Moderna Inc

Moderna Inc (Nasdaq: MRNA) is a research stage entity with a diverse clinical portfolio of vaccines and therapeutics.

Investment Rationale – EXPENSIVE at USD 391.42

• On 5 August 2021, MRNA released Q2 FY21 reports and reported
  • Both total income and net income increased due to the commercial sales of the Company's COVID-19 vaccine.
  • The cash position also increased to US$12.2 billion (as on 30 June 2021) from US$5.2 billion (as on 31 December 2020).
• The stock seems overstretched given the market uncertainties. Moreover, its vaccine could fail to be effective on new variants. The resurgence of Covid-19 cases with delta variant can also create operational difficulties and cause a shortage of labour.
• The stock has surged exceptionally high, which are not supported by its fundamentals. It can face correction with any negative regulatory action.
• From a technical standpoint, the current market price is hovering close to the upper Bollinger Band, while 14-day RSI (~58.64) is reiterating the overbought scenario.
• On a forward 12-month basis – EV/Sales, EV/EBITDA, Price/Earnings, Price/Cash Flow, and Price/Book valuation multiples, are overvalued against the Health Care industry.

One Year Share Price Chart

 (Data Source: Refinitiv, Analysis by Kalkine Group)

Conclusion

Based on overstrained price conditions, regulatory uncertainties, operational difficulties, and macroeconomic instabilities, we have given an “EXPENSIVE” recommendation on Moderna Inc at the closing market price of USD 391.42 (as of 12 August 2021), while we look forward to investing when due corrections are done, and we have clear financial guidance.  

AMC Entertainment Holdings Inc

AMC Entertainment Holdings Inc (NYSE: AMC) deals in in the theatrical exhibition business and has interests in theatres located in the United States and Europe.

Investment Highlights – EXPENSIVE at USD 33.07

• In Q2 FY21, AMC reported huge net losses due to closed theatres, and increased operating expenses.
• The new Covid-19 variant strains can delay movie studios release schedules and disrupt movie studio practices.
• From a technical standpoint, 20-day EMA (USD 35.98) is trading above the current market price, reflecting a bearish price momentum.
• The speculations regarding the Federal Reserve reducing its pandemic-era stimulus can create significant market volatility.
• On a forward 12-month basis – EV/Sales, and EV/EBITDA valuation multiples, are overvalued against the Consumer Cyclicals industry.

Share Price Chart

(Data Source: REFINITIV, Analysis done by Kalkine Group)

Conclusion

Based on the significant losses, overvalued valuation multiples, bearish price trend, and macroeconomic uncertainty, we have given an “EXPENSIVE” stance on AMC Entertainment Holdings Inc at the closing price of USD 33.07 (as on 12 August 2021), while we look forward to reviewing how the Company will deal with new viral variants.

Marathon Digital Holdings Inc

Marathon Digital Holdings Inc (Nasdaq: MARA) is a digital asset technology entity that mines cryptocurrencies with blockchain ecosystem.  

Investment Rationale – WATCH at USD 33.84

• On 3 August 2021, the Company reported 66% year-on-year in Bitcoin holdings in July 2021.
• In Q1 FY21, the Company reported a significant increase in revenue and profit.
• The Bitcoin prices have shown a sudden upside move, which can lead to significant profit booking. Therefore, short-term correction in prices cannot be ruled out.
• The inflationary market conditions, resurgence in Covid-19 cases, and speculations regarding Federal Reserve’s asset tapering can dampen the investor sentiments.
• From a technical standpoint, the current market price is hovering close to the upper Bollinger Band, while 14-day RSI (~62.24) is reiterating the overbought scenario.
• In the past six months, MARA’s stock price has given a negative return of ~12.01%, which the Nasdaq index has given a positive return, showing underperformance against the benchmark index.

Share Price Chart

(Data Source: REFINITIV, Analysis done by Kalkine Group)

Conclusion

Based on the overtrained prices, macroeconomic uncertainties, and acquisition risk, we have given a “WATCH” stance on Marathon Digital Holdings Inc at the closing price of USD 33.84 (as on 12 August 2021), while we look forward to monitoring how the Company will navigate through the macroeconomic instabilities.   

