Traders Attention Alert: Mohawk Group Holdings, Inc. (NASDAQ: MWK)

On 06 Dec 2019, Mohawk Group Holdings, Inc. (NASDAQ: MWK) spotted trading -48.79% off 52-week high price. On the other end, the stock has been noted 7.42% away from the low price over the last 52-weeks. The stock changed 1.29% to recent value of $5.5. The stock transacted 56765 shares during most recent day however it has an average volume of 23.98K shares.

Mohawk Group Holdings, Inc. (MWK) recently reported results for the third quarter ended September 30, 2019.

3 new products released in the third quarter and 17 new product launches on track for the fourth quarter to date

Net revenue grew 64.6% to $40.6M, contrast to $24.7M in the third quarter of 2018

Gross margin increased to 43.2%, contrast to 42.2% in the third quarter of 2018 and 38.7% in the second quarter of 2019

Operating loss for the third quarter of 2019, inclusive of $7.7M in non-cash stock-based compensation, was $(10.4M) contrast to $(4.7M) in the third quarter of 2018, which included $0.1M in non-cash stock-based compensation

Contribution margin improved to $3.2M, contrast to $0.3M in the third quarter of 2018 and $1.7M in the second quarter of 2019

Net loss for the third quarter of 2019, inclusive of $7.7M in non-cash stock-based compensation, was $(11.3M) contrast to $(5.1M) in the third quarter of 2018, which included $0.1 in non-cash stock-based compensation

Adjusted EBITDA improved to $(2.7M), contrast to $(4.5M) in the third quarter of 2018 and $(3.7M) in the second quarter of 2019

Cash provided by operating activities was $3.1M, contrast to cash used in operating activities of $(4.4M) in the second quarter of 2019

Total cash balance at September 30, 2019 was $35.7M

Third Quarter 2019 Review

Third quarter 2019 net revenue increased 64.6% to $40.6M, contrast to $24.7M in the third quarter of 2018. The increase was primarily attributable to increased direct sales volume, which grew by $15.6M, or 63.9% from the third quarter of 2018, from growth of existing products as well as new products released in the second half of 2018 and in 2019.

Gross margin for the third quarter of 2019 was 43.2%, contrast to 42.2% in the year ago period and 38.7% in the second quarter of 2019.

Total operating expenses for the third quarter of 2019 increased to $27.9M from $15.1M a year ago driven primarily by a $7.6M increase in non-cash stock-based compensation expense. Total operating expenses as a percentage of net revenue was 68.8% in the third quarter of 2019 versus 61.3% the third quarter of 2018.  Not Including non-cash stock-based compensation expense, operating expenses as a percentage of net revenue reduced to 49.8% from 60.7% in the same period last year. The important improvement in operating expense leverage highlights the Company’s current ability to launch new products and grow revenue while keeping fixed costs essentially flat Because of the Company’s AIMEE automation.

Sales and distribution expenses as a percentage of net revenue was 42.6% in the third quarter of 2019 versus 46.9% the third quarter of 2018. Sales and distribution expenses not including $1.6M in non-cash stock-based compensation as a percentage of net revenue reduced to 38.6% from 46.8% in the same period last year also not including non-cash stock-based compensation. The change was primarily attributable to a higher percentage of sales fulfilled by the Company’s own third party warehouse providers instead of through e-commerce platform service providers.

 Its earnings per share (EPS) expected to touch remained -38.00% for this year. MWK has a gross margin of 40.80% and an operating margin of -29.10% while its profit margin remained -33.10% for the last 12 months. According to the most recent quarter its current ratio was 1.8 that represents company’s ability to meet its current financial obligations. The price moved ahead of -5.33% from the mean of 20 days, -14.22% from mean of 50 days SMA and performed -22.21% from mean of 200 days price. Company’s performance for the week was -8.33%, -16.54% for month and YTD performance remained -45.00%.

 

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