ECMOHO Limited (MOHO) is a major integrated solution provider in China's non-medical health and wellness industry. The Shanghai, China-based company serves as a link between brand owners and Chinese customers by marketing and selling health supplements and food, mother and childcare goods, personal care products, domestic healthcare equipment, and other health and wellness items.
The stock is down 89.9% in price over the past year and 29.8% over the past month to close yesterday's trading session at $0.21. In addition, it is currently trading 91.7% below its 52-week high of $2.52, which it hit on March 16, 2021.
Last year, ECMOHO received a notice of deficiency from the Listing Qualifications Department of The Nasdaq Stock Market, indicating that it was no longer in compliance with the minimum bid price requirement outlined in Rule 5450(a)(1) of the Nasdaq Listing Rules because the company's closing bid price per American depositary share has been below $1.00.
Here is what could shape MOHO's performance in the near term:
Underwhelming Financials
MOHO's revenue decreased 60.5% year-over-year to $28.25 million for the third quarter, ended Sept. 30, 2021. Its operating loss came in at $3.62 million. The company reported a $3.75 million net loss, while its loss per share amounted to $0.09. In addition, its gross profit declined 49.4% from its year-ago value to $6.41 million. Its cash and cash equivalents came in at $39.15 million, representing a 13.5% decline for the nine months ended Sept. 30, 2021.
Poor Profitability
MOHO's 22.3% trailing-12-months gross profit margin is 38% lower than the 35.9% industry average. Also, its ROA, net income margin, and ROC are negative 11%, 8.1%, and 8.9%, respectively. Furthermore, its $21.60 million trailing-12-month cash from operations is 87.5% lower than the $172.34 million industry average.
POWR Ratings Reflect Uncertainty
MOHO has an overall D rating, which equates to Sell in our proprietary 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. MOHO has an F grade for Stability and a D for Growth. The stock’s 1.16 beta is consistent with its Stability grade. In addition, the company's poor financials and profitability are in sync with the Growth grade.
Among the 13 stocks in the B-rated Medical – Consumer Goods industry, MOHO is ranked #10.
Beyond what I have stated above, you can view MOHO ratings for Value, Sentiment, Quality, and Momentum here.
Click here to checkout our Healthcare Sector Report for 2022
Bottom Line
MOHO's stock has plummeted 46.3% in price year-to-date due to its operational inefficiencies and negative top-line growth. In addition, the stock is currently below its 50-day and 200-day moving averages of $0.32 and $0.75, respectively, indicating a bearish sentiment. Furthermore, considering its negative profit margins, we believe the stock is best avoided now.
How Does ECMOHO Limited (MOHO) Stack Up Against its Peers?
While MOHO has an overall D rating, one might want to consider its industry peers, Nature's Sunshine Products Inc. (NATR), which has an overall A (Strong Buy) rating, and Lifevantage Corporation (LFVN) and Natural Alternatives International Inc. (NAII) which have a B (BUY) rating.
MOHO shares fell $0.00 (-0.28%) in premarket trading Tuesday. Year-to-date, MOHO has declined -45.68%, versus a -11.74% 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.
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