Riot Blockchain Inc

Riot Blockchain Inc (Nasdaq: RIOT) is a Bitcoin mining entity, which is expanding its operations by securing energy efficient miners.

Investment Rationale – WATCH at USD 36.83

• In July 2021, Riot Blockchain produced 444 Bitcoins, reflecting a 777% increase over July 2020 production.
• The price volatility in BTC can impact cash flows and profitability as the arguments pertinent to wasteful carbon emission and its drastic cost to the environment can keep BTC prices volatile and uncertain in the short-term.
• In Q1 FY21, revenue surged 881% year-on-year, and the Company reported a net income of US$7.5 million.
• Bitcoin is still emerging and not a functional currency, and it is a tradeable asset which is not backed by anything.
• From a technical standpoint, the current market price is hovering close to the upper Bollinger Band, while 14-day RSI (~59.60) is reiterating the overbought scenario.
• In the past six months, RIOT’s stock price has given a negative return of ~25.26%, which the Nasdaq index has given a positive return, showing underperformance against the benchmark index.

One Year Share Price Chart

 (Data Source: Refinitiv, Analysis by Kalkine Group)

Conclusion

Based on the global supply chain disruptions, bearish price momentum, inflation and regional COVID resurgences, we have given a “WATCH” recommendation on Riot Blockchain Inc at the closing market price of USD 36.83 (as of 12 August 2021), while we look forward to reviewing how the Company will navigate through the macroeconomic uncertainties.

Canaan Inc

Established in 2013, Canaan Inc (Nasdaq: CAN) is a high-performance computing solutions provider, which is involved in software services, computing equipment production, and chip research and development.

Investment Highlights – WATCH at USD 9.22

• On 13 August 2021, Canaan received a purchase order of 17,352 bitcoin mining machines from Mawson Infrastructure Group Inc.
• In Q1 FY21, Canaan reported a significant increase in revenue and net profit, due to a 122% year-on-year increase in computing power sold, especially from the larger volume of sales orders of Bitcoin mining machines.
• The Company has a small amount of profit yet and has a history of operating losses. As Bitcoin prices are currently hard to predict, the Company failed to provide any financial guidance.
• From a technical standpoint, the current market price is hovering close to the upper Bollinger Band, while 14-day RSI (~60.22) is reiterating the overbought scenario.
• In the past six months, CAN’s stock price has given a negative return of ~29.29%, which the Nasdaq index has given a positive return, showing underperformance against the benchmark index.

Share Price Chart

 (Data Source: REFINITIV, Analysis done by Kalkine Group)

Conclusion

Based on the overvalued valuation multiples, unfavourable technical stance, and macroeconomic uncertainty, we have given a “WATCH” stance on Canaan Inc at the closing price of USD 9.22 (as on 12 August 2021), while we look forward to reviewing if the Company would be able to sustain the growth and meet its FY21 guidance.

Bit Digital Inc

Bit Digital Inc (Nasdaq: BTBT) is a Bitcoin Mining Company, with operations in the US, China, and Canada. The Company commenced its operations in February 2020.

Investment Highlights – WATCH at USD 14.79

• On 26 June 2021, BTBT collaborated with Digihost to increase in hashrate by 2.4 EH (exahash) between the two Companies.
• Due to unfavourable regulatory changes, the Company had to suspend mining operations in China from 21 June 2021. The accelerated migration program led to a reduction in bitcoin. Therefore, the Company earned 562.9 bitcoins in Q2 FY21.
• In Q1 FY21, the Company reported a significant increase in revenue and turned in net profits.
• From a technical standpoint, the current market price is hovering close to the upper Bollinger Band, while 14-day RSI (~66.28) is reiterating the overbought scenario.
• In the past six months, BTBT’s stock price has given a negative return of ~39.14%, which the Nasdaq index has given a positive return, showing underperformance against the benchmark index.

Share Price Chart

 (Data Source: REFINITIV, Analysis done by Kalkine Group)

Conclusion

Based on the overvalued valuation multiples, unfavourable technical stance, and macroeconomic uncertainty, we have given a “WATCH” stance on Bit Digital Inc at the closing price of USD 14.79 (as on 12 August 2021), while we look forward to reviewing how the Company will deal with higher input costs.   

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