Nova LifeStyle Inc

Nova LifeStyle, Inc. (NASDAQ: NVFY) is a designer and distributor of modern lifestyle furniture, primarily sofas, dining room furniture, cabinets, office furniture and related components, bedroom furniture and various accessories, in matching collections. The Company’s product lines include the Nova Brands and Diamond Sofa.

Recent Business and Financial Updates

• Net Sales: For the three months ended March 31, 2024, net sales were USD 2.38 million, reflecting a 27% increase from USD 1.87 million for the same period in 2023. This increase was primarily driven by a 30% rise in sales volume, partially offset by a 3% decrease in the average selling price. The three largest selling product categories for this period were sofas, beds, and chairs, which accounted for approximately 53%, 12%, and 8% of sales, respectively.
• Gross Profit: Gross profit for the three months ended March 31, 2024, was USD 1.02 million, compared to USD 0.66 million for the same period in 2023, representing an increase of USD 0.35 million. The gross profit margin improved to 43% for this period, up from 35% in 2023. This increase was mainly due to higher sales of products with increased margins.
• Net Loss: The net loss for the three months ended March 31, 2024, was USD 1.46 million, compared to USD 1.22 million for the same period in 2023. This increase in net loss was mainly attributed to higher cost of sales and operating expenses.

Technical Observation (on the daily chart):

The Relative Strength Index (RSI) over a 14-day period is at 45.82, indicating a recovery from the oversold zone and suggesting potential consolidation. Currently, the stock is positioned below both the 50-period Simple Moving Average (SMA) and the 200-period Exponential Moving Average (EMA), which could act as dynamic resistance levels in the medium to long term. The stock is trading close to its 52-week low of USD 1.45, with the possibility of a significant correction if this support level is breached. Conversely, a strong upward momentum could be observed if the stock breaks through the critical resistance level of USD 2.00.

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is July 09, 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level that the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the New York Stock Exchange (NYSE), NASDAQ Capital Markets (NASDAQ), and or REFINITIV. Typically, all sources (NYSE, NASDAQ, or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.