Media technology

Is built-in media technology a good software action to buy under $ 4?

Hong Kong-based Integrated Media Technology (IMTE) is known for its 3D display technology without glasses. But its stock price fell nearly 7% over the past month to close yesterday’s trading session at $ 3.95. So, can the stock bounce back with its new IoT business unit? Read on to find out more.

Based in Wan Chai, Hong Kong, Integrated Media Technology Limited (IMTE) is a lesser-known company that develops, sells and distributes 3D autostereoscopic display (ASD) technology products and services in Hong Kong, China, Korea, Singapore, and Australia. The company launched its new Internet of Things (IoT) business unit in February 2021 by agreeing to acquire a 70% stake in Shenzhen Koala Wisdom Fire Engineering Co., Ltd.

However, the IMTE stock price fell 6.6% in the past three months and 6.8% in the past month to close yesterday’s trading session at $ 3.95. Shares of the company soared to their 52-week high at $ 10.67 on March 23, solely based on discussions on social media regarding its potential link to the non-fungible token (NFT) craze.

In addition, the company’s operating loss in its fiscal year 2020 decreased to $ 6.15 million from a loss of $ 11 million in 2019. Its net loss amounted to $ 10.03 million. dollars in its fiscal year 2020 compared to $ 15.65 million the previous year. IMTE also raises funds by selling its shares to support its growth. Thus, its short-term outlook looks bleak.

Here is what we believe could influence IMTE’s performance in the short term:

Growing Uncertainty Over Operating Activities in Hong Kong

On July 16, the Biden administration warned that U.S. businesses faced several risks posed by China’s national security law in Hong Kong. The opinion advised companies to take into account the reputational, economic and legal risks of maintaining a presence or staff in Hong Kong and that they should exercise due diligence.

In addition, Hong Kong is in talks to adopt a strict set of amendments to the Personal Data (Privacy) Ordinance (PDPO) against doxing, which is a common term for the act of publishing or disclosing information. personal information of a person. However, several concerns were raised about the vague definition of doxing and the increase in content blocking in recent weeks, and he somewhat anticipated that this move could restrict freedom of information. As a result, several tech companies, including Hong Kong-based IMTE, are expected to be negatively affected.

Sell ​​stocks to finance growth activities

IMTE announced on July 6 that it had entered into three securities purchase agreements with three qualified investors to sell its common shares for a total of $ 2.80 million. The company is expected to use the net proceeds to purchase equipment for its electronic glass business and working capital. He also announced the closing of a direct share offering on March 25 for cash proceeds of approximately $ 4.58 million. IMTE is expected to use the net proceeds to strengthen its balance sheet and further develop its switchable glass, nano-coated filter and financial research businesses. However, this share issue should result in dilution of the shares.

Stretched evaluation

In terms of rolling 12-month EV / S, IMTE’s 28.49x is 546% higher than the industry average 4.41x. The stock’s 12.28x P / S for the last 12 months is nearly 196% above the 4.15x industry average. His last 12 months 20.53x Price-to-Book is also significantly above the industry average 4.82x.

POWR ratings reflect grim prospects

IMTE has an overall D rating, which is equivalent to selling in our POWR odds system. POWR scores are calculated by considering 118 different factors, each factor being weighted to an optimal degree.

Our proprietary scoring system also rates each stock against eight different categories. IMTE has an F rating for value, in line with its valuation ratios above those of the industry. Additionally, it has an F rating for stability, which is in line with its beta of 2.27, indicating extreme volatility.

The stock also has an F rating for quality. This is justified given the negative values ​​of IMTE for the gross profit margin over the last 12 months and the ROTC compared to the respective industry averages of 48.60% and 4.51%.

IMTE is ranked n ° 40 out of 47 stocks in the B-rated Technology – Electronics industry. Click on here to also see IMTE’s ratings for Growth, Sentiment and Momentum.

Better than IMTE: Click here to access the 24 best rated stocks in the same sector.

Final result

Even though IMTE is a low-priced stock trading below $ 4, its valuation is stretched given its near-term growth prospects. Additionally, the company has reported losses for the past three years. Additionally, IMTE is currently trading below its 50-day and 200-day moving averages of $ 4.36 and $ 4.69, respectively, indicating that the stock is in a downtrend and may continue to pull back. So, we think it’s wise to avoid the stock now.

IMTE shares fell $ 3.95 (-100.00%) in pre-market trading on Wednesday. Year-to-date, IMTE has gained 1.28%, compared to a 16.05% increase in the benchmark S&P 500 over the same period.

About the Author: Manisha Chatterjee

Since she was young, Manisha has had a strong interest in the stock market. She specialized in economics at university and has a passion for writing, which led to his career as a research analyst.

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