Shareholders of SOS Ltd. (SOS, Financial) and Microvast Holdings Inc. (MVST, Financial) have seen their assets decline in value dramatically over the past couple of years, underperforming the S&P 500 Index substantially. It also appears that their profitability is not improving and their financial conditions could be better. In essence, there is not much to be positive about. Furthermore, sell-side analysts on Wall Street have issued lackluster ratings for these stocks. Therefore, shareholders may want to consider reducing their holdings.
SOS
SOS (SOS, Financial) is a Chinese software company that provides marketing data and technology solutions, as well as emergency rescue services and insurance products and health care information, to insurance companies, medical and financial operators and individuals. The company also focuses on cryptocurrency mining as well as blockchain-based insurance and security management businesses.
Shares were down 2% over the past year and 97% over the past three years, underperforming the S&P 500 by 33% and 168%.
The company does not pay dividends. The balance sheet doesn’t seem to stand on solid financial pillars as an Altman Z-Score of -3,147.63 indicates the stock is in the distress zone, which implies the business could go bankrupt within two years.
GuruFocus rated its profitability 1 out of 10, driven by a three-year revenue growth rate of -62.1% that underperforms the industry median of 5.7%. This indicates SOS has some tough competition. Furthermore, the company's cryptocurrency and mining services are going to feel the blow of the Chinese government's decision to ban cryptocurrency transactions.
Shares traded around $2.44 at close on Friday for a market capitalization of $456.58 million and a 52-week range of $1.21 to $15.88.
The 14-day relative strength index of 53 indicates the stock is still far from oversold levels despite the sharp decline in the share price.
On Wall Street, the stock has one recommendation rating of sell.
Microvast Holdings
Microvast Holdings (MVST, Financial) is a Stafford, Texas-based manufacturer of battery systems for electric vehicles and energy storage systems.
Shares have fallen 10% over the past year and by 27% over the past two years, underperforming the S&P 500 by 40% and 77%.
The company doesn’t pay dividends. The balance sheet doesn’t seem solid as it was burdened with more than $225 million in total debt while having only $14 million in cash on hand.
Regarding profitability, the company's profit and operating margins are negative. The turnover and profit were impacted by the worldwide semiconductor shortage and higher manufacturing costs following the increase in price of several raw materials. It seems these effects will be longer-lasting than initially anticipated. The company must adjust its inventory to make it more adequate to the Chinese market, where prices are much lower than overseas. This is something that doesn't usually occur overnight. Therefore, the company might lose a number of opportunities the market will create going forward thanks to the increasing adoption of electrification amid auto manufacturers and energy storage industries.
The stock closed at $7.88 on Friday for a market capitalization of $2.37 billion and a 52-week range of $7.38 to $15.91.
The 14-day relative strength index of 42 indicates the stock is still far from oversold levels despite the decline.
On Wall Street, the stock has one recommendation rating of sell.
