Should You Add Shares of Phunware to Your Portfolio?

: PHUN | Phunware Inc. News, Ratings, and Charts

PHUN – Software company Phunware’s (PHUN) shares sky-rocketed in price on October 22, due mainly to speculation surrounding its involvement in former President Donald Trump’s social media platform development. However, the stock’s price has since fallen on the company’s weak financials. So, let’s discuss if it is wise to add the stock to one’s portfolio now.

Phunware, Inc. (PHUN) in Austin, Tex., is a pioneer of Multiscreen-as-a-Service (MaaS), a fully integrated enterprise cloud platform for mobile, and has made several partnerships and acquisitions. The stock has gained 330.7% in price over the past month to close yesterday’s trading session at $4.35. The shares had soared more than 1,000% on October 22 to hit their 52-week high of $24.04, due mainly to speculation that PHUN would play a significant role in former U.S. President Donald Trump’s latest attempt to launch a social media platform.

However, no reports have yet been published to confirm that PHUN would help develop Trump’s platform. In addition, according to an SEC filing by the company on October 26, it has registered a common stock shelf offering for roughly $48.50 million worth of its shares. This led to a decline in investor sentiment.

The stock is currently trading 81.9% below its 52-week high. The company also remained unprofitable in its latest reported quarter. So, PHUN’s near-term prospects look bleak.

Click here to check out our Cloud Computing Industry Report for 2021

Here are the factors that could shape PHUN’s performance in the upcoming months:

Partnerships and Acquisitions May Not Be Enough to Drive Growth

PHUN partnered with Cooper Lighting Solutions on October 12 to integrate its MaaS with Trellix. In August 2021, the company partnered with HID Global to integrate and offer its Smart Workplace Solution, and collaborated with Cox Communications, Inc. to bring its Digital Front Door solutions to Cox Business healthcare customers.

Furthermore, on October 19, PHUN acquired Lyte Technology, Inc., a fast-growing provider of high-performance computer systems, for $3.32 million. This is expected to take a toll on its already weak financials, however. Moreover, these developments had minimum or no effect on its share price, representing investors’ pessimism.

Weak Financials

For the second quarter ended June 30, 2021, PHUN’s net revenues decreased 35.1% year-over-year to $1.44 million. The company’s gross profit decreased 78.4% from the same period last year to $312,000. Its operating loss increased 41.2% year-over-year to $4.19 million, while its net loss came in at $8.29 million, up 136.2% year-over-year. Also, its loss per share was t $0.12, representing a 50% year-over-year rise.

Unfavorable Analyst Estimates

Analysts expect PHUN’s revenue to decrease 18.1% year-over-year for the quarter ended September 30, 2021, and 17.6% in its fiscal year 2021. Its EPS is expected to remain negative this year and next year. Also, Wall Street analysts expect the stock to hit $1.88 in the near term, which indicates a potential 56.8% decline.

POWR Ratings Reflect Bleak Prospects

PHUN has an overall F rating, which equates to a Strong Sell in our POWR Ratings system. The POWR Ratings are calculated by 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. Among these categories, PHUN has an F grade for Stability, which is consistent with its 15.32 beta.

The stock has an F grade for Value, which is in sync with its 81x and 66.05x respective forward EV/S and P/S, which are higher than the 4.17x and 4.13x industry averages.

PHUN has an F grade for Quality, consistent with its negative trailing-12-month ROCE, ROTC, and ROTA, versus the 8.29%, 4.86%, and 3.51% industry averages.

PHUN is ranked last among 59 stocks in the Software – Business industry. Also, click here to access PHUN’s ratings for Growth, Momentum, and Sentiment as well.

Bottom Line

PHUN’s shares have plunged since hitting their 52-week high in the absence of fundamental strength. Furthermore, analysts expect its revenue to decline in the near term and the company to remain unprofitable. So, we think the stock is best avoided now.

How Does Phunware (PHUN) Stack Up Against its Peers?

While PHUN has an overall POWR Rating of F, one  might want to consider investing in Software – Business stocks holding an A (Strong Buy) rating, such as SS&C Technologies Holdings, Inc. (SSNC) and CSG Systems International, Inc. (CSGS).

Click here to check out our Software Industry Report for 2021


PHUN shares rose $0.33 (+7.59%) in premarket trading Wednesday. Year-to-date, PHUN has gained 245.24%, versus a 23.15% rise in the benchmark S&P 500 index during the same period.


About the Author: Manisha Chatterjee


Since she was young, Manisha has had a strong interest in the stock market. She majored in Economics in college and has a passion for writing, which has led to her career as a research analyst. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
PHUNGet RatingGet RatingGet Rating
SSNCGet RatingGet RatingGet Rating
CSGSGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


Updated 2024 Stock Market Outlook

The bull market continues to rage on with the S&P 500 (SPY) making new highs. That is the past...the question is what does the future hold? That is why 44 year investment veteran Steve Reitmeister provides this updated 2024 Stock Market Outlook to help you carve a path to outperformance the rest of the year. Read on below for the full story...

Top 4 Tech Giants Poised for Explosive Growth

Fueled by the ever-growing demand for advanced technological solutions across various sectors and ongoing innovation, the tech industry has robust growth prospects. Thus, it could be wise to invest in top tech stocks Dropbox (DBX), TTM Technologies (TTMI), Lantronix (LTRX) and AstroNova (ALOT) for potential growth. Continue reading…

3 Top Rated Software Stocks to Streamline Your Investments

The software industry is thriving with soaring demand, presenting ample investment opportunities. So, fundamentally solid software stocks ServiceNow (NOW), Autodesk (ADSK), and Docebo (DCBO) might be ideal buys for promising returns. Read on...

Biotech Investors: Should You Buy, Hold, or Sell Moderna (MRNA) and Arrowhead Pharmaceuticals (ARWR)?

Despite facing several challenges, the biotech sector thrives due to growing demand for effective treatments, consistent innovations, and a sustained demand for high-quality drugs and therapies. Let's assess whether one should Buy, Hold, or Sell biotech stocks Moderna (MRNA) and Arrowhead Pharmaceuticals (ARWR). Keep reading...

Investor Alert: “Buy the Rumor, Sell the News!”

Everyone knows that the Fed is going to cut rates at some point this year. That is the worst kept secret on the planet helping to explain how we keep making new highs for the for the S&P 500 (SPY). Unfortunately that creates an interesting predicament for stocks after rates are cut. Plus another hurdle in the 2024 Presidential election. Steve Reitmeister is here to share his insights on the market outlook along with a preview of his top 12 stocks to outperform. Read on for more...

Read More Stories

More Phunware Inc. (PHUN) News View All

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