Our prognosis on Energy Focus (NASDAQ:EFOI) to bounce back in June

EFOI
 Stock
  

USD 0.56  0.02  3.70%   

While many traders are getting carried away by overanalyzing consumer cyclical space, it is reasonable to concentrate on Energy Focus. We will analyze why it could be a much better year for Energy Focus shareholders. Is Energy Focus valuation justified? I am going to cover the firm perspective on valuation to give you a better outlook on taking a position in it.
Published over three months ago
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Energy Focus currently holds 4.77 M in liabilities with Debt to Equity (D/E) ratio of 1.06, which is about average as compared to similar companies.
We provide trade advice to complement the prevailing expert consensus on Energy Focus. Our dynamic recommendation engine uses a multidimensional algorithm to analyze the company's potential to grow using all technical and fundamental data available at the time.
We determine the current worth of Energy Focus using both absolute as well as relative valuation methodologies to arrive at its intrinsic value. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Energy Focus based exclusively on its fundamental and basic technical indicators. By analyzing Energy Focus's financials, quarterly and monthly indicators, and related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Energy Focus's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Energy Focus. We calculate exposure to Energy Focus's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Energy Focus's related companies.

Watch out for price decline

Please consider monitoring Energy Focus on a daily basis if you are holding a position in it. Energy Focus 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 Energy Focus stock to be traded above the $1 level to remain listed. If Energy Focus 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.

Energy Focus Investment Alerts

Energy investment alerts and warnings help investors to get more proficient at understanding not only critical technical and fundamental signals but also the significant portfolio-centered indicators. These indicators include beta, alpha, and other risk-related measures that will help you in monitoring Energy Focus performance across your portfolios.Please check all investment alerts for Energy

Energy Focus Valuation Ratios as Compared to Competition

Our valuation model uses many indicators to compare Energy value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Energy Focus competition to find correlations between indicators driving the intrinsic value of Energy.

How does Energy utilize its cash?

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

Acquisition by Den Daas Kaj of 10000 shares of Energy Focus subject to Rule 16b-3

Legal trades by Energy Focus insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:
Energy insider trading alert for grant of restricted stock units by Den Daas Kaj, the corporate stakeholder, on 28th of September 2022. This event was filed by Energy Focus Inc with SEC on 2022-09-28. Statement of changes in beneficial ownership - SEC Form 4 [view details]   
Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

A Deeper look at Energy

The entity reported the previous year's revenue of 11.21 M. Net Loss for the year was (5.19 M) with profit before overhead, payroll, taxes, and interest of 5.18 M.

Margins Breakdown

Energy profit margins show the degree to which it makes money. Margin indicators are used not only by investors but also by creditors or Energy Focus itself as indicators of financial health and management effectiveness. Please look more closely at the different varieties of Energy Focus profit margins.
EBITDA Margin(0.72)
Gross Margin0.19
Profit Margin(0.82)


Energy Focus Earnings before Tax is nearly stable at the moment. Energy Focus Earnings Before Interest Taxes and Depreciation Amortization USD is nearly stable at the moment. Additionally, Energy Focus Earnings Before Interest Taxes and Depreciation Amortization EBITDA is decreasing over the last 8 years. Energy Focus Earnings before Tax is decreasing over the last 8 years. The current value of Energy Focus Earnings before Tax is -8,509,658. Energy Focus Earnings Before Interest Taxes and Depreciation Amortization USD is decreasing over the last 8 years. Additionally, Energy Focus Earnings Before Interest Taxes and Depreciation Amortization EBITDA is nearly stable at the moment.

Energy Focus current price drop can leaving stockholders with little time to react

The kurtosis is down to 21.13 as of today. Energy Focus is displaying above-average volatility over the selected time horizon. Investors should scrutinize Energy Focus independently to ensure intended market timing strategies are aligned with expectations about Energy Focus volatility. Energy Focus is a potential penny stock. Although Energy Focus may be in fact a good instrument to invest, many penny stocks are speculative in nature and are subject to artificial price hype. Please make sure you totally understand the upside potential and downside risk of investing in Energy Focus. We encourage investors to look for the signals such us email spams, message board hypes, claims of breakthroughs, volume upswings, sudden news releases, promotions that are not reported, or demotions released before SEC filings. Please also check biographies and work history of current and past company officers before investing in high volatility instruments, penny stocks, or equities with microcap classification. You can indeed make money on Energy instrument if you perfectly time your entry and exit. However, remember that penny stocks that have been the subject of an artificial hype usually unable to maintain its increased share price for more than just a few days. The price of a promoted high volatility instrument will almost always revert back. The only way to increase shareholder value is through legitimate performance backed up by solid fundamentals.

Our Conclusion on Energy Focus

While some other firms in the furnishings, fixtures & appliances industry are either recovering or due for a correction, Energy may not be as strong as the others in terms of longer-term growth potentials. The inconsistency in the assessment between current Energy valuation and our trade advice on Energy Focus is due to the recent market swings and your selection of investing horizon. 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 Energy Focus.

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 Energy Focus. Please refer to our Terms of Use for any information regarding our disclosure principles.

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