Simply Wall Street has just posted their update for AR9. The current quarter should see some "above average" revenue however the sustainability remains in question. It will be interesting to see if at the end of the current quarter whether we have more than 12 months of operating cash.
archTIS AR9
Share Price 7 Day 1 Year
0.12 9.5% -32.4% New major risk - Revenue and earnings growth Earnings have declined by 26% per year over the past 5 years.
This is considered a major risk. Ultimately, shareholders want to see a good return on their investment and that generally comes from sharing in the company's profits. If profits are declining over an extended period, then in most cases the share price will decline over time unless the company can turn around its fortunes. A trend of falling earnings can be very difficult to turn around. If the company is well already established it may also be a sign the company has matured and is in decline. In addition, if the company pays dividends it will also likely need to reduce or cut them, striking a dual blow to total shareholder returns.
Currently, the following risks have been identified for the company:
Major Risks
- Less than 1 year of cash runway based on free cash flow trend (-AU$5.1m free cash flow).
- Earnings have declined by 26% per year over the past 5 years.
Minor Risks
- Share price has been volatile over the past 3 months (15% average weekly change).
- Shareholders have been diluted in the past year (8.3% increase in shares outstanding).
- Revenue is less than US$5m (AU$6.4m revenue, or US$4.1m).
- Market cap is less than US$100m (AU$32.8m market cap, or US$21.2m).
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