Ideanomics, Inc. (IDEX) in New York City focuses on driving the adoption of commercial electric vehicles (EVs) and associated energy consumption. It recently finalized its majority ownership stake in Energica Motor Company S.p.A., expanding its offerings in the mobility sector. The company also plans to unveil a new state-of-the-art EV Experience Center in New Jersey, which is expected to be operational by the end of 2022 and will increase its ability to manufacture and showcase its products.
However, the stock could lose its listing in Nasdaq if it fails to regain compliance with Nasdaq’s listing rules promptly.
The stock has declined 24.4% in price over the past three months and 66.3% over the past nine months to close yesterday’s trading session at $0.87. In addition, it is currently trading 75.9% below its 52-week high of $3.61, which it hit on June 10, 2021. So, IDEX’s near-term prospects look bleak.
Here is what could influence IDEX’s performance in the upcoming months:
Nasdaq Listing at Risk
On March 18, 2022, IDEX received a notice from The Nasdaq Stock Market LLC stating that because it has not yet filed its Form 10-K, the company is no longer in compliance with Nasdaq Listing Rule 5250(c)(1), which requires listed companies to file all required periodic financial reports with the Securities and Exchange Commission in a timely manner.
In terms of its trailing-12-month asset turnover ratio, IDEX’s 0.27% is 65.5% lower than the 0.78% industry average. Its 1.51% trailing-12-month CAPEX/Sales is 44.1% lower than the 2.71% industry average. Furthermore, the stock’s trailing-12-month ROCE, ROTC, and ROTA are negative, versus the 13.68%, 6.94%, and 5.16% respective industry averages.
Unfavorable Analyst Estimates
Analysts expect IDEX’s EPS to decrease 100% for the quarter ending June 30, 2022. Also, its EPS is expected to remain negative in the current quarter and year.
POWR Ratings Reflect Bleak Prospects
IDEX has an overall F rating, which equates to a Strong Sell in our POWR Ratings system. The POWR Ratings are calculated by accounting for 118 distinct factors, with each factor weighted to an optimal degree.
Our proprietary rating system also evaluates each stock based on eight distinct categories. IDEX has an F grade for Quality, which is in sync with its lower-than-industry profitability ratios.
The stock has a D grade for Sentiment. This is justified because analysts expect its EPS to decline in the near term. In addition, IDEX has an F grade for Value, which is in sync with its 3.43x forward P/S, which is 162.3% higher than the 1.31x industry average.
IDEX is currently trading below its 50-day and 200-day moving averages of $0.98 and $1.68, respectively, indicating a downtrend. Because the stock looks overvalued at its current price level, we think it is best to avoid it now.
How Does Ideanomics Inc. (IDEX) Stack Up Against its Peers?
While IDEX has an overall POWR Rating of F, one might want to consider investing in the following Software – Application stocks with an A (Strong Buy) rating: Commvault Systems, Inc. (CVLT), Rimini Street Inc. (RMNI), and Progress Software Corporation (PRGS).
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IDEX shares were trading at $0.88 per share on Wednesday afternoon, up $0.01 (+1.55%). Year-to-date, IDEX has declined -26.67%, versus a -6.46% rise in the benchmark S&P 500 index during the same period.
About the Author: Nimesh Jaiswal
Nimesh Jaiswal's fervent interest in analyzing and interpreting financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving a stock’s price is the key approach that he follows while advising investors in his articles. More...
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