Liquid Media Group Ltd. (YVR) in Vancouver, British Columbia, is a media and entertainment company that combines mature production companies into a vertically integrated worldwide studio that creates content for all platforms, including cinema, television, gaming, and virtual reality. The company's shares have gained 11.9% in price over the past month.
However, the stock is down 75.9% over the past year and 26.5% over the past three months to close yesterday's trading session at $0.73. In addition, it is trading 77% below its 52-week high of $3.17.
Also, last month the company received a notice of deficiency from Nasdaq over its noncompliance with the Nasdaq listing rules.
Here is what could shape YVR's performance in the near term:
Notice of Deficiency
Last month, YVR reported that it received a written notice from The Nasdaq Stock Market's listing qualifications department suggesting that the company does not comply with the Nasdaq listing rules' minimum bid price requirement of $1.00 per share. According to the notice, the company has 180 calendar days, or until Aug. 29, 2022, to regain compliance with the listing rules under. To regain compliance with the rules, the company's common shares must have a closing bid price of at least $1.00 for 10 consecutive business days. If the company does not achieve compliance by Aug. 29, 2022, it may be given more time to regain compliance.
Poor Profitability
YVR's 0.07% trailing-12-months asset turnover ratio is 83.9% lower than the 0.5% industry average Its trailing-12-months cash from operations stood at a negative $3.57 million compared to the $292.88 million industry average. Also, its trailing-12-months ROA, gross profit margin and ROC are negative 110.5%, negative 0.5%, and negative 48.3%, respectively.
POWR Ratings Reflect Uncertainty
YVR 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. YVR has an F grade for Quality. The company's poor profitability is consistent with the Quality grade.
Among the nine stocks in the F-rated Entertainment – Movies/Studios industry, YVR is ranked #8.
Beyond what I have stated above, one can view YVR ratings for Value, Stability, Momentum, Growth, and Sentiment here.
Bottom Line
While the company could potentially capitalize on favorable NFT trends eventually, we believe YVR's growth potential is currently limited due to its bleak profitability and business uncertainties. Therefore, we think the stock is best avoided now.
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YVR shares fell $0.02 (-2.45%) in premarket trading Wednesday. Year-to-date, YVR has declined -30.48%, versus a -7.43% 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.
Up 12% in the Past Month, Will Liquid Media Group Continue to Rally? StockNews.com
