Realnetworks Story

RNWK -- USA Stock

USD 4.37 0.05 1.13%

Macroaxis Story

As many millenniums are excited about communication services space, it is only fair to examine RealNetworks. We will evaluate why we are still confident in anticipation of a recovery. Is current the firm value sustainable? We will go over RealNetworks valuation drivers to give you a better outlook on taking a position in it.

Published over a month ago

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Is RealNetworks (NASDAQ:RNWK) valuation reasonable?

RealNetworks currently holds 17.03 M in liabilities with Debt to Equity (D/E) ratio of 0.48, which is about average as compared to similar companies. The entity has a current ratio of 1.11, suggesting that it may have difficulties to pay its financial obligations when due. We provide trade recommendations to complement the recent expert consensus on RealNetworks. Our dynamic recommendation engine exercises a multidimensional algorithm to analyze the firm's potential to grow using all technical and fundamental data available at the time.

We determine the current worth of Realnetworks 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 Realnetworks based exclusively on its fundamental and basic technical indicators. By analyzing Realnetworks'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 Realnetworks'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 Realnetworks. We calculate exposure to Realnetworks's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Realnetworks's related companies.

Realnetworks Investment Alerts

Realnetworks 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 Realnetworks performance across your portfolios.Please check all investment alerts for Realnetworks

Realnetworks Valuation Ratios as Compared to Competition

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

How Realnetworks utilizes its cash?

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

Realnetworks Net Cash Flow from Operations is increasing as compared to previous years. The last year's value of Net Cash Flow from Operations was reported at (22.83 Million)

Breaking it down a bit more

The modest gains experienced by current holders of RealNetworks created some momentum for traders as it was traded today as low as 1.68 and as high as 1.8 per share. The company directors and management have been quite successful in maneuvering the stock at opportune times to take advantage of all market conditions in December. The stock standard deviation of daily returns for 30 days investing horizon is currently 4.32. This high volatility is attributed to the latest market swings and not so good earnings reports for some of the RealNetworks partners.

	2018	2019	2020	2021 (projected)
Accounts Payable	3.91 M	4.93 M	5.67 M	5.82 M
Receivables	11.75 M	29.51 M	33.93 M	32.84 M

Accounts Payable Receivables

Margins Breakdown

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

	Operating Margin	(23.39)
	EBITDA Margin	(13.11)
	Gross Margin	57.54
	Profit Margin	(14.42)

RealNetworks Revenue Per Employee is increasing over the last 8 years. The recent value of RealNetworks Revenue Per Employee is 367,193. RealNetworks Average Assets is fairly stable at the moment. Furthermore, RealNetworks Earnings Before Interest Taxes and Depreciation Amortization USD is decreasing over the last 8 years. The previous year's value of RealNetworks Earnings Before Interest Taxes and Depreciation Amortization USD was -33,485,246. RealNetworks Revenue Per Employee is increasing over the last 8 years. RealNetworks Average Assets is decreasing over the last 8 years. Furthermore, RealNetworks Earnings Before Interest Taxes and Depreciation Amortization USD is fairly stable at the moment.

Will RealNetworks recent surge continue?

The expected short fall is down to -3.73 as of today. RealNetworks shows above-average downside volatility for the selected time horizon. We advise investors to inspect RealNetworks further and ensure that all market timing and asset allocation strategies are consistent with the estimation of RealNetworks future alpha.

Our Final Perspective on RealNetworks

Although other entities under the electronic gaming & multimedia industry are still a bit expensive, RealNetworks may offer a potential longer-term growth to traders. To conclude, as of the 22nd of January 2021, we believe that at this point, RealNetworks is very risky with high odds of distress within the next 2 years. From a slightly different point of view, the entity appears to be undervalued. However, our concluding 30 days buy-or-sell advice on the firm is Strong Sell.

About Contributor

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 Realnetworks. Please refer to our Terms of Use for any information regarding our disclosure principles.

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