Headquartered in Israel, My Size Inc. (MYSZ) has created a unique measuring technology based on advanced algorithms and cutting-edge technology that has a broad array of applications in fashion, e-commerce, DIY, shipping, and package delivery industries. But MYSZ’s stock has declined 15.6% in price year-to-date and 12.5% over the past month to close its last trading session at $1.19.

Although the emergence of digital technology has generated opportunities for many of its peers, MYSZ has failed to benefit from the tailwinds.

The company has yet to generate revenue or profits from its innovative measuring technology. Furthermore, the company’s inability to generate sufficient cash flows to fund its business operations could cause its share price to retreat in the near term.

Click here to check out our Software Industry Report for 2021

Here’s what could influence MYSZ’s performance in the upcoming months:

Additional Financing

This month, in a registered direct offering priced at the market, MYSZ agreed to issue 2,514,800 shares of its common stock at $1.352 per share. It also agreed to issue 3,772,208 unregistered shares of its common stock to investors in a concurrent private placement at the same purchase price as the registered direct offering. The company intends to use the net proceeds from the offerings for general corporate purposes, including working capital. However, using equity financing through a private placement to raise business capital could dilute existing shareholders’ share value and should be viewed as an alarming signal.

Inadequate Financials

For the second quarter, ended June 30, 2021, MYSZ’s operating expenses increased 784.4% year-over-year to $3.01 million. The company’s operating loss grew 223.6% from its year-ago value to $4.31 million, while its net loss surged 232.8% from the prior-year quarter to $4.34 million. The company’s loss per share has increased 32% year-over-year to $0.33 over this period.

Weak Profitability

Its trailing-12-month ROC and ROA are negative 103.4% and 144.6%, respectively. Its 0.02% asset turnover ratio is 96.4% lower than the 0.7% industry average Furthermore, MYSZ’s trailing-12-month cash from operations stood at negative $5.72 million compared to the $111.59 million industry average.

POWR Ratings reflect Bleak Prospects

MYSZ has an overall F rating, which equates to Strong Sell in our proprietary POWR Ratings system. The POWR Ratings are calculated considering 118 distinct factors, with each factor weighted to an optimal degree.

Our proprietary rating system also evaluates each stock based on eight distinct categories. MYSZ has an F grade for Stability and a D for Quality. The stock’s 2.60 beta is in sync with the Stability grade. In addition, the company’s poor profitability justifies the Quality grade.

The stock also has a C grade for Momentum. It is currently trading below its 50-day and 200-day moving average of $1.27 and $1.30, respectively, which is consistent with its Momentum grade.

Of the 143 stocks in the D-rated Software Application industry, MYSZ is ranked #130.

Beyond what I’ve stated above, we have rated MYSZ for Sentiment, Growth, and Value. Get all MYSZ ratings here.

Bottom Line

Even though MYSZ’s innovative sensor-based measurement technology offers consumers immediacy and personalization in digital shopping and shipping channels, the company’s poor fundamentals could threaten its growth. In addition, the stock is currently trading below its 50-day and 200-day moving averages, indicating a downtrend. Thus, we think the stock is best avoided now.

How Does My Size Inc. (MYSZ) Stack Up Against its Peers?

While MYSZ has an overall POWR Rating of F, one might want to consider looking at its industry peers, Open Text Corporation (OTEX), National Instruments Corporation (NATI), and eGain Corporation (EGAN), having an overall A (Strong Buy) rating.

Click here to check out our Software Industry Report for 2021

MYSZ shares fell $1.19 (-100.00%) in premarket trading Monday. Year-to-date, MYSZ has declined -12.77%, versus a 24.48% rise in the benchmark S&P 500 index during the same period.

About the Author: Pragya Pandey

Pragya is an equity research analyst and financial journalist with a passion for investing. In college she majored in finance and is currently pursuing the CFA program and is a Level II candidate. More...

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