Is Davidstea (NASDAQ:DTEA) moving to revert?

DTEA
 Stock
  

USD 0.73  0.05  7.35%   

With so much uncertainty about the consumer defensive space, it is fair to go over Davidstea against current market trends. As we have suggested previously, Davidstea is beginning its slip as investors shift to be more bearish due to the increased sector volatility. The returns on the market and returns on Davidstea appear slightly correlated for the last few months. Weak technical and fundamental indicators of the company may also suggest signs of long term losses for Davidstea investors. Davidstea is scheduled to announce its earnings tomorrow.
Published over three months ago
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The company's average rating is Hold from 1 analysts. Do analysts base this consensus on technical analyses? We know that typical technical analysis utilizes price momentum, patterns, and trends looking at historical prices. It aims to identify signals based on Davidstea market sentiment investors' perception of the future value of Davidstea. Let us look at a few aspects of Davidstea technical analysis.
Using predictive technical analysis, we will analyze different prices and returns patterns and diagnose historical swings to determine the real value of Davidstea. In general, we focus on analyzing Davidstea stock price patterns and their correlations with different microeconomic environment and drivers. We also apply predictive analytics to build Davidstea's daily price indicators and compare them against related drivers such as momentum indicators and various other types of predictive indicators. Using this methodology combined with a more conventional technical analysis and fundamental analysis, we attempt to find the most accurate representation of Davidstea's intrinsic value. In addition to deriving basic predictive indicators for Davidstea, we also check how macroeconomic factors affect Davidstea price patterns. Please read more on our technical analysis page or use our predictive modules below to complement your research.
Sophisticated investors, who have witnessed many market ups and downs, frequently view the market will even out over time. This tendency of Davidstea's price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy. Please use the tools below to analyze the current value of Davidstea in the context of predictive analytics.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Davidstea. Your research has to be compared to or analyzed against Davidstea's peers to derive any actionable benefits. When done correctly, Davidstea's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy towards taking a position in Davidstea.

Watch out for price decline

Please consider monitoring Davidstea on a daily basis if you are holding a position in it. Davidstea is trading at a penny-stock level, and the possibility of delisting is much higher compared to other stocks. However, just because the stock is trading under one dollar, does not mean it will be marked for deletion. Most exchanges require public instruments, such as Davidstea stock to be traded above the $1 level to remain listed. If Davidstea stock 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 Davidstea's Liquidity

Davidstea financial leverage refers to using borrowed capital as a funding source to finance Davidstea ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Davidstea 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. Please check the breakdown between Davidstea's total debt and its cash.

How does Davidstea utilize its cash?

To perform a cash flow analysis of Davidstea, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Davidstea is receiving and how much cash it distributes out in a given period. The Davidstea cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.

What is driving Davidstea Investor Appetite?

Davidstea has a beta of 0.817. Let's try to break down what Davidstea's beta means in this case. As the market goes up, the company is expected to outperform it. However, if the market returns are negative, Davidstea will likely underperform. The beta indicator helps investors understand whether Davidstea moves in the same direction as the rest of the market, and how volatile (i.e., risky) it is compared to the market (i.e., selected benchmark). In other words, if Davidstea deviates very little from the market, it does not add much risk to the portfolio, but it also doesn't increase the expected returns. The entity reported the previous year's revenue of 104.07 M. Net Income was 78.13 M with profit before overhead, payroll, taxes, and interest of 43.2 M.

Chances of Davidstea investors to go out of control

Current jensen alpha indicator falls down to -0.5. Possible price jump?
As of the 12th of June 2022, Davidstea shows the coefficient of variation of (630.53), and Mean Deviation of 2.44. Davidstea technical analysis allows you to utilize historical prices and volume patterns in order to determine a pattern that computes the direction of the firm's future prices. Put another way, you can use this information to find out if the firm will indeed mirror its model of historical prices and volume momentum, or the prices will eventually revert. We were able to analyze and collect data for nineteen technical drivers for Davidstea, which can be compared to its rivals. Please confirm Davidstea treynor ratio, downside variance, kurtosis, as well as the relationship between the value at risk and expected short fall to decide if Davidstea is priced favorably, providing market reflects its regular price of 1.94 per share. Please also check Davidstea total risk alpha, which is currently at (0.33) to verify the company can sustain itself at a future point.

Our Final Take On Davidstea

Whereas some other entities in the packaged foods industry are either recovering or due for a correction, Davidstea may not be as strong as the others in terms of longer-term growth potentials. While some investors may not share our view, we believe that right now is not a good time to increase your holdings in Davidstea. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Davidstea.

Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Ellen Johnson do not own shares of Davidstea. Please refer to our Terms of Use for any information regarding our disclosure principles.

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