As of the 24th of September 2023, Wisekey International (USA Stocks: WKEY), a software company in the technology sector, has been grappling with a challenging financial landscape. With a market capitalization of just $22.5M, the company has been struggling with a negative return on assets of 0.11 and a return on equity of -0.3. This is further reflected in the company's EBITDA, which has suffered a loss of $11.1M. The company's profit margin is also in the red, standing at -1.15. This is despite a quarterly revenue growth of 0.318, bringing in revenue of $23.8M. However, the company's selling and marketing expenses amount to $3.8M, which may be contributing to the overall financial strain. Wisekey's cash and short-term investments stand at $4.1M, which may not be sufficient to cover the company's expenses and liabilities. The company's earnings per share (EPS) are also negative, standing at -2.4. This is mirrored in the diluted EPS, which is also -2.4. The company's stock has been trading at a typical day price of $1.87, with a median day price of $1.9. This is significantly lower than the Wall Street target price of
$30 and the analyst's lowest estimated target price of $10. The company's 50-day moving average is $3.8888, indicating a downward trend in the stock's price. The accumulation distribution of Wisekey's stock is
956.89, suggesting that the stock is being sold more than it is being bought. This is further evidenced by the short ratio of 0.61, indicating that investors are short selling the stock. Given this data, it may be time for investors to consider pivoting towards EMCORE (USA Stocks: EMKR), a company in the semiconductors industry. EMCORE may offer a more promising investment opportunity, particularly for those looking for stronger
financial performance and a more positive outlook. Today, we may witness evidence suggesting that EMCORE's recovery from its recent decline could be slower than anticipated, as its shares fell 4% compared to Wisekey International's 1.09%. Given that many rational traders are attempting to steer clear of the software space, it is logical to delve deeper into Wisekey International Holding and compare its performance against EMCORE and other similar entities. We will examine some of the competitive aspects of both Wisekey and EMCORE.
Out of tens of thousands of stocks, funds, and ETFs that trade on global exchanges each represent an individual company which you can analyze using comparative analysis. To determine which one of the two entities, such as Wisekey or SemiLEDS is a better fit for your portfolio, analyzing a few basic fundamental indicators is a good first step.
How important is Wisekey International's Liquidity
Wisekey International
financial leverage refers to using borrowed capital as a funding source to finance Wisekey International Holding ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Wisekey International 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 Wisekey International's 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 Wisekey International's 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 Wisekey International's total debt and its cash.
Correlation Between Wisekey and SemiLEDS
In general, Stock analysis is a method for investors and traders to make individual buying and selling decisions. Stock correlation analysis is also essential because it can help investors realize that they may not be as diversified as they think. Risk management strategies are usually required to make sure all portfolios are properly aligned against their risk tolerance level. You can consider holding Wisekey International together with similar or unrelated positions with a negative correlation. For example, you can also add SemiLEDS to your portfolio. If SemiLEDS is not perfectly correlated to Wisekey International it will diversify some of the market risks out of the positively correlated stocks in your portfolio. However, the disadvantage of this sort of hedging is that it can potentially affect your investment returns throughout market cycles. When Wisekey International, for example, performs excellent and delivers stable returns, the negatively correlated position you locked in as a hedge may drag your returns down.
Are you currently holding both Wisekey International and SemiLEDS in your portfolio? Please note if you are using this as a pair-trade strategy between Wisekey International and SemiLEDS, watch out for correlation discrepancy over time. Relying on the historical price correlations and assuming that it will not change may lead to short-term losses. Please check
pair correlation details between WKEY and LEDS for more information.
What is driving Wisekey International Investor Appetite?
Revenue is income that a firm generates from business activities such us rendering services or selling goods to customers. It is a crucial part of a business and an essential item when evaluating a company's financial statements. Revenues from a firm's primary business operations can be reported on the income statement as sales revenue, net sales, or simply sales, depending on the industry in which a given company operates.
Revenue is typically recorded when cash or cash equivalents are exchanged for services or goods and can include product or services discounts, promotions, as well as early payments on invoices or services rendered in advance.
Revenue Breakdown
Let me now analyze Wisekey International revenue. Based on the latest financial disclosure, Wisekey International Holding reported 23.2
M of revenue. This is 99.43% lower than that of the Software sector and 99.58% lower than that of the
Information Technology industry. The revenue for all United States stocks is 99.75% higher than that of the company. As for EMCORE we see revenue of 124.13
M, which is 97.73% lower than that of the Information Technology
| WKEY | 23.2 Million | 0.55 |
| Sector | 4.08 Billion | 96.51 |
| EMKR | 124.13 Million | 2.94 |
Wisekey International Holding (NASDAQ: WKEY) has been underperforming in the market with a negative risk-adjusted performance of -0.14 and a market risk-adjusted performance of -0.83.
The company's return on assets stands at -0.11, while its return on equity is -0.3, indicating a lack of profitability. The firm's earnings per share are reported as losses of $2.4, further suggesting financial instability. On the other hand, EMCORE (NASDAQ: EMKR) presents a more promising investment opportunity. Wisekey's current ratio is 3.03X, indicating a healthy short-term liquidity position, but its total debt of $14.12M and a high probability of bankruptcy at 63.81% raise concerns about its long-term
financial health. Wisekey's quarterly revenue growth stands at 0.318, but the company's total cash from operating activities is reported as a loss of $17.1M. With a book value of 5.667 and a price to book ratio of 0.62X, the stock appears undervalued. However, the company's total assets of $21.66M are significantly lower than its Wall Street target price of
$30. Given these factors, it may be time for investors to pivot towards EMCORE. Despite the potential upside of 5.73 for Wisekey, the company's financial instability and high bankruptcy risk make EMCORE a more secure investment choice. .
Another setback for Wisekey International investors
Wisekey International Holding stock has once again left its investors disappointed. The maximum drawdown for the stock has hit a significant low of 25.8 as of today, indicating a substantial decrease in the stock's value. This decline clearly signals the stock's underperformance and volatility, thereby increasing the risk factor associated with this investment. Consequently, investors are advised to proceed with caution when considering Wisekey International Holding stock. Wisekey International Holding exhibits very low volatility, with a skewness of -1.05 and a kurtosis of 2.83. However, we recommend that investors further study Wisekey International Holding's technical indicators to ensure all market information is available and reliable. Understanding different
market volatility trends often helps investors time the market. Proper use of volatility indicators allows traders to measure Wisekey International's stock risk against market volatility during both bullish and bearish trends. The heightened level of volatility that accompanies bear markets can directly impact
Wisekey International's stock price, adding stress for investors as they watch their shares' value plummet. This typically compels investors to rebalance their portfolios by purchasing different stocks as prices fall.
Our Takeaway on Wisekey International Investment
While many other companies in the semiconductors industry are either recovering or due for a correction, Wisekey International may not be performing as strong as the other in terms of long-term growth potentials. To conclude, as of the 30th of September 2023, our research shows that Wisekey International is a rather unstable investment opportunity with a
above average probability of bankruptcy in the next two years. From a slightly different view, the entity currently appears to be
undervalued. Our latest 90 days
buy-or-sell advice on the company is
Cautious Hold.
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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 Wisekey International Holding. Please refer to our
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