Moxian Inc (NASDAQ:MOXC): Is Tech Attractive Relative To NasdaqCM Peers?
Moxian Inc (NASDAQ:MOXC), is a USD$254.55M small-cap, which operates in the software industry based in China. While mobile and cloud computing become ubiquitous, there is a new wave of advancement emerging from innovations such as machine learning, robotics and augmented reality. Tech analysts are forecasting for the entire software tech industry, a fairly unexciting growth rate of 4.54% in the upcoming year . Below, I will examine the sector growth prospects, as well as evaluate whether Moxian is lagging or leading in the industry. Check out our latest analysis for Moxian
What’s the catalyst for Moxian’s sector growth?
US-based mega-competitors have been, and continue to be, the key drivers of industry growth. Many tech companies are repositioning themselves by focusing on high-growth areas such as IBM’s artificial intelligence play in Watson and Adobe’s shift to marketing its product for cloud computing. Over the past year, the industry saw growth of 7.42%, though still underperforming the wider US stock market. Moxian lags the pack with its sustained negative earnings over the past couple of years. The company’s outlook seems uncertain, with a lack of analyst coverage, which doesn’t boost our confidence in the stock. This lack of growth and transparency means Moxian may be trading cheaper than its peers.
Is Moxian and the sector relatively cheap?
The software tech industry is trading at a PE ratio of 24x, in-line with the US stock market PE of 20x. This illustrates a fairly valued sector relative to the rest of the market, indicating low mispricing opportunities. Furthermore, the industry returned a similar 12.14% on equities compared to the market’s 10.46%. Since Moxian’s earnings doesn’t seem to reflect its true value, its PE ratio isn’t very useful. A loose alternative to gauge Moxian’s value is to assume the stock should be relatively in-line with its industry.
What this means for you:
Are you a shareholder? Moxian has been a tech industry laggard in the past year. If your initial investment thesis is around the growth prospects of Moxian, there are other tech companies that have delivered higher growth, and perhaps trading at a discount to the industry average. Consider how Moxian fits into your wider portfolio and the opportunity cost of holding onto the stock.
Are you a potential investor? If Moxian has been on your watchlist for a while, now may be a good time to dig deeper into the stock. Although its growth has delivered lower growth relative to its tech peers in the near term, the market may be pessimistic on the stock, leading to a potential undervaluation. Before you make a decision on the stock, I suggest you look at Moxian’s future cash flows in order to assess whether the stock is trading at a reasonable price.
For a deeper dive into Moxian’s stock, take a look at the company’s latest free analysis report to find out more on its financial health and other fundamentals. Interested in other tech stocks instead? Use our free playform to see my list of over 1000 other tech companies trading on the market.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
