| 2021 | 2022 | 2023 | 2024 (projected) | Gross Profit | 3.6M | 5.1M | 1.7M | 1.6M | Total Revenue | 10.6M | 21.8M | 4.8M | 4.6M |
Is it time to hedge Phunware (USA Stocks:PHUN) high volatility
 | By Raphi Shpitalnik | Macroaxis Story |
Fortune favors the bold, and Phunware's recent stock performance is a testament to that adage. As the broader market experiences a dip, Phunware has surged, catching the eye of investors looking for promising opportunities. Despite its volatile nature, with a price action indicator of 1.77 and a rate of daily change at 1.21, the stock's potential upside price of 23.51 suggests significant room for growth. Analysts are optimistic, with a strong buy consensus and a target price estimated at 1.5. This optimism is bolstered by a day median price of 13.63, indicating that the stock might be undervalued compared to its valuation real value of 6.43. For those willing to embrace the swings, Phunware could offer substantial rewards amidst the current market turbulence. Over the next 90 days, Phunware is projected to offer returns 11.03 times greater than the market average. However, it's also 11.03 times more volatile than its market benchmark. For every unit of risk, Phunware provides about 0.24 of its potential returns, compared to the Dow Jones Industrial's 0.13. While some cautious investors might be overanalyzing the software sector, it's worth revisiting Phunware. Let's examine the risks involved in investing in Phunware right now.
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Reviewed by Gabriel Shpitalnik
Phunware's stock has been making waves with its recent surge, even as the broader market experiences a downturn, presenting a potentially lucrative opportunity for investors who can stomach its volatility. With a Coefficient of Variation of 447.17, the stock exhibits significant price fluctuations, yet its Sortino Ratio of 0.346 suggests that the returns are not entirely unfavorable when adjusted for downside risk, making it an intriguing choice for those seeking high-risk, high-reward scenarios.
Key Discoveries
Phunware has $6.6 million in liabilities and a Debt to Equity (D/E) ratio of 0.52, which is fairly typical for its industry peers. However, its current ratio stands at 0.88, suggesting it has negative working capital and might struggle to meet its short-term financial obligations. When evaluating Phunware's debt, it's crucial to consider its cash reserves and equity. The company has a performance score of 18 out of 100 and a Beta of 1.3, indicating higher volatility compared to the market. This means Phunware could outperform in a rising market but may underperform if the market declines. To assess potential returns, examine Phunware's downside variance and the interplay between accumulation distribution and price action indicators.Volatility is a rate at which the price of Phunware or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of Phunware may increase or decrease. In other words, similar to Phunware's beta indicator, it measures the risk of Phunware and helps estimate the fluctuations that may happen in a short period of time. So if prices of Phunware fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility. Please read more on our technical analysis page.How important is Phunware's Liquidity
Phunware financial leverage refers to using borrowed capital as a funding source to finance Phunware ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Phunware financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Phunware's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Phunware's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Phunware's total debt and its cash.
Phunware Gross Profit
Phunware Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Phunware previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Phunware Gross Profit growth over the last 10 years. Please check Phunware's gross profit and other fundamental indicators for more details.
Phunware Volatility Drivers
Phunware unsystematic risk is unique to Phunware and usually not directly affected by the market or economic environment. An example of unsystematic risk is the possibility of poor earnings or a layoff due to coronavirus. One may mitigate nonsystematic risk by buying different securities in the same industry or by buying in different sectors. For example, if you have a position in Phunware you can also buy Beamr Imaging Ltd. You can also mitigate this risk by investing in the information technology sector as well as in companies having nothing to do with it. This type of risk is also called diversifiable risk and can be understood from analyzing Phunware important indicators over time. Here we run a correlation analysis between relevant fundamental ratios over at least ten year period to find a relationship in the way they react to changes in Phunware income statement and balance sheet. Here are more details about Phunware volatility.Click cells to compare fundamentals
Detailed Outlook On Phunware
The recent price roll up of Phunware may encourage investors to take a closer look at the company as it is trading at a share price of 14.14 on 43,728,926 in trading volume. The company executives may have good odds in positioning the company resources to exploit market volatility in November. The stock standard deviation of daily returns for 90 days investing horizon is currently 8.71. The very high volatility is mostly attributed to the latest market swings and not very good earnings reports from some of the Phunware partners.
When the market dips, opportunities often arise for the discerning investor. Phunware's recent surge, despite broader market challenges, underscores its potential as a compelling investment. With a high beta of 2.57, the stock exhibits significant volatility, suggesting the possibility of substantial gains for those willing to embrace the risk. However, the company faces a daunting 96% probability of bankruptcy, which should caution investors to weigh potential rewards against the inherent risks. With a market capitalization of $160.34 million and a promising target price of $15.25, Phunware presents both an intriguing opportunity and a reminder of the importance of risk management..
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