 12 months, IMTE is currently trading at 51.66x which is significantly higher than the industry average 4.57x. The company’s 12-month price-to-sales ratio of 23.85 is 462.8% above the industry average of 4.24.
Low profitability and finances
But, despite a market cap of $ 43.19 million, the company’s 12-month revenue has yet to cross the $ 1 million mark. In addition, IMTE’s gross profit, operating profit and net profit for the past 12 months are negative, while its book value per share is negative at $ 1.73. Its ROE and ROA are negative at 677.22% and 40.37% respectively, which is significantly lower than industry averages.
The company’s growth trajectory has remained negative over the past three years; its revenues and total assets declined at rates of 51.4% and 43.7%, respectively, during this period. And its EPS was down 62.2% year-on-year.
In addition, IMTE does not have sufficient operating income to meet its debts, which puts the solvency of the company at risk. Its total 12-month debt is $ 4.74 million, while its long-term debt to total capital ratio is 6.26%. In terms of cash, IMTE is draining cash from its operations, as evidenced by its 12-month net operating cash flow of $ 2.92 million. Its current and rapid ratios of 0.21 and 0.04 respectively reflect a significant liquidity risk.
POWR ratings reflect grim prospects
IMTE has an overall D rating, which is equivalent to Selling in our proprietary POWR rating system. POWR scores are calculated taking into account 118 different factors, each factor being weighted to an optimal degree.
IMTE has an F rating for value, quality and stability. Along with relative overvaluation and inadequate financial data, the stock has a beta of 2.39, indicating significant volatility. These factors combined justify the ratings.
IMTE is ranked n ° 39 out of 43 stocks in the Technology – Electronics sector. In addition to the ratings I’ve listed, you can check out additional IMTE ratings for Growth, Momentum, and Sentiment here.
Click here to view the top rated stocks in the Technology – Electronics sector here.
The company’s impressive price performance and potential entry into the NFT space attracted investors to the stock. However, there is no concrete evidence regarding the potential entry of IMTE into the NFT space. Additionally, since most NFT transactions are administered using cryptocurrencies, profits are highly taxable under the IRS rule, as non-fungible tokens are primarily classified as “collectibles.” So, we think it is better to avoid IMTE now.
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IMTE shares were trading at $ 5.55 per share on Monday morning, down $ 0.38 (-6.41%). Year-to-date, IMTE has gained 42.31%, compared to a 5.68% increase in the benchmark S&P 500 over the same period.
About the Author: Aditi Ganguly
Aditi is a seasoned content developer and financial writer who is passionate about helping investors understand the dos and don’ts of investing. She has a keen interest in the stock market and has a fundamental approach to stock analysis. Following…
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