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Thursday, May 19, 2022

Missfresh Ltd. (MF) Stock’s Highly Volatile Nature Makes it a Risky Buy for Investors

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Missfresh Ltd. (MF) is the inventor of the Distributed Mini Warehouse model to operate an integrated retail business engaged in offering fresh produce and FMCGs. Using the company’s mobile app customers can purchase quality groceries with ease. The experts forecast that between 2020 to 2027, the food retail business will have an annual growth rate of 5.0%.

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MF: Recent Developments

Following massive COVID-19 testing in most of the Beijing, MF announced on April 26, that it had tripled its stock supplies to meet the demands of the customers with up to 200 tons of vital commodities such as meat, eggs, vegetables, and fruits. Additionally, the volume of non-perishable food items has also been expanded.

MF: Earnings

The company’s revenue was recorded to be 6.13 billion CNY with a 2.15% gain from the past year. The per-share diluted earnings data also observed an incline of 43.3% YoY. The company forecasted a $1.23 billion with diluted EPS of -$1.89 for the current fiscal year ending December 31, 2022.

Comparison with Peers

MF’s percentage stock price comparison with its market competitors showed its dwindling stock price and worst performance as compared to its competitors. The best year-to-date price performer was NGVC with a 44% gain in its shares price. Then comes GO stock with 13% performance. MF recorded the figures of -84%, which is the worst among its peers.

Insider Transactions, Analyst Ratings, and Risk Factors

MF holds 235 million outstanding shares, out of which the institutions hold 4.86% of the shares while a very minute number of shares i.e., 0.94% shares are owned by the company’s insiders. Currently, the analysts are giving a ‘Hold’ rating to the company’s stock due to multiple risk factors associated with the stock. Some of the risks include its highly volatile share price in the last three months and three years of forecasted unprofitability.

Bottom Line

The company boasts several positive points in front of the investors such as the forecasted revenue growth of 34% per year, while the earnings are expected to grow for the next three years by an average of 27% per year. These strengths of the company will be beneficial for the investors.

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