Swvl Holdings Corp. (SWVL) in Dubai, United Arab Emirates, is a startup that provides shared transportation services for intercity and intracity trips. It recently completed a business combination and began trading on April 1, merging with a special purpose acquisition company (SPAC), Queen’s Gambit Growth Capital, raising $121.50 million in private investment in public equities (PIPE).

The stock has declined 24.9% in price over the past three months to close Friday’s trading session at $7.47. In addition, it is currently trading 34.5% below its all-time high of $11.40, which it hit on April 28, 2022.

Furthermore, the automotive industry is facing severe semiconductor chip shortages and supply chain crises that could hamper the company’s operational plans. So, SWVL’s near-term prospects look bleak.

Here is what could influence SWVL’s performance in the coming months:

Recent Developments

On April 28, 2022, SWVL announced a definitive agreement to acquire Zeelo to become a leading global mass transit tech platform, expanding its footprint to the USA and South Africa, and increasing its presence in the U.K.

On April 25, 2022, SWVL agreed to acquire Volt Lines, a Turkey-based B2B, and Transport as a Service mobility business to expand further in Europe.

On March 24, 2022, SWVL announced an agreement to acquire door2door to expand into Central Europe. This European high-growth mobility platform partners with municipalities, public transit operators, corporations, and automotive companies, providing software for on-demand mobility, multimodal routing, and mobility analytics.

Profitability is the Key Concern

SWVL needs to wait for a long time to become a profitable business because  it plans to expand into several countries over the coming months. 

POWR Ratings Reflect Bleak Prospects

SWVL has an overall D rating, which equates to 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. SWVL has a C grade for Growth and Sentiment. This is justified because analysts expect its EPS to remain negative in the current quarter, current year, and next year.

SWVL is ranked #101 out of 156 stocks in the Software – Application industry. The industry is rated F.

Click here to access SWVL’s Momentum, Quality, Value, and Stability ratings.

Click here to check out our Software Industry Report for 2022

Bottom Line

SWVL is currently trading below its 50-day and 200-day moving averages of $8.38 and $9.51, respectively, indicating a downtrend. Furthermore, it could keep losing in the near term due to its weak profitability. So, it is best avoided now.

How Does Swvl Holdings Corp. (SWVL) Stack Up Against its Peers?

While SWVL has an overall POWR Rating of D, one might want to consider investing in the following Software – Application stocks with an A (Strong Buy) rating: Commvault Systems, Inc. (CVLT), Progress Software Corporation (PRGS), and Rimini Street Inc. (RMNI).

SWVL shares were trading at $6.56 per share on Monday afternoon, down $0.91 (-12.18%). Year-to-date, SWVL has declined -34.40%, versus a -15.76% 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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