Our viewpoint on Imedia Brands (NASDAQ:IMBI) and Ulta Beauty (NASDAQ:ULTA)?

IMBI Stock

USD 0.78 0.07 8.24%

Macroaxis Story

While some millenniums may be indifferent towards consumer cyclical space, we will examine how stable are Imedia Brands fundamentals compared to Ulta Beauty. We are going to examine some of the competitive aspects of both Imedia and Ulta Beauty.

Published over two months ago

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By analyzing existing fundamental drivers between Imedia Brands and Ulta Beauty, you can compare the effects of market volatilities on both companies' prices and check if they can diversify away market risk if combined in one of your portfolios. You can also utilize pair trading strategies for matching a long position in Ulta Beauty with a short position in Imedia Brands. Check out our pair correlation module for more information.

Let's begin by analyzing the assets.

The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Imedia Brands has an asset utilization ratio of 2662043.0 percent. This implies that the company is making $26620.43 for each dollar of assets. An increasing asset utilization means that Imedia Brands is more efficient with each dollar of assets it utilizes for everyday operations.

Our viewpoint on Imedia Brands (NASDAQ:IMBI) and Ulta Beauty (NASDAQ:ULTA)?

Watch out for price decline

Please consider monitoring IMedia Brands on a daily basis if you are holding a position in it. IMedia Brands is trading at a penny-stock level, and the possibility of delisting is much higher compared to other stocks. 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 IMedia Brands stock to be traded above the $1 level to remain listed. If IMedia Brands 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.

How important is IMedia Brands's Liquidity

IMedia Brands financial leverage refers to using borrowed capital as a funding source to finance IMedia Brands ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. IMedia Brands 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 IMedia Brands's total debt and its cash.

How does IMedia utilize its cash?

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

IMedia Brands Net Cash Flow from Operations is most likely to decrease significantly in the upcoming years. The last year's value of Net Cash Flow from Operations was reported at (1.31 Million)

Acquisition by Porter Darryl C of 67241 shares of Imedia Brands subject to Rule 16b-3

Legal trades by IMedia Brands 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:

Imedia insider trading alert for grant of common stock by Porter Darryl C, the corporate stakeholder, on 16th of June 2022. This event was filed by Imedia Brands Inc with SEC on 2022-06-16. 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 IMedia Brands Further

Revenue is income that a firm generates from business activities such us rendering services or selling goods to customers. It is a crucial part of a business and an essential item when evaluating a company's financial statements. Revenues from a firm's primary business operations can be reported on the income statement as sales revenue, net sales, or simply sales, depending on the industry in which a given company operates.
Revenue is typically recorded when cash or cash equivalents are exchanged for services or goods and can include product or services discounts, promotions, as well as early payments on invoices or services rendered in advance.

Revenue Breakdown

Lets now check Imedia Brands revenue. Based on the latest financial disclosure, Imedia Brands reported 612.27 M of revenue. This is 91.41% lower than that of the Consumer Cyclical sector and 95.67% lower than that of the Specialty Retail industry. The revenue for all United States stocks is 93.51% higher than that of Imedia Brands. As for Ulta Beauty we see revenue of 9.37 B, which is 33.73% lower than that of the Specialty Retail

Sector

7.1 B

ULTA

9.4 B

IMBI	612.27 Million	3.58
Sector	7.13 Billion	41.67
ULTA	9.37 Billion	54.76

Chances of Imedia Brands to recoup

The treynor ratio is down to -0.99 as of today. Imedia Brands is displaying above-average volatility over the selected time horizon. Investors should scrutinize Imedia Brands independently to ensure intended market timing strategies are aligned with expectations about Imedia Brands volatility. Imedia Brands is a potential penny stock. Although Imedia Brands 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 Imedia Brands. We encourage investors to look for signals such as 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 Imedia instrument if you perfectly time your entry and exit. However, remember that penny stocks that have been the subject of artificial hype usually unable to maintain their 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 Conclusion on Imedia Brands

While some other companies in the specialty retail industry are either recovering or due for a correction, Imedia may not be as strong as the others in terms of longer-term growth potentials. All things considered, as of the 22nd of November 2022, our analysis shows that Imedia Brands responds to the market. The company is undervalued and projects average probability of distress for the next 2 years. However, our primary 90 days buy-sell recommendation on the company is Strong Sell.

Editorial Staff

Vlad Skutelnik is a Macroaxis Contributor. Vlad covers stocks, funds, cryptocurrencies, and ETFs that are traded in North America, focusing primarily on fundamentals, valuation and market volatility. He has many years of experience in fintech, predictive investment analytics, and risk management. 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 Vlad Skutelnik do not own shares of IMedia Brands. Please refer to our Terms of Use for any information regarding our disclosure principles.

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