Audioboom Stock Forecast: Financial and Technical Analysis

• Audioboom group financial highlights and statement analysis. 
• The company is focus more on its growth side rather than its stability and profitability.
• The BOOM stock is seen taking some support after being 90% down from its all-time high.

Audioboom Group PLC was found in 2003. It is a listed company on the London Stock Exchange that engages in the business of podcast services. The firm offers podcasts of different genres such as news, true crime, sports, current affairs, and entertainment. The company is led by its CEO, Stuart James L. It is headquarter in St. Helier, the United Kingdom.

Financial Analysis of Audioboom Stock

The income statements of Audioboom show that the company is increasing its revenue consistently at a Compound annual growth rate (CAGR) of 49.6%. It has successfully maintained its gross level of profit.

The revenue incurred in 2022 came up to £60.7 million which was a 38% growth as per its last year. The gross profit of the firm came up to £11.54 million with a gross margin of approximately 19%. With a loss of £1.7 million in operations, the company reported its net profit as -£614 thousand. The profitability ratios, such as Return on equity, return on Capital employed, price to earnings, etc. are negative due to net losses.

The company is burning its funds in operations throughout the period. It shows that the management is currently focusing on growth and not on sustainability or net profitability. The revenue shows the company’s priorities.

The balance sheet of the firm shows that the management is increasing its cash stacks year on year. They have helped the firm to maintain a good ratio of around 2.0 on average. 

The Properties and plants have decreased over the years which have accounted for asset turnover ratios over the years. However, looking at the liabilities side the company has significantly decreased its long-term debt. which has further resulted in a very low debt-to-equity ratio of 0.02.

The cash flow statement of the company does not have much to look at. The Earnings before interest and taxes are negative which result in cash flow from operating activities being negative as well. This furthermore result in a negative net cash flow as the company is seen to have continuous capital expenditure.

The figures and the KPIs are calculate by the annual reports provided by Trading View & Yahoo Finance 

Technical Analysis of Audioboom stock

The BOOM stock price started falling after making an all-time high of £2,260 in April 2022. The financials of the stock are in decent growth till the unit economics level. The main reason for this fall seems to be the lack of net profit and profitability ratios for the investors. The company’s management is focused on growth rather than sustainability.

Current Price Action

The stock has made a gap-down opening. It is in a consolidation zone between some supports and resistances, hovering below and above it. The indicators are also showing valuable insights for the short-term price action in the future.

The support levels are £180 for the first and the immediate support and £135 for the support below it. Both levels are drawn after assessing the candles of 2020.

The resistances on the other hand are made considering the gap-down opening, on the levels of £229 for the immediate rejection and on £279 as the 2nd resistance.

The MACD graph shows a bullish trend which started back at the start of July this year when the MACD line made a bullish crossover with the EMA. Although still below the neutral zone, the line is showing some potential of making it past. The levels of the MACD line and its EMA are at -6.67 and -8.64 respectively 

The RSI on the other hand is showing a slight uptrend after touching its oversold levels of 17. Between the uptrend, some rejection is seen at the neutral zone of 50 where the bears seem to be active.

The RSI line is at the level of 45 and has made a bullish crossover with its SMA which is at the level of 42. It bounced back from its same neutral level and is looking to make another crossover with its SMA 

The EMAs however are far above the Boom stock price because of the constant downfall. This way they are not able to participate in the recent price action and hence won’t be of any use for providing any insight. The levels however are £221 for the 50 EMA and £401 for the 200 EMA.

Is it Worth Keeping an Eye on Audioboom Stock?

As the financial analysis of the company depicts, it is focus on growth and utilizing its funds. This has worked well as the revenue of the firm is growing by a significant margin on a year-on-year basis. 

However, the market is currently focus more on the profitability ratios. Consequently, prices are more than 90% down. This has created an opportunity for long-term investors to come in and tie their seatbelts. 

looking out for a short-term opportunity, the stock is in a deep downtrend. However, the share price is seen resting on its immediate support of $180. Indicators like MACD and RSI are giving a short-term bullish signal. 

A risky buying level can be made if the stock bounces off its immediate support. However, the 50 EMA is seen closing down from the top which will likely resist the bulls.

Conclusion

Audioboom Group PLC is a listed company on the London Stock Exchange that engages in the business of podcast services. the company is making consistent revenue growth with losses in operations. The stock has gone down more than 90% from its all-time high. It is offering a lucrative buying opportunity to long-term investors. Short-term traders should be cautious of the 50 EMA coming down because the price may face rejections.

Technical levels

Support: £180, £135

Resistance: £229, £279

Disclaimer

The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.