1 Stock You Shouldn't Buy Even Though It's Dirt Cheap

: AVCT | American Virtual Cloud Technologies, Inc. ( News, Ratings, and Charts

AVCT – Tech stock American Virtual Cloud (AVCT) is trading near its 52-week low. Although it looks dirt cheap, this fundamentally weak stock might be best avoided amid the heightened market volatility. Keep reading….

American Virtual Cloud Technologies, Inc. (AVCT - Get Rating) is a pure-play cloud communications and collaboration company providing cloud-based enterprise services worldwide. The company’s Kandy cloud communications platform is a cloud-based, real-time communications platform.

AVCT is currently trading near its 52-week low of $0.13, which it hit on August 23, 2022. It is trading 95.6% below its 52-week high of $3.79, which it hit on September 10, 2021. Over the past month, the stock has gained marginally to close the last trading session at $0.17.

However, it has lost 95.2% over the past year and 93.1% year-to-date. AVCT is trading below its 50-day moving average of $0.23 and its 200-day moving average of $0.84.

Here is what could shape AVCT’s performance in the near term:

Fed’s Persistent Hawkish Stance

After two consecutive 75-bps rate hikes, the odds of another similar raise this month are rapidly increasing. According to the CME Group’s FedWatch tracker, the probability of a three-quarter point hike soared to 82%.

The interest rate-sensitive and tech-heavy NASDAQ Composite has lost 24.2% year to date. The Fed’s monetary tightening could cause further turmoil, and fundamentally weak stocks in the tech industry might incur substantial losses.

Weak Topline Performance

For the second quarter ended June 30, 2022, AVCT’s total revenues came in at $3.72 million, down 24.8% year-over-year, while its cloud subscription and software revenues came in at $3.62 million, down 10.8% year-over-year.

Moreover, its gross loss came in at $1.55 million, compared to a gross profit of $1.38 million in the year-ago period. Also, its loss from continuing operations came in at $24.01 million, up 105.6% year-over-year.

POWR Ratings Reflect Bleak Prospects

AVCT has an overall rating of D, equating to Sell in our proprietary POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

AVCT has a D grade for Sentiment. Analysts expect its revenue to decline 11.5% year-over-year to $103.59 million in 2022. In addition, it has a D grade for Stability, in sync with its beta of 1.32.

In the 81-stock Technology – Services industry, AVCT is ranked #73. The industry is rated C.

Click here for the additional POWR Ratings for AVCT (Growth, Value, Momentum, Quality). View all the top stocks in the Technology – Services industry here.

Bottom Line

AVCT has witnessed weak momentum amid the broader market sell-off. Moreover, its deteriorating top line is concerning. Given the stock’s grim growth estimates, I think AVCT might be best avoided now.

How Does American Virtual Cloud Technologies, Inc. (AVCT) Stack Up Against its Peers?

While AVCT has an overall POWR Rating of D, one might consider looking at its industry peers, Celestica Inc. (CLS - Get Rating), Issuer Direct Corporation (ISDR - Get Rating), and Box, Inc. (BOX - Get Rating), which have an overall A (Strong Buy) rating.

Want More Great Investing Ideas?

3 Stocks to DOUBLE This Year


AVCT shares were trading at $0.18 per share on Friday morning, up $0.01 (+5.67%). Year-to-date, AVCT has declined -92.59%, versus a -14.10% rise in the benchmark S&P 500 index during the same period.


About the Author: Riddhima Chakraborty


Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
AVCTGet RatingGet RatingGet Rating
CLSGet RatingGet RatingGet Rating
ISDRGet RatingGet RatingGet Rating
BOXGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


Stock Market Update: It’s Complicated!

The S&P 500 (SPY) may have bounced 17% from recent lows, but the outlook for stocks from here is...in a word...COMPLICATED. Read on to get Steve Reitmeister full market outlook and trading plan for this complicated market environment.

Becoming More Bullish on Stocks, But...

Stocks are on a roll with the S&P 500 (SPY) up more than 10% from the recent lows. Before you start getting too giddy, you should read this updated market outlook and trading plan Steve Reitmeister.

Stock Market Held Hostage

Uncertainty is the term most often applied to this stock market. Uncertainty over tariffs. Uncertainty of whether the S&P 500 (SPY) will fall into bear territory. Uncertainty over what happens next. Steve Reitmeister dives into the uncertainty to make sense of the market in this week’s commentary...

Stock Market Standing on the 50 Yard Line

Steve Reitmeister contemplates where the stock market stands now and what happens next in trying to stay on the right side of the market action. One path points to bear and one to new highs for the S&P 500 (SPY). Which will it be?

Bear or Bull Market?

The S&P 500 is on the brink of bear market territory...but that outcome is not a given at this time. Steve Reitmeister shares insights gleaned from his 45 years of investing to shine a light on current conditions along with his top picks...

Read More Stories

More American Virtual Cloud Technologies, Inc. ( (AVCT) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All AVCT News