Advent Technologies Holdings (NASDAQ: ADN) is facing significant financial challenges that may prompt investors to reconsider their positions. With a staggering net income loss of 71.4M and total operating expenses reaching 62.3M against a mere 4.9M in total revenue, the company's financial health appears precarious. The capital lease obligations stand at 10.4M, contributing to total liabilities of 21.3M, which far exceed its net invested capital of 13.4M. Additionally, the free cash flow is negative at 36.7M, indicating that the company is burning through cash at an alarming rate. Analysts currently rate the stock as a "Hold," suggesting that while there may be potential, the risks are substantial. With a typical trading price around 2, investors should weigh these factors carefully before making any decisions. Advent Technologies is set to release its earnings today. Currently, the company's Average Receivables remain stable compared to last year. By September 26, 2024, Revenue Per Share is expected to rise to $2.66, although the Market Cap may decrease by about $12.2 million. With growing interest from passive investors in the electric utilities sector, Advent Technologies Holdings could be an appealing option for those looking to enter this market.
Advent Technologies financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Advent Technologies, including all of Advent Technologies's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Advent Technologies assets, the company is considered highly leveraged. Understanding the
composition and structure of overall Advent Technologies debt and outstanding corporate bonds gives a good idea of
how risky the capital structure of a business is and if it is worth investing in it. Please read more on our
technical analysis page.
Understanding Advent Total Debt
Advent Technologies liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Advent Technologies has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on Advent Technologies balance sheet include debt obligations and money owed to different Advent Technologies vendors, workers, and loan providers. Below is the chart of Advent main long-term debt accounts currently reported on its balance sheet.
You can use Advent Technologies Holdings
financial leverage analysis tool to get a better grip on understanding its financial position
How important is Advent Technologies's Liquidity
Advent Technologies
financial leverage refers to using borrowed capital as a funding source to finance Advent Technologies Holdings ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Advent Technologies financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Advent Technologies' owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Advent Technologies' financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Advent Technologies's total debt and its cash.
Is Advent Technologies valued appropriately by the market?
Advent Technologies reported the last year's revenue of 4.86
M. Reported Net Loss for the year was (71.4
M) with profit before taxes, overhead, and interest of 1.66
M.
Asset Breakdown
24.6 M
Non Current Assets Total
8.4 M
Total Current Assets
| Total Assets | 33 Million |
| Net Tangible Assets | 92.77 Million |
| Non Current Assets Total | 24.61 Million |
| Non Currrent Assets Other | 1.01 Million |
| Other Assets | 4.07 Million |
| Other Current Assets | 9,500 |
| Total Current Assets | 8.39 Million |
| Intangible Assets | 75,050 |
In the world of investing, the saying "cash is king" rings especially true for Advent Technologies Holdings (NASDAQ: ADN).
With a market capitalization of just $5.33 million and total liabilities of $21.3 million, the company faces significant financial challenges. Its recent total cash from operating activities shows a loss of $32.1 million, raising concerns about its ability to sustain operations. Additionally, the company's return on assets stands at a troubling -0.57, indicating inefficiencies in generating profit from its assets. Investors may want to reassess their positions, especially given the high probability of bankruptcy at 96%..
Is Advent Technologies growth real after the decline?
Advent Technologies Holdings has experienced a significant change in its stock behavior, with kurtosis dropping to 2.44 today. This suggests that the stock's price movements are becoming less volatile and more stable. Investors might question whether this stability reflects strong fundamentals or if it's just a temporary pause in market excitement. As Advent moves forward, the key challenge will be maintaining its growth momentum amid shifting market conditions. Currently, the stock shows above-average volatility, which can help investors time their trades. However, the heightened volatility during bear markets can negatively affect Advent's stock price, causing stress for investors as they watch their investments decline. This often leads to portfolio rebalancing as they seek to mitigate losses.
The Bottom Line
Although some companies in the utilities—renewable industry are either recovering or due for a correction, Advent may not be as strong as the others in terms of longer-term growth potentials. With an impartial outlook on the current market volatility, it may be better to hold off any inventment activity and neither take up nor exit any shares of Advent Technologies at this time. The Advent Technologies Holdings risk-reward trade off is not appealing enough to do any trading. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Advent Technologies.
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Raphi Shpitalnik is a Junior Member of Macroaxis Editorial Board. Raphael is a young entrepreneur who joined Macroaxis on a part-time basis at the beginning of the pandemic and eventually acquired a real taste for investing and fintech. He likes to analyze different equity instruments across a wide range of industries, focusing primarily on consumer products, sports, fintech, cannabis, and AI.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of Advent Technologies Holdings. Please refer to our
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