Are Secoo Holding (USA Stocks:SECO) conflicting fundamental indicators contributing to the latest slide?

SECO Stock

USD 3.80 2.12 126.19%

Macroaxis Story

Secoo Holding is scheduled to announce its earnings tomorrow. While some generation-Y investors are indifferent towards internet & direct marketing retail space, it makes sense to outline Secoo Holding using its fundamentals . We will evaluate why we are still confident in anticipation of a recovery. Will institutional investors continue to hold, or should we expect a sell-off?

Published over a month ago

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Secoo Holding is UNDERVALUED at 6.06 per share with modest projections ahead.

Secoo Holding owns Efficiency Ratio (i.e., Sharpe Ratio) of -0.0427, which indicates the firm had -0.0427% of return per unit of risk over the last 3 months. Macroaxis standpoint towards measuring the risk of any stock is to look at both systematic and unsystematic factors of the business, including all available market data and technical indicators. Secoo Holding exposes twenty-eight different technical indicators, which can help you to evaluate volatility that cannot be diversified away. Please be advised to validate Secoo Holding coefficient of variation of (1,716), and Risk Adjusted Performance of (0.07) to confirm the risk estimate we provide.

Are Secoo Holding (USA Stocks:SECO) conflicting fundamental indicators contributing to the latest slide?

Typically, a company's financial statements are the reports that show the financial position of the company. There are three main documents that fall into the category of financial statements. These documents include Secoo Holding income statement, its balance sheet, and the statement of cash flows. Potential Secoo Holding investors and stakeholders use financial statements to determine how well the company is positioned to perform in the future. Although Secoo Holding investors may use each financial statement separately, they are all related. The changes in Secoo Holding's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Secoo Holding's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet, but not equivalent to net income shown on the income statement. Please read more on our technical analysis and fundamental analysis pages.

The goal of Secoo Holding fundamental analysis is to do accurate financial forecasts. There are several possible objectives to fundamental analysis, such as projecting of Secoo Holding performance into the future periods or doing a reasonable stock valuation. The intrinsic value of Secoo Holding shares is the value that is considered the true value of the share. If the intrinsic value of Secoo is higher than its market price, buying is generally recommended. If it is equal to the market price, it is recommended to hold; and if it is less than the market price, then one should sell all shares Secoo Holding.

Please read more on our fundamental analysis page.

How important is Secoo Holding's Liquidity

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

How does Secoo utilize its cash?

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

Is Secoo Holding valued appropriately by the market?

The entity reported the previous year's revenue of 3.13 B. Net Loss for the year was (565.75 M) with profit before overhead, payroll, taxes, and interest of 118.16 M.

Our Secoo analysis suggests possible reversion in January

Latest variance is at 53.8. Secoo Holding is displaying above-average volatility over the selected time horizon. Investors should scrutinize Secoo Holding independently to ensure intended market timing strategies are aligned with expectations about Secoo Holding volatility. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Secoo Holding'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 Secoo Holding'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.

The Bottom Line

Whereas some companies in the internet retail industry are either recovering or due for a correction, Secoo may not be as strong as the others in terms of longer-term growth potentials. With an impartial outlook on the current market volatility, it may be better to hold off any inventment activity and neither buy nor drop any shares of Secoo Holding at this time. The Secoo Holding risk-reward trade off 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 Secoo Holding.

Editorial Staff

Raphi Shpitalnik is a Junior Member of Macroaxis Editorial Board. Raphael is a young entrepreneur who joined Macroaxis on a part-time basis at the beginning of the pandemic and eventually acquired a real taste for investing and fintech. He likes to analyze different equity instruments across a wide range of industries, focusing primarily on consumer products, sports, fintech, cannabis, and AI. 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 Raphi Shpitalnik do not own shares of Secoo Holding. Please refer to our Terms of Use for any information regarding our disclosure principles.

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