Is Gaia (USA Stocks:GAIA) ready for a correction?

GAIA Stock

USD 2.68 0.03 1.13%

Macroaxis Story

Whilst many millenniums are getting more into entertainment space, it makes sense to go over Gaia Inc. We will check why this entity may not get much respect from investors given the current market uncertainty. Is the firm valuation justified? I am going to cover Gaia Inc perspective on valuation to give you a better outlook on taking a position in it.

Published over two weeks ago

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Reviewed by Gabriel Shpitalnik

This firm currently holds 6.11 M in liabilities with Debt to Equity (D/E) ratio of 0.15, which may suggest Gaia is not taking enough advantage from borrowing.

We provide advice to complement the regular expert consensus on Gaia. Our dynamic recommendation engine utilizes a multidimensional algorithm to analyze the company's potential to grow using all technical and fundamental data available at the time.

Is Gaia (USA Stocks:GAIA) ready for a correction?

We determine the current worth of Gaia Inc using both absolute as well as relative valuation methodologies to arrive at its intrinsic value. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Gaia Inc based exclusively on its fundamental and basic technical indicators. By analyzing Gaia's financials, quarterly and monthly indicators, and related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Gaia's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Gaia. We calculate exposure to Gaia's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Gaia's related companies.

Gaia Inc Investment Alerts

Gaia investment alerts and warnings help investors to get more proficient at understanding not only critical technical and fundamental signals but also the significant portfolio-centered indicators. These indicators include beta, alpha, and other risk-related measures that will help you in monitoring Gaia Inc performance across your portfolios.Please check all investment alerts for Gaia

Gaia Valuation Ratios as Compared to Competition

Our valuation model uses many indicators to compare Gaia value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Gaia competition to find correlations between indicators driving the intrinsic value of Gaia.

How does Gaia utilize its cash?

To perform a cash flow analysis of Gaia, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Gaia is receiving and how much cash it distributes out in a given period. The Gaia cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.

Gaia Net Cash Flow from Operations is projected to increase significantly based on the last few years of reporting. The past year's Net Cash Flow from Operations was at 11.52 Million

Exercise or conversion by Paul Sutherland of 6435 shares of Gaia subject to Rule 16b-3

Legal trades by Gaia insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:

Gaia insider trading alert for exercise of class a common stock by Paul Sutherland, the corporate stakeholder, on 27th of February 2023. This event was filed by Gaia Inc with SEC on 2023-02-27. Statement of changes in beneficial ownership - SEC Form 4 [view details]

Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

Breaking down the case for Gaia

The company reported the previous year's revenue of 79.57 M. Net Income was 3.73 M with profit before overhead, payroll, taxes, and interest of 69.05 M.

Margins Breakdown

Gaia profit margins show the degree to which it makes money. Margin indicators are used not only by investors but also by creditors or Gaia itself as indicators of financial health and management effectiveness. Please look more closely at the different varieties of Gaia profit margins.

0.97

Gross Margin

0.25

EBITDA Margin

	Operating Margin	3.09
	EBITDA Margin	0.25
	Gross Margin	0.97
	Profit Margin	0.0434

Gaia Revenue Per Employee is decreasing over the last 8 years. The previous year's value of Gaia Revenue Per Employee was 605,899. Gaia Average Assets is somewhat stable at the moment. Additionally, Gaia Earnings Before Interest Taxes and Depreciation Amortization EBITDA is somewhat stable at the moment. Gaia Revenue Per Employee is decreasing over the last 8 years. The current value of Gaia Revenue Per Employee is 605,899. Gaia Average Assets is decreasing over the last 8 years. The previous year's value of Gaia Average Assets was 109,958,171. Additionally, Gaia Earnings Before Interest Taxes and Depreciation Amortization EBITDA is somewhat stable at the moment.

Anything left for Gaia after the slip?

Current Sortino Ratio is up to 0.09. Price may slip again. Gaia Inc is displaying above-average volatility over the selected time horizon. Investors should scrutinize Gaia Inc independently to ensure intended market timing strategies are aligned with expectations about Gaia volatility. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Gaia's stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Gaia's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Our Final Takeaway

Whereas few other entities in the entertainment industry are either recovering or due for a correction, Gaia may not be performing as strong as the other in terms of long-term growth potentials. While some investors may not share our view we believe that the current risk-reward utility is not appealing enough to do any trading. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Gaia.

Editorial Staff

Aina Ster is a Member of Macroaxis Editorial Board. Aina delivers weekly perspective on ongoing market and economic trends, analysis and tips from predictive analysis to forecasting across various financial instruments. View Profile

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Aina Ster do not own shares of Gaia Inc. Please refer to our Terms of Use for any information regarding our disclosure principles.

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