Long-established in the Software industry, SOS Ltd (SOS, Financial) has enjoyed a stellar reputation. However, it has recently witnessed a decline of 0.39%, juxtaposed with a three-month change of 29.57%. Fresh insights from the GuruFocus Score Rating hint at potential headwinds. Notably, its diminished rankings in financial strength, growth, and valuation suggest that the company might not live up to its historical performance. Join us as we dive deep into these pivotal metrics to unravel the evolving narrative of SOS Ltd.
Decoding the GF Score
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- 1. Financial strength rank: 7/10
- 2. Profitability rank: 2/10
- 3. Growth rank: 0/10
- 4. GF Value rank: 2/10
- 5. Momentum rank: 8/10
Based on the above method, GuruFocus assigned SOS Ltd the GF Score of 54 out of 100, which signals poor future outperformance potential.
Understanding SOS Ltd's Business
SOS Ltd is engaged in the provision of emergency rescue business providing emergency healthcare services, emergency roadside assistance, emergency living assistance, and other rescue services in China. The company's segment includes Insurance marketing; Commodity trading and others. It generates maximum revenue from the Commodity trading segment. Its services are sold to corporate clients and individual members. Its services include SOS medical rescue card, SOS auto rescue card, SOS financial rescue card, SOS life rescue card, SOS cloud call center, and SOS big data management cloud.
Profitability Breakdown
SOS Ltd's low Profitability rank can also raise warning signals. Additionally, SOS Ltd's Gross Margin has also declined over the past five years, as evidenced by the data: 2018: 74.58; 2019: 18.29; 2020: 0; 2021: 4.44; 2022: -4.07. This trend underscores the company's struggles to convert its revenue into profits.
With a Piotroski F-Score of 2, SOS Ltd's financial health appears concerning. This score, rooted in Joseph Piotroski's nine-point scale, evaluates a firm's profitability, liquidity, and operating efficiency. Given its rating, SOS Ltd might be facing challenges in these areas.
Growth Prospects
A lack of significant growth is another area where SOS Ltd seems to falter, as evidenced by the company's low Growth rank. The company's revenue has declined by -27.8 per year over the past three years, which underperforms worse than 93.14% of 2390 companies in the Software industry. Stagnating revenues may pose concerns in a fast-evolving market.
Next Steps
Given the company's financial strength, profitability, and growth metrics, the GuruFocus Score Rating highlights the firm's unparalleled position for potential underperformance. As value investors, it's crucial to consider these factors when making investment decisions. Will SOS Ltd overcome these challenges, or will it succumb to the pressures of the market? Only time will tell.
GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
