Entertainment technology company Color Star Technology (CSCW) is focusing on developing its Metavers project of late. However, its stock has declined, reaching a 52-week low in the last trading session. But given the growing digital reality, will penny stocks be able to build momentum soon? Let’s talk.
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New York City-based entertainment and education company Color Star Technology Co. Ltd. (CSCW) Focuses on the application of technology and artificial intelligence (AI) in the entertainment industry and is currently making significant investments in the development of its Metavers project. In January, CSCW announced the launch of a global open beta version of its entertainment metavers platform “Color World” and “Color World” software tokens, called “Color Tickets”, allowing users around the world to use color tickets. World app. Color World features include in-game social features, long distance conferencing, celebrity interactions and a marketplace. The company has entered into several partnerships since launching the Metaverse platform to enhance the experience of the virtual world.
CSCW recently announced a strategic partnership between Shenzhen Qian Hai Blue Earl Business Aviation Service Co. and its affiliate Color Sky Entertainment Ltd. to establish a virtual airport at Color Star’s Color World, which will become a digital aviation service and other related business hub.
However, despite progress in creating its Metavers project, the stock has been declining. CSCW’s share price fell 86.3% last year and 66% year-over-year. The stock fell 29.2% last month and reached its 52-week low of $ 0.16 yesterday, closing the session at $ 0.17.
Here’s how to shape CSCW’s performance in the near term:
Poor profitability
CSCW’s 38.98% gross profit margin is 21.9% lower than the 49.91 industry average. Also, its negative 86.06% and 121.44% EBITDA and net income margin of 13.78% and 5.69% respectively are significantly lower than the industry average.
And CSCW’s negative 23.08%, 10.16%, and 14.29% compared with the distinct ROE, ROA, and ROTC 7.39%, 3.50%, and 4.78% industry averages.
Black bottom line
Of CSCW trailing-12-months Revenue and gross profit stood at 6.78 million and $ 2.64 million, respectively. However, its 12-month net income came in negative at $ 8.24 million, while its EPS was negative at $ 0.12. Also, its EBITDA and operating income amounted to negative 5.84 million and $ 9.56 million, respectively. In addition, the cash from its previous 12-month operation was negative $ 2.80 million.
Adverse POWR rating
CSCW has an overall F rating, which translates into a strong sales under our ownership. POWR rating Method. POWR ratings are calculated taking into account 118 individual factors, each factor weighing to an optimal degree.
The stock has a D grade for durability, which is consistent with its 2.73 beta.
CSCW has an F grade for quality, consistent with its negative profit margin.
In 26 stocks Outsourcing – Education Services Industry, CSCW ranked last.
Aside from what I said above, one can also see the CSCW grades for sentiment, growth, momentum and quality. Here.
See the top-rated stocks in the outsourcing-education services industry Here.
The last row
While companies around the world are investing in Metaverse, Consumers are skeptical. According to Forrester’s survey, almost one-third of online adults (34% US and 28% UK) are excited about Metavers, and less than 30% (29% US and 25% UK) think Metavers would be good for society. Customers are not yet familiar with the meta concept, and thus it may take some time to reap the benefits of CSCW’s Metaverse project. In addition, the company may face higher competition from large technology companies. Also, considering its eroded margins, I think it might be better to avoid the stock now.
How does Color Star Technology Co. Ltd. (CSCW) stack up against its counterparts?
Although CSCW has an overall POWR rating of F, one might want to consider investing in education services stocks with an A (strong buy) rating in the following outsourcing: Lincoln Educational Services Corporation (Lincoln Educational Services Corporation).LINC) And Universal Technical Institute Inc. (UTI)
What to do next?
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CSCW shares were unchanged in premarket trading on Tuesday. Year-to-date, the CSCW is down -66.17%, compared to the -7.09% increase in the benchmark S&P 500 index over the same period.
About the Author: Shubhshree Kar
Shubhshree’s keen interest in financial instruments led him to build a career as an investment analyst. After earning a master’s degree in economics, he acquired knowledge of equity research and portfolio management in Finlatics.
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