American Virtual Cloud Technology (AVCT) stock is trading near its 52-week low. Although it looks cheap, this fundamentally weak stock might be best avoided amid heightened market volatility. Continue reading….
American Virtual Cloud Technologies, Inc. (AVCT) is a pure cloud communications and collaboration company that provides cloud-based business services worldwide. The company’s Kandy cloud communications platform is a cloud-based real-time communications platform.
AVCT is currently trading near its 52-week low of $0.13, which was reached on August 23, 2022. It is trading 95.6% below its 52-week high of $3.79, which was reached on September 10, 2021. Last month, the stock gained marginally to close the last session at $0.17.
However, it has lost 95.2% in the past year and 93.1% year-to-date. AVCT is trading below its 50-day moving average of $0.23 and its 200-day moving average of $0.84.
Here’s what could shape AVCT’s performance in the short term:
The persistent hawkish stance of the Fed
After two consecutive 75bps rate hikes, the odds of another similar hike this month are rising rapidly. According to CME Group’s FedWatch tracker, the likelihood of a Three-quarter growth rises to 82%.
The rate-sensitive and tech-heavy NASDAQ Composite has lost 24.2% year-to-date. The Fed’s monetary tightening could cause further turmoil, and fundamentally weak tech stocks could cause significant losses.
Weak peak performance
For the second quarter ended June 30, 2022, AVCT’s total revenue was $3.72 million, down 24.8% year-over-year, while cloud and software subscription revenue was $3.62 million dollars, down 10.8% year-on-year.
In addition, its gross loss amounted to $1.55 million, compared to a gross profit $1.38 million in the previous period. Also, its loss from continuing operations was $24.01 million, up 105.6% year-on-year.
POWR ratings reflect an ominous outlook
AVCT has an overall rating of D, which equates to a Sell on our property POWR Reviews System. POWR ratings are calculated by considering 118 different factors, with each factor weighted to its optimum degree.
The AVCT has a grade of D for Emotion. Analysts expect its revenue to decline 11.5% year over year to $103.59 million in 2022. Additionally, it has a D grade for stability, in sync with its beta of 1.32.
In stock 81 Technology – Services industry, AVCT is ranked #73. The branch is graded C.
click here for the additional POWR ratings for AVCT (Growth, Value, Momentum, Quality). See all the top stocks in the Technology – Services sector here.
AVCT showed weak momentum amid the broader market sell-off. Additionally, the deterioration of his top line is concerning. Given the bleak outlook for the stock’s growth, I think AVCT might be best avoided now.
How American Virtual Cloud Technologies, Inc. stacks up. (AVCT) versus its peers?
While AVCT has an overall POWR rating of D, one might consider looking at its industry peers, Celestica Inc. (CLS), Issuer Direct Corporation (ISDR), and Box, Inc. (BOX), which have an overall rating of A (Strong Market).
AVCT stock was trading at $0.18 per share on Friday morning, up $0.01 (+5.67%). Year-to-date, AVCT has fallen -92.59%, versus a -14.10% gain for the benchmark S&P 500 over the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master’s degree in economics, she helps investors make informed investment decisions through her insightful commentary.
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