The technical chart pattern of Xiaomi Corporation stock suggests the beginning of a trend reversal over the medium term.
Summary
● The company has strong fundamentals. More than 70% of companies have a lower mix of growth, profitability, debt and visibility.
● Overall, and from a short-term perspective, the company presents an interesting fundamental situation.
Strengths
● Growth is a substantial asset for the company, as anticipated by dedicated analysts. Within the next three years, growth is estimated to reach 94% by 2023.
● The company is in a robust financial situation considering its net cash and margin position.
● For the past year, analysts covering the stock have been revising their EPS expectations upwards in a significant manner.
● For the last 4 months, the company has been enjoying highly positive EPS revisions, which were frequently and significantly raised.
● Analysts covering this company mostly recommend stock overweighting or purchase.
● The difference between current prices and the average target price is rather important and implies a significant appreciation potential for the stock.
● Historically, the company has been releasing figures that are above expectations.
Weaknesses
● The company's profitability before interest, taxes, depreciation and amortization characterizes fragile margins.
● The company is not the most generous with respect to shareholders' compensation.
● Sales estimates for the next fiscal years vary from one analyst to another. This clearly highlights a lack of visibility into the company's future activity.
● The price targets of various analysts who make up the consensus differ significantly. This reflects different assessments and/or a difficulty in valuing the company.
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Xiaomi Corporation is specialized in the design, production and marketing of smartphones and connected products. Revenue by type of activity breaks down as follows:
- sales of smartphones and laptops (61.9%): 146.4 million units sold in 2020;
- sales of connected objects, electronic products and smart devices (27.4%): smart televisions, video projectors, smart routers, connected lighting systems, smart electric scooters, games monitors, headsets, multimedia boxes, multimedia feed readers, connected bracelets and watches, air purifiers, vacuum cleaners, etc.;
- provision of Internet services (9.7%): including advertising services, publishing of content, etc.;
- other (1%).
China accounts for 50.2% of net sales.