GSE Systems Story

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GVP -- USA Stock  

USD 1.13  0.01  0.88%

GSE Systems is scheduled to announce its earnings today. GSE Systems Book Value per Share is very stable at the moment as compared to the past year. GSE Systems reported last year Book Value per Share of 1.00. As of 16th of November 2020, Current Ratio is likely to grow to 1.32, while Earnings before Tax are likely to drop (6.5 M). As many passive investors are finally getting excited about technology space, GSE Systems could be a good starting point.
Published over two weeks ago
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What is December outlook for GSE Systems (NASDAQ:GVP)?
The company has 26.84 M in debt with debt to equity (D/E) ratio of 2.23, meaning that GSE Systems heavily relies on borrowing funds for operations. GSE Systems has a current ratio of 1.1, demonstrating that it is not liquid enough and may have problems paying out its financial commitments when the payables are due. The company has Net Profit Margin of (23.04) %, which means that it does not effectively control expenditures or properly executes on its pricing strategies. This is way below average. In the same way, it shows Net Operating Margin of (3.0) %, which entails that for every $100 of revenue, it lost -0.03.
GSE Systems financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of GSE Systems, including all of GSE Systems's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of GSE Systems assets, the company is considered highly leveraged. Understanding the composition and structure of overall GSE Systems debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it. Please read more on our technical analysis page.

Watch out for price decline

Please consider monitoring GSE Systems on a daily basis if you are holding a position in it. GSE Systems is trading at a penny-stock level, and the possibility of delisting is much higher compared to other equities. However, just because the stock is trading under one dollar, does not mean it will be marked for deletion. Most exchanges require public instruments, such as GSE Systems stock to be traded above the $1 level to remain listed. If GSE Systems stock price falls below $1 for 30 consecutive trading days, the exchange can delist it. Once the company reaches this point, they will be sent an initial price violation notice directly from an exchange.

Understanding GSE Systems Total Liabilities

GSE Systems liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. GSE Systems has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on GSE Systems balance sheet include debt obligations and money owed to different GSE Systems vendors, workers, and loan providers. Below is the chart of GSE Systems short long-term liabilities accounts currently reported on its balance sheet.
You can use GSE Systems financial leverage analysis tool to get a better grip on understanding its financial position

How important is GSE Systems's Liquidity

GSE Systems financial leverage refers to using borrowed capital as a funding source to finance GSE Systems ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. GSE Systems financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between GSE Systems's total debt and its cash.

Another Deeper Perspective

The recent bullish price patterns experienced by current GSE Systems shareholders may raise some interest from insiders. The stock closed today at a share price of 1.04 on very low momentum in trading volume. The company management teams have been very successful in rebalancing the firm assets at opportune times to take advantage of market volatility in October. The stock standard deviation of daily returns for 30 days investing horizon is currently 2.31. The current volatility is consistent with the ongoing market swings in October 2020 as well as with GSE Systems unsystematic, company-specific events.

Liabilities Breakdown

30.7 M
Current Liabilities
Long-Term Liabilities
Total Liabilities33.97 Million
Current Liabilities30.68 Million
Long-Term Liabilities3.29 Million
Tax Liabilities1.41 Million

Another setback for GSE Systems insiders

Semi variance is down to 3.65. It may hint at a possible volatility decline. GSE Systems currently demonstrates below-verage downside deviation. It has Information Ratio of 0.04 and Jensen Alpha of 0.19. However, we do advice investors to further question GSE Systems expected returns to ensure all indicators are consistent with the current outlook about its relatively low value at risk. GSE Systems is a potential penny stock. Although GSE Systems may be in fact a good instrument to invest, many penny stocks are speculative in nature and are subject to artificial price hype. Please make sure you totally understand the upside potential and downside risk of investing in GSE Systems. We encourage investors to look for the signals such us email spams, message board hypes, claims of breakthroughs, volume upswings, sudden news releases, promotions that are not reported, or demotions released before SEC filings. Please also check biographies and work history of current and past company officers before investing in high volatility instruments, penny stocks, or equities with microcap classification. You can indeed make money on this equity instrument if you perfectly time your entry and exit. However, remember that penny stocks that have been the subject of an artificial hype usually unable to maintain its increased share price for more than just a few days. The price of a promoted high volatility instrument will almost always revert back. The only way to increase shareholder value is through legitimate performance backed up by solid fundamentals.

Our Final Perspective on GSE Systems

Although many other companies in the software?application industry are either recovering or due for a correction, GSE Systems may not be performing as strong as the other in terms of long-term growth potentials. To conclude, as of the 16th of November 2020, we believe that at this point, GSE Systems is very risky with above average chance of distress within the next 2 years. From a slightly different point of view, the entity appears to be undervalued. Our primary 30 days Buy-Hold-Sell recommendation on the firm is Cautious Hold.

About Contributor

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 Ellen Johnson do not own shares of GSE Systems. Please refer to our Terms of Use for any information regarding our disclosure principles.

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