Stocks’ Details

MicroVision, Inc.

ISS and Glass Lewis Recommend Approval of MicroVision Proxy Proposals: MicroVision, Inc. (NASDAQ: MVIS) is a US-based company that develops laser scanning technology for projection, 3D sensing, and image capture. As on 27 October 2020, the market capitalization of the company stood at ~US$378.34 million. The company has announced that the Institutional Shareholder Services Inc. and Glass Lewis have recommended MicroVision shareholders to approve the company proposals described in its Proxy Statement filed on 25 August 2020. Under the proposal, the company plans to increase the authorized number of shares of its common stock to explore strategic alternatives.

Quarterly Performance (For the Period Ended 30 June 2020): During the second quarter ended 30 June 2020, the company reported a decline in revenue to $0.6 million, compared to $1.2 million for the second quarter of 2019. In the same time span, net loss of the company went down to $2.3 million from a net loss of ~$9.0 million in the pcp. The company ended the quarter with a cash balance of $7.8 million.  

Quarterly Financial Highlights (Source: Company Reports)

Stock Recommendation: The company is exploring strategic alternatives to maximize the value for its shareholders, including the sale of a product vertical, strategic investment, or potential sale or merger. The company is likely to release its results for the third quarter on 29 October 2020. As per NASDAQ, the stock of MVIS is trading close to its 52-weeks’ high level of $3.45. The stock of MVIS gave a return of 29.55% in the past three months and a return of 37.69% in the past one month. On a technical front, the stock of MVIS has a support level of ~$0.192 and a resistance level of ~$2.98. Considering the current trading levels, its considerations for strategic alternatives, and softer market conditions, we suggest investors to keep an eye on the business activities and recommend an ‘Avoid’ rating on the stock at the closing price of $2.63, up by 3.54% on 27 October 2020.

Cloudera, Inc.

Introduction of Analytic Experiences: Cloudera, Inc. (NYSE: CLDR) is a US-based software company that provides a software platform for data engineering, data warehousing, machine learning and analytics that runs in the cloud or on premises. As on 27 October 2020, the market capitalization of the company stood at ~$3.07 billion. The company has announced new and upcoming enterprise data cloud services on Cloudera Data Platform, which will provide analytic experiences for data specialists. These include CDP Data Engineering; CDP Operational Database; and CDP Data Visualization.

Quarterly Financial Performance (For the Quarter Ended 31 July 2020): During the second quarter ended 31 July 2020, the company reported a YoY increase of 9% in revenue to $214.3 million, with an increase of 12% in recurring revenue. In the same time span, GAAP loss from operations went down to $36.5 million from $89.1 million in the pcp and operating cash flow went up to $32.4 million from a negative $33.0 million in the pcp.  The company exited the period with a total cash balance of $568.7 million.

Quarterly Financial Highlights (Source: Company Reports)

Guidance: The company has provided guidance for the third quarter and expects total revenue to be in the range of $207 million to $210 million and Non-GAAP operating income to be in the range of $27 million - $31 million. It also expects Non-GAAP net income per share in the range of $0.32 - $0.35.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation (Illustrative)

EV/Sales Multiple Based Relative Valuation (Source: Refinitiv, Thomson Reuters)

Note: All the forecasted figures are taken from Thomson Reuters, NTM: Next Twelve Months

Stock Recommendation: The company is participating in the fastest-growing segment of the market through cloud-native services. The stock of CLDR gave a negative return of 10.61% in the last three months and a negative return of 7.87% in the last one month. On a technical front, the stock of CLDR has a support level of ~$8.73 and a resistance level of ~$11.75. We have valued the stock using the EV/Sales multiple based illustrative relative valuation and have arrived at a target price with limited upside (in percentage terms). Considering the current trading levels, volatile returns in the past three months, and guidance for the third quarter, we suggest investors to wait for better entry levels and give an ‘Expensive’ rating on the stock at the current market price of $9.94, up by 1.84% on 27 October 2020.

Plug Power, Inc.

Plug Power Develops New GenDrive Products for The European Market: Plug Power, Inc. (NASDAQ: PLUG) is an American company, engaged in the designing and manufacturing of hydrogen fuel cell systems that replace conventional batteries in equipment and vehicles powered by electricity. As on 27 October 2020, the market capitalization of the company stood at ~$5.93 billion. The company has expanded its CE-certified GenDrive product line with the addition of three new fuel cell solutions, including GenDrive 1600-80H CE for class-1 trucks up to 5 tons, GenDrive 3342-24 CE for class-3 trucks, and GenDrive 6100-48 CE for AGVs and tow-tractors, for European industrial and material handling vehicles. The additions will support the growing customer set and applications within the European market.

Expansion of Liquid Hydrogen and LNG Business with Chart Inc: The company has executed a master supply agreement with Chart Industries, Inc. wherein Chart will supply liquid hydrogen storage and transport equipment to Plug.

Quarterly Performance: During the second quarter, the company reported record gross billings of U$72.4 million, reflecting an increase of 24% in pcp and reported net revenue of $68.07 million. In the same time span, gross profit of the company went down to $5.07 million from $10.62 million. Despite the COVID-19 global crisis, the company has deployed over 5,000 fuel cell units year-to-date with customers and is leveraging decent relationships with supply chain.

Quarterly Financial Highlights (Source: Company Reports)

Valuation Methodology: EV/Sales Multiple Based Relative Valuation (Illustrative)

EV/Sales Multiple Based Relative Valuation (Source: Refinitiv, Thomson Reuters)

Note: All the forecasted figures are taken from Thomson Reuters, NTM: Next Twelve Months

Stock Recommendation: The company has re-affirmed its guidance for FY24 and expects revenue of $1.2 billion. As per NASDAQ, the stock of PLUG is trading close to its 52-weeks’ high level of $19.02. On a technical front, the stock of PLUG has a support level of ~$10.78 and a resistance level of ~$17.24. The stock of PLUG gave a return of 83.43% in the past three months and a return of 26.90% in the past one month. We have valued the stock using the EV/Sales multiple based illustrative relative valuation and have arrived at a downside of lower double-digit (in percentage terms). For the said purposes, we have considered Bloom Energy Corp (NYSE: BE), ReneSola Ltd (NYSE: SOL), etc., as peers. Considering the current trading levels, softer market conditions and long-term outlook, we suggest investors to wait for better entry levels and give an ‘Expensive’ rating on the stock at the closing price of $14.785, up by 2.28% on 27 October 2020.

Comparative Price Chart (Source: Refinitiv, Thomson Reuters)

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