Will Alkaline Water (USA Stocks:WTER) turn things around in August?
 | By Vlad Skutelnik | Macroaxis Story |
Alkaline Water (USA Stocks: WTER) is a promising investment opportunity that is currently traded on the NASDAQ exchange. This domestic company, with the LEI code 549300I2ISCNYQMQQA67, operates in the Food, Beverage & Tobacco sector, specifically in the Soft Drinks concentration. Despite its recent struggles, the company is showing signs of a potential turnaround in August. Alkaline Water, with a market capitalization of 18.8M, has been underperforming with a net income from continuing operations of a loss of 39.6M and an operating income of a loss of 39M. The company's EBITDA stands at a loss of 24.5M, while its net interest income is at a loss of 917K. This has resulted in a negative profit margin of 0.43 and a return on equity of -6.81. However, there are several indicators that suggest a potential turnaround for Alkaline Water. The company's enterprise value revenue is 0.4244, and it has a book value of 0.136. The company's quarterly revenue growth is 0.212, and its revenue per share is 8.481. Furthermore, the company's revenue stands at 72.2M. The Wall Street target price for Alkaline Water is 22.5, which is significantly higher than its current day median price of 1.63. The naive expected forecast value for the company is 1.83, indicating potential for growth. The company also has one analyst strong buy recommendation, and the overall analyst consensus for the company is a strong buy. In conclusion, despite Alkaline Water's recent financial losses, the company's potential for growth and the positive outlook from analysts suggest that it could be a promising investment opportunity. Investors should keep an eye on this stock as it could be poised for a turnaround in August. The Receivables Turnover for Alkaline Water is currently relatively stable compared to the previous year. Last year, Alkaline Water reported a Receivables Turnover of 8.51. As of July 24, 2023, the Inventory Turnover is projected to increase to 11.19, while the Revenue Per Employee is expected to slightly exceed $1.1 million. As conservative investors are showing increased interest in the beverage sector, Alkaline Water could be a company to consider. We will assess whether Alkaline Water's shares are reasonably priced as we move into August. Additionally, I will highlight some of the primary fundamental factors impacting Alkaline Water's services and discuss how these could influence the company's outlook for investors this year.
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Reviewed by Michael Smolkin
Alkaline Water (USA Stocks: WTER) has been experiencing a challenging period, with a Price Percent Change of -8.82 and a Maximum Drawdown of 37.27. However, from a product viewpoint, the company operates in the Beverages-Non-Alcoholic industry, a sector that has shown resilience and growth potential. The company's Quarterly Revenue Growth of 21.2% is a positive sign, indicating a potential turnaround in August. However, investors should be cautious as the company's financial health is not robust, with an Operating Margin of -0.35 and a Net Income From Continuing Ops of a loss of 39.6M. The company's risk measures, such as the Coefficient Of Variation of 2.3K and Total Risk Alpha of -0.16, also suggest a high level of risk. Despite these challenges, the company's Accumulation Distribution of 9.4K and Sortino Ratio of 0.0418 indicate some investor interest and potential for positive returns.
Detailed assessment
The company reported last year's revenue at $60.6 million. The net loss for the year was $39.58 million, with earnings before overhead, payroll, taxes, and interest amounting to $15.22 million. The company's profit margin (PM) stands at -0.43%, suggesting that it may be struggling with its current pricing strategies or is unable to control all operational costs. This figure is significantly below average. Similarly, it has an operating margin (OM) of -0.35%, indicating that for every $100 in sales, it generated a net operating loss of $0.35.The performance of Alkaline Water in the marketplace will significantly impact your decision to invest in its stock. Revenue growth, profitability, competitive positioning, management quality, and industry trends can influence Alkaline Water's stock prices. When investing in Alkaline Water, there are several factors to consider and potential outcomes to expect. As a company performs well, its stock price may increase, allowing investors to benefit from price appreciation. However, Alkaline Pink Sheet can experience significant price fluctuations due to market conditions, economic factors, industry trends, or company-specific news. This is why investing in stocks such as Alkaline Water carries risks, including the potential for capital loss. Stock prices can decline, and investors may incur losses if they sell shares at a lower price than their initial investment.
Watch out for price decline
Please consider monitoring Alkaline Water on a daily basis if you are holding a position in it. Alkaline Water is trading at a penny-stock level, and the possibility of delisting is much higher compared to other pink sheets. However, just because the pink sheet is trading under one dollar, does not mean it will be marked for deletion. Most exchanges require public instruments, such as Alkaline Water stock to be traded above the $1 level to remain listed. If Alkaline Water pink sheet price falls below $1 for 30 consecutive trading days, the exchange can delist it. Once the company reaches this point, they will be sent an initial price violation notice directly from an exchange.
How important is Alkaline Water's Liquidity
Alkaline Water financial leverage refers to using borrowed capital as a funding source to finance Alkaline Water ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Alkaline Water 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 Alkaline Water'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 Alkaline Water'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 Alkaline Water's total debt and its cash.
What is driving Alkaline Water Investor Appetite?
The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Alkaline Water has an asset utilization ratio of 269.31 percent. This connotes that the company is making $2.69 for each dollar of assets. An increasing asset utilization means that Alkaline Water is more efficient with each dollar of assets it utilizes for everyday operations. Alkaline Water (NASDAQ: WTER), a player in the Non-Alcoholic Beverages industry, exhibits potential for a turnaround in August, presenting a promising investment opportunity. The company, with a total asset of **$22.5M**, has demonstrated a notable quarterly revenue growth of 21.2%. Despite the company's operating income standing at a loss of $39M, the Wall Street target price for the stock is an impressive **$22.5**.The stock's price to book ratio stands at 7.15X, while its price to sales ratio is 0.35X, suggesting the stock might be undervalued. The company, with 45 full-time employees, has a risk-adjusted performance of 0.0395 and a market risk-adjusted performance of 0.1723, indicating a balance of risk and return. Alkaline Water's cash and equivalents are $2.95M, with a debt of $9.62M. The company has 259.61K shares shorted with a short ratio of 3.42X, indicating a potential short squeeze scenario. With a current ratio of 0.96X, the company's liquidity position appears stable. Despite a negative operating margin of 35%, the company's revenue per share is 8.481, showing potential for profit in the long run. .
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