Media technology

Is the built-in multimedia technology a good NFT stock to own?

Integrated Media Technology (IMTE) is known for its glassless 3D display technology. While the company’s entry into the NFT space has caught the eye of investors, the stock price is currently down more than 60%. So, let’s assess whether it’s worth betting on the stock now. Continue reading.

Based in Hong Kong, Integrated Media Technology Limited (IMTE) develops, sells and distributes 3D autostereoscopic display (ASD) technology products and services in Hong Kong, China, Korea, Singapore and Australia.

The stock jumped more than 30% in December when the company announced its intention to acquire a blockchain project. IMTE has decided to “take over” a previously agreed transaction with Hong Kong-based Joint Investment Limited. Under the terms of the agreement, Joint Investments and its former partners will develop a non-fungible token (NFT) trading platform based on blockchain technology.

The stock is down 63.8% over the past three months and 61.2% over the past month to close yesterday’s trading session at $4.37. Additionally, the stock is currently trading 88.6% below its 52-week high of $38.47, which it reached on April 1, 2022.

Here’s what could shape IMTE’s performance in the near term:

Extended valuation

In terms of price/sales over the last 12 months, the stock is currently trading at 28.79x, which is 724.7% higher than the industry average of 3.49x. Additionally, its 44.86x EV/Sales over the last 12 months is 1129.6% higher than the 3.65x industry average. Additionally, IMTE’s price/pound of 6.76x over the last 12 months is 88% above the industry average of 3.58x.

Low profitability

0.09% of IMTE over 12 rolling months asset turnover the report is 86.2% lower than the industry average of 0.63%. Its trailing 12-month operating cash flow was negative $5.45 million, versus the industry average of $90.61 million. Moreover, its ROA, its gross profit margin and its ROC over the last 12 months are respectively negative 53.7%, 115.5% and 32.4%.

POWR ratings reflect bleak outlook

IMTE has an overall F rating, which equates to a strong sell in our own POWR Rankings system. POWR ratings are calculated by considering 118 separate factors, with each factor weighted to an optimal degree.

Our proprietary scoring system also rates each stock against eight distinct categories. IMTE has an F rating for Value, Stability, and Quality. The company’s valuation, higher than that of the industry, is consistent with the Value rating. Additionally, the stock’s 2.74 beta is in line with the Stability rating. Also, IMTE’s low profitability justifies the Quality rating.

Of the 48 shares listed C Technology – Electronics industry, IMTE is ranked #43.

Beyond what I said above, we can see the IMTE ratings for Momentum, Quality and Sentiment here.

Conclusion

IMTE has posted losses for the past three years, but it is trading at a high valuation given its near-term growth prospects. Additionally, the stock is currently trading below its 50-day and 200-day moving average of $10.32 and $6.44, respectively, indicating bearish sentiment. Therefore, we think it is better to avoid the stock now.

How does Integrated Media Technology Limited (IMTE) compare to its peers?

Although IMTE has an overall rating of F, one might consider its industry peers, Wayside Technology Group Inc. (WSTG) and Arrow Electronics Inc. (ARW), which have an overall rating of A (Strong Buy).

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IMTE shares were up $0.23 (+5.26%) in premarket trading on Friday. Year-to-date, IMTE is down -2.24%, compared to a -7.48% rise in the benchmark S&P 500 over the same period.

Pragya is an equity research analyst and financial journalist with a passion for investing. In college, she majored in finance and is currently pursuing the CFA program and is a Level II candidate.


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