Switch Inc

Switch Inc (NYSE: SWCH) is a US-based technology infrastructure company focused on designing, constructing, and operating hyper-scale data centres.

Investment Rationale – EXPENSIVE at USD 24.92

• The stock price almost jumped 19% in a single day, boosted by the release of Q2 FY21 results. Moreover, SWCH is currently trading very close to the 52-week high of USD 25.61, making it difficult for the stock price to show any further upside potential.
• The net income had shown a significant decline during Q2 FY21 when compared with Q2 FY20.
• Furthermore, the earnings per share had missed the consensus estimates during Q2 FY21.
• From a technical standpoint, a 14-day RSI of ~82.86 is falling in the overbought zone and indicating a correction in the stock price.
• Moreover, the stock price is hovering around the upper Bollinger band, indicating a correction in the stock price.

One Year Share Price Chart

 (Data Source: Refinitiv, Analysis by Kalkine Group)

Conclusion

Based on the overstretched valuation and weak technical indicators, we have given an “EXPENSIVE” recommendation on Switch Inc at the closing market price of USD 24.92 (as on 9 August 2021).

Synaptics Incorporated

Synaptics Incorporated (NASDAQ: SYNA) develops human interface solutions that allow touch, display, fingerprint, video, audio, and voice functions for smartphones and PC.

Investment Rationale – EXPENSIVE at USD 169.33

• On the profitability front, the net margin and the operating margin remained lower than the industry median during FY21.
• The stock is trading near the 52-week high of USD 173.12, which could raise doubts regarding the upside potential.
• From a technical standpoint, a 14-day RSI of ~68.70 is inching towards an overbought zone and indicating a correction in the stock price.
• The stock price is trading above the upper Bollinger band, suggesting a correction in the stock price.

One Year Share Price Chart

(Data Source: Refinitiv, Analysis by Kalkine Group)

Conclusion

Based on the overstretched valuations, and weak profitability levels, we have given an “EXPENSIVE” recommendation on Synaptics Incorporated at the closing market price of USD 169.33 (as on 9 August 2021).

FireEye Inc

FireEye Inc (NASDAQ: FEYE) is a cybersecurity firm that offers solutions for networks, endpoints, and email.

Investment Rationale – AVOID at USD 17.81

• FEYE had consistently reported a net loss from the last four years. Moreover, the consensus estimates had indicated that it would report a net loss for two more years.
• In terms of a technical indicator, the current price of FEYE is sustaining below the 20-day EMA (USD 19.84), reflecting a bearish price momentum.
• The top-line business would get adversely impacted as the Company had announced the sale of the FireEye Products business to a consortium led by Symphony Technology Group.
• The debt-to-equity ratio of FEYE stood at 1.36x during Q1 FY21, while the industry median remained 0.31x.

One Year Share Price Chart

 (Data Source: Refinitiv, Analysis by Kalkine Group)

Conclusion

Based on the unfavourable technical stance and loss-making nature of the Company, we have given an “AVOID” recommendation on FireEye Inc at the closing market price of USD 17.81 (as on 9 August 2021).

Microvast Holdings Inc

Microvast Holdings Inc (NASDAQ: MVST) is a technology innovator which is engaged in the manufacturing of lithium-ion battery solutions.

Investment Rationale – AVOID at USD 13.70

• From a technical standpoint, a 14-day RSI of ~65.72 is inching towards an overbought zone and indicating a correction in the stock price.
• The stock price is trading above the upper Bollinger band, suggesting a correction in the stock price.
• The Company had not generated any revenue as the operations had not been commercialized yet.
• According to the consensus estimates, MVST will remain loss-making for three more years.

One Year Share Price Chart

 (Data Source: Refinitiv, Analysis by Kalkine Group)

Conclusion

Based on the poor fundamentals and negligible top-line revenue of the Company, we have given an “AVOID” recommendation on Microvast Holdings Inc at the closing market price of USD 13.70 (as on 9 August 2021).

Cornerstone OnDemand Inc

Cornerstone OnDemand Inc (NASDAQ: CSOD) is a fast-growing provider of cloud-based talent-management solutions.

Investment Rationale – EXPENSIVE at USD 56.55

• The Return on Equity and Return on Assets remained in the negative territory during Q2 FY21.
• The stock price is trading very close to the 52-weeks high of USD 57.00, making it difficult for the stock price to show any further upside potential.
• From a technical standpoint, the stock is hovering around the upper Bollinger band, indicating that the stock could decline in the near term.
• Moreover, the 14-day RSI of ~78.09 is suggesting an overbought zone.

One Year Share Price Chart

 (Data Source: Refinitiv, Analysis by Kalkine Group)

Conclusion

Based on the overstretched valuations, uncertain outlook, and unfavourable technical indicators, we have given an “EXPENSIVE” recommendation on Cornerstone OnDemand Inc at the closing market price of USD 56.55 (as on 09 August 2021).

Dicerna Pharmaceuticals Inc

Dicerna Pharmaceuticals Inc (NASDAQ: DRNA) is a biotechnology company focused on addressing liver problems.

Investment Rationale – AVOID at USD 23.83

• The stock is highly volatile as it dropped almost 40% in the last two trading sessions.
• In terms of a technical indicator, the 20-days exponential moving average of USD 35.22 is suggesting a correction in the stock price.
• DRNA had consistently reported a net loss from the last four years. Moreover, the consensus estimates had indicated that it would report a net loss for four more years.
• The Company had widened the net loss during Q2 FY21 as compared to Q2 FY20.

One Year Share Price Chart

 (Data Source: Refinitiv, Analysis by Kalkine Group) 

Conclusion

Based on the volatile nature of the stock and weak profitability, we have given an “AVOID” recommendation on Dicerna Pharmaceuticals Inc at the closing market price of USD 23.83 (as on 9 August 2021).

*The reference data in this report has been partly sourced from REFINITIV.

*Dividend Yield may vary as per the stock price movement.

Disclaimer - This report has been issued by Kalkine Pty Limited (ABN 34 154 808 312) (Australian financial services licence number 425376) (“Kalkine”) and prepared by Kalkine and its related bodies corporate authorised to provide general financial product advice. Kalkine.com.au and associated pages are published by Kalkine.

Any advice provided in this report is general advice only and does not take into account your objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your objectives, financial situation and needs before acting upon it.

There may be a Product Disclosure Statement, Information Statement or other offer document for the securities or other financial products referred to in Kalkine reports. You should obtain a copy of the relevant Product Disclosure Statement, Information Statement or offer document and consider the statement or document before making any decision about whether to acquire the security or product.

You should also seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice in this report or on the Kalkine website. Not all investments are appropriate for all people.

The information in this report and on the Kalkine website has been prepared from a wide variety of sources, which Kalkine, to the best of its knowledge and belief, considers accurate. Kalkine has made every effort to ensure the reliability of information contained in its reports, newsletters and websites. All information represents our views at the date of publication and may change without notice.

Kalkine does not guarantee the performance of, or returns on, any investment. To the extent permitted by law, Kalkine excludes all liability for any loss or damage arising from the use of this report, the Kalkine website and any information published on the Kalkine website (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine hereby limits its liability, to the extent permitted by law, to the resupply of services.

Please also read our Terms & Conditions and Financial Services Guide for further information.

On the date of publishing this report (referred to on the Kalkine website), employees and/or associates of Kalkine do not hold interests in any of the securities or other financial products covered on the Kalkine website.