ClearOne Inc. (CLRO) Investment Report

TL;DR

ClearOne Inc. (CLRO) operates in the Technology sector, specifically in the Communication Equipment industry. The company has mixed financial performance. While it has low trailing PE ratio and high insider ownership, its profitability and cash flow have been inconsistent, and it has been operating at a loss in recent quarters. The company has a reasonable amount of debt, and has the liquidity to meet its short-term obligations.

Summary

ClearOne Inc. has a market capitalization of approximately 47.92 million USD. The company's trailing PE ratio is 2.35, suggesting that it is undervalued when compared to the market average. The forward PE, however, is negative at -2.86 which indicates expected losses in the future. The company's beta is 0.70, indicating less volatility than the market.

In terms of profitability, the company's profit margin stands at 1.12%. Return on assets and return on equity are -8.91% and 45.23% respectively, indicating poor asset management but substantial return on equity.

The company's total revenue for the last four quarters are as follows: Q1 2023: 4,178,000 USD, Q2 2023: 5,483,000 USD, Q3 2023: 4,889,000 USD, and Q4 2022: 4,021,000 USD.

The company's net income has been consistently negative for the recent quarters, except for Q4 2022 where it was 24,028,000 USD.

The company's debt stands at 2,349,000 USD, with a debt to equity ratio of 5.59. However, its quick ratio of 5.55 and current ratio of 7.88 suggests that the company is capable of meeting its short-term liabilities.

The company's shares are majorly held by insiders (49.65%) and only 5.15% is held by institutions.

Pros

• Low PE ratio, indicating undervaluation.
• High insider ownership indicates confidence in the company's future prospects.
• High current and quick ratio, indicating company's capability to meet short-term liabilities.

Cons

• Negative forward PE indicates expected future losses.
• Inconsistent profitability and negative operating income.
• Negative net income in recent quarters.
• High operating expenses.
• Negative cash flows indicating possible financial distress.

Recommendation

Given the company's inconsistent profitability, negative operating income in recent quarters, and negative cash flows, investing in CLRO might involve high risk. However, the low PE ratio indicates the stock could be undervalued. Therefore, I would recommend holding off on buying CLRO shares until there is a clear sign of improvement in profitability and positive cash flows. This is a long-term view, and short-term fluctuations may provide trading opportunities for speculative investors.

Please note that this recommendation is based on the current analysis and the situation can change based on new data or changes in market conditions. Always consult with a financial advisor before making any investment decisions.