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Friday, May 20, 2022

Takung Art Co., Ltd. (TKAT) Stock is a Risky Option to Buy.

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Takung Art Co., Ltd. (TKAT) is a Chinese interactive media and services company enabling the increasing middle class to invest in fine art and collectibles via its three exclusive digital platforms. The Communication Services providers have huge growth potential as the revenue of this specific market is expected to reach $328 billion in 2022. The annual growth rate of this sector’s revenue for the 2022-2027 period is estimated to grow by 1.39% consequentially a rise of $351.90 billion is observed in its market volume by 2027. TKAT is ranked among the bottom 32% of the industry specifically at 173rd position out of 254 companies.

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TKAT: Recent Announcement

TKAT announced the selection of Kuangtao Wang on January 07, as the company’s Co-CEO to assist its policies in NFT-related enterprises. Mr. Wang has already served as the General Manager for Yongbao Culture and Media Co. Ltd., having a profound understanding and experience in this specific business.

TKAT: Earnings

TKAT revenue for the trailing twelve months ended September 9, 2021, was reported to be $5.55 million with a gain of 21% from the full fiscal year 2020. Its earnings per share for the above-mentioned time recorded a steep drop of 1384% (-$0.81) as compared to the fiscal year 2020. The company has not yet reported its financial outlook for the fiscal year 2022.

Source: Cartmill

Comparison with Peers

Taking into consideration the one month and one-year performance of the company as compared to its peers (SLGG, GSMG, LOV, TZOO, and IZEA) it becomes clear that the full month’s performance of TKAT is much better than its competitors, while the full year’s performance is worst. When recording the three-year performance, it is evident that the company outperformed during that span.

Source: Seeking Alpha

Insider Transaction and Risk Factors

The major shareholders of TKAT’s outstanding shares are the employees of the company with approximately 21.8% shares possessed by them, while 4.45% of the shares are kept by the institutional stakeholders. A total of 24.2 million shares are outstanding. Certain risk factors are involved in acquiring the company’s shares. The most important ones include less than one year of cash runway, high volatility in the last three months, and dilution of the stockholders in the past year.

Bottom Line

The earnings of TKAT declined by over 45% in the last five-year period and are not going to make a comeback soon, so the investors should keep their eyes on the volatility and other factors before buying this specific penny stock.

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