The Fed’s year-long rate hikes to curb inflation constrain the tech industry’s growth. Moreover, the recent banking crisis poses significant challenges to the tech industry. Therefore, I think Akoustis Technologies, Inc. (AKTS), Mynaric AG (MYNA), and Ondas Holdings Inc. (ONDS) might be best avoided now, given their weak fundamentals.
The recent failure of Silicon Valley Bank, a crucial source of funding for tech startups, has forced companies to quickly assess their financial risk and ability to operate in an already difficult economic climate. This has caused additional stress for tech businesses struggling with limited capital access.
Moreover, with a possible recession this year, the industry is expected to suffer from low demand.
Let’s delve deeper into the fundamentals of AKTS, MYNA, and ONDS to understand why it is wise to steer clear of these stocks.
Akoustis Technologies, Inc. (AKTS)
AKTS designs, develops, manufactures, and sells radio frequency filter products for the mobile wireless device industry in the United States, Asia, Europe, and internationally. It operates through two segments, Foundry Fabrication Services and RF Filters.
AKTS’ forward EV/Sales multiple of 8.12 is 197.5% higher than the industry average of 2.73. Its forward P/S multiple of 8.20 is 210.4% higher than the industry average of 2.64.
Its trailing-12-month asset turnover ratio of 0.16x is 73.8% lower than the 0.61x industry average.
AKTS’ revenue came in at $11.43 million during the six months that ended December 31, 2022. The company’s loss from operations increased 9.8% year-over-year to $30.86 million, whereas its net loss increased 7.7% year-over-year to $30.25 million. Its net loss per common share came in at $0.53.
Analysts expect AKTS’ EPS to be negative $0.22 for the third fiscal quarter that ended March 2023. Its revenue is expected to be $7.53 million for the same quarter. Also, the stock failed to surpass the revenue estimates in three of the trailing four quarters, which is disappointing.
The stock has declined 44.1% over the past year to close its last trading session at $3.18.
AKTS’ POWR Ratings reflect this bleak outlook. The stock has an overall F rating, equating to a Strong Sell in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
AKTS is graded an F in Quality and a D in Value and Stability. It is ranked #47 among 54 stocks in the Technology - Communication/Networking industry.
In addition to the POWR Ratings stated above, AKTS’ rating for Growth, Momentum, and Sentiment can be seen here.
Mynaric AG (MYNA)
Headquartered in Gilching, Germany, MYNA develops and manufactures advanced laser communication technology for long-distance data transmission between moving objects for wireless terrestrial, airborne, and space applications in Germany and internationally.
MYNA’s forward EV/Sales multiple of 38.9 is significantly higher than the industry average of 1.58. Its forward P/S multiple of 41.27 is significantly higher than the industry average of 1.26.
Its trailing-12-month asset turnover ratio of 0.06x is 93.1% lower than the 0.80x industry average.
During the six months that ended June 30, 2022, MYNA’s revenue decreased 98.1% year-over-year to €25 thousand ($27.25 thousand). Its operating loss increased 115.2% year-over-year to €34.95 million ($38.1 million), whereas total comprehensive loss for the period increased 109% year-over-year to €33.89 million ($36.94 million). Its loss per share increased 59.8% year-over-year to €6.28.
MYNA’s EPS is expected to decline 374.2% year-over-year to negative $13.21 for the fiscal year ending December 2022. Its revenue is expected to be $3.41 million for the same year.
The stock has plunged 40.7% over the past year to close the last trading session at $6.10.
It’s no surprise that MYNA has an overall rating of D, which translates to a Sell in our POWR Ratings system.
MYNA also has an F grade for Quality and Value and a D in Stability. It is ranked #52 in the same industry.
Click here to see the POWR Ratings of MYNA (Growth, Sentiment, and Momentum).
Ondas Holdings Inc. (ONDS)
ONDS provides private wireless, drone, and automated data solutions. It operates in two segments, Ondas Networks and Ondas Autonomous Systems.
ONDS’ trailing-12-month P/S multiple of 20.07 is 610.8% higher than the industry average of 2.82. Its trailing-12-month EV/Sales multiple of 25.01 is 764.9% higher than the industry average of 2.89.
Its trailing-12-month asset turnover ratio of 0.02x is 96.8% lower than the 0.61x industry average.
During the fiscal year that ended December 31, 2022, ONDS’ net revenues decreased 26.9% year-over-year to $2.13 million. The company’s operating loss increased 286.3% year-over-year to $69.43 million. Moreover, its net loss increased 387.5% year-over-year to $73.24 million, while its net loss per share rose 293.2% year-over-year to 1.73.
The stock failed to surpass the EPS estimates in three of the trailing four quarters.
ONDS has lost 84.9% over the past year to close the last trading session at $1.01.
ONDS’ weak fundamentals are reflected in its POWR Ratings. The stock has an overall F rating, which equates to a Strong Sell in our proprietary rating system.
It also has an F grade for Quality and a D for Momentum, Stability, Sentiment, growth, and Value. ONDS is ranked #48 in the same industry.
For additional POWR Ratings of ONDS, click here.
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AKTS shares were trading at $3.12 per share on Wednesday afternoon, down $0.06 (-1.89%). Year-to-date, AKTS has gained 10.64%, versus a 7.33% rise in the benchmark S&P 500 index during the same period.
About the Author: Nidhi Agarwal
Nidhi is passionate about the capital market and wealth management, which led her to pursue a career as an investment analyst. She holds a bachelor's degree in finance and marketing and is pursuing the CFA program. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities.
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