Mohawk Group (NASDAQ: MWK) Appears To Be At
Bargain Prices
April 13, 2020 -- InvestorsHub NewsWire -- via Spotlight Growth --
Investors get very emotional when it comes to their money –
especially losing it. Fear of loss (and not understanding
stock valuation) drives investors to sell down to bargain basement
prices. Evidence of this is the stock market's long history
of going from extreme highs to extreme lows and back again.
Investors will always have news to drive their emotions (and
stock prices) to extremes. In the 1990's, stocks of internet
companies went to the stratosphere. Eventually fear drove
internet stocks, including those with bright futures and those that
didn't, down to very low valuations. Investors who recognized
the quality companies were able to take advange
of excellent prices.
MWK Falls Victim to Overall Global Stock Market Sell-Off
Despite Revenue Growth
A growth company now appearing at bargain prices is Mohawk Group
Holdings, Inc. (NASDAQ:
MWK), a tech-based consumer
goods startup. The Mohawk Group uses artificial
intelligence on their proprietary ecommerce platform to get the
right products in front of the right people. Using
proprietary AI technology, the company can launch new products in
just 6 to 8 months. That is much faster than the typical
release for a new consumer packaged goods product, which still
relies on old methods that take 1 to 2 years.
Source: Mohawk Group
Mohawk's third-party logistics network can reach over 90% of the
U.S. population in one-to-two days with Prime-certified shipping.
In just six years since starting operations, they have become
one of the largest sellers on Amazon.
Mohawk's technical advantage is starting to show. Sales are growing at a blistering pace. Revenue
has tripled over the past three years. The company is a
startup with a market capitalization of just $29 million, so they
are still too small for professional fund managers to invest.
That gives nimble individual investors an advantage, the
opportunity to purchase a great growth stock before professionals
can.
MWK Appears to Be Undervalued Based on Revenue Growth,
Price-to-Sales Ratio at 0.20
On April 9, 2020, Mohawk Group released preliminary first quarter
2020 net revenue between $25.0 million and $26.0 million.
This represents year-over-year growth of over 40%. The Wall Street
average estimate for MWK Q1 net revenues is at $23.4 million,
according to an analyst poll by Capital IQ.
A Price-to-Sales ratio between 1 and 2 is considered good, and
excellent if it's below 1. The Price-to-Sales ratio for MWK
stock is at now at just 0.20. This shows investors can buy an
early stage growth stock at deeply discounted prices.
During the recent fourth quarter earnings conference call,
Co-Founder and CEO Yaniv Sarig discussed quarterly results and
outlook. He said, “We are pleased with our fourth quarter
results and our strong finish to the year. 2019 marked a year of
progress on our strategic priorities that included 32 new products
launched, product category expansion and the growth of our AIMEE
software platform. These activities fueled top-line growth of
over 56% with improved Adjusted EBITDA for the year while we also
continued to invest for the future.
Source: Yahoo Finance
Looking ahead, we believe that our differentiated A.I. driven
business model provides Mohawk with a tremendous amount of
opportunity to grow market share in existing and new categories and
to generate meaningful profitability and increased shareholder
value over the long-term.”
In fiscal 2019, Mohawk reported sales of $114 million, up 35%
year-over-year. They also released 32 new products in
2019. Mohawk is using AI technology to position itself at the cutting
edge of the consumer packaged-goods industry.
Recently, the Financial Times released
its list of the top 500 fastest growing companies in 2020. Mohawk
made the list at #114. This beat out other notable major
companies:
- Uber Technologies, Inc. (NYSE:
UBER) ranked #144
- Tesla, Inc. (NASDAQ:
TSLA) #158
- Twilio, Inc. (NYSE: TWLO) #205
- Grubhub, Inc. (NYSE:
GRUB) #299
- Canada Goose (NYSE: GOOS) #310
- Netflix, Inc. (NASDAQ: NFLX) #371
Mohawk's fast growth shows its use of technology is a
fundamental advantage. Mohawk is in a position
to beat the competition for years to come.
More About Mohawk Group Holdings, Inc.
Mohawk Group Holdings, Inc. and subsidiaries (“Mohawk”) is a
rapidly growing technology-enabled consumer products company that
uses machine learning, natural language processing, and data
analytics to design, develop, market and sell products. Mohawk
predominantly operates through online retail channels such as
Amazon, and Walmart. Mohawk has incubated and grouped four owned
and operated brands: hOme, Vremi, Xtava and RIF6. Mohawk sells
products in multiple categories, including home and kitchen
appliances, kitchenware, environmental appliances (i.e.,
dehumidifiers and air conditioners), beauty-related products and,
to a lesser extent, consumer electronics. Mohawk was founded on the
premise that if a company selling consumer packaged goods was
founded today, it would apply artificial intelligence and machine
learning, the synthesis of massive quantities of data and the use
of social proof to validate high caliber product offerings as
opposed to over-reliance on brand value and other traditional
marketing tactics.
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