Stock Analysis

The A2Z Smart Technologies (CVE:AZ) Share Price Is Up 49% And Shareholders Are Holding On

TSXV:AZ
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The simplest way to invest in stocks is to buy exchange traded funds. But you can significantly boost your returns by picking above-average stocks. For example, the A2Z Smart Technologies Corp. (CVE:AZ) share price is up 49% in the last year, clearly besting the market return of around 0.3% (not including dividends). That's a solid performance by our standards! A2Z Smart Technologies hasn't been listed for long, so it's still not clear if it is a long term winner.

Check out our latest analysis for A2Z Smart Technologies

With just US$1,085,000 worth of revenue in twelve months, we don't think the market considers A2Z Smart Technologies to have proven its business plan. So it seems that the investors focused more on what could be, than paying attention to the current revenues (or lack thereof). Investors will be hoping that A2Z Smart Technologies can make progress and gain better traction for the business, before it runs low on cash.

As a general rule, if a company doesn't have much revenue, and it loses money, then it is a high risk investment. We can see that they needed to raise more capital, and took that step recently despite the fact that it would have been dilutive to current holders. While some companies like this go on to deliver on their plan, making good money for shareholders, many end in painful losses and eventual de-listing.

A2Z Smart Technologies had cash in excess of all liabilities of when it last reported. While that's nothing to panic about, the company did raise more capital recently, bolstering the balance sheet since profits are not yet a reality. Given the share price has increased by a solid 126% in the last year , it's fair to say investors remain excited about the future with some additional cash available. The image below shows how A2Z Smart Technologies' balance sheet has changed over time; if you want to see the precise values, simply click on the image.

debt-equity-history-analysis
TSXV:AZ Debt to Equity History January 31st 2021

It can be extremely risky to invest in a company that doesn't even have revenue. There's no way to know its value easily. One thing you can do is check if company insiders are buying shares. It's usually a positive if they have, as it may indicate they see value in the stock. Luckily we are in a position to provide you with this free chart of insider buying (and selling).

A Different Perspective

A2Z Smart Technologies shareholders should be happy with the total gain of 49% over the last twelve months. And the share price momentum remains respectable, with a gain of 83% in the last three months. This suggests the company is continuing to win over new investors. It's always interesting to track share price performance over the longer term. But to understand A2Z Smart Technologies better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 5 warning signs with A2Z Smart Technologies (at least 1 which shouldn't be ignored) , and understanding them should be part of your investment process.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CA exchanges.

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Valuation is complex, but we're helping make it simple.

Find out whether A2Z Smart Technologies is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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