Stock for AcuityAds Holdings Inc. (NASDAQ: ATY) has been on a sharp bearish movement since Wednesday. The stock has been rapidly plummeting, losing 19.6% over the last week, and 19.3% in the prior month. This is a continuation of the broader bearish plummet for ATY. As a result, the share price dropped by 70% in the last six months and 86% over the last year. These indicators are alarming for the digital tech company, which strategically aims for expansion, in order to attain financial sustainability. Plummeting market cap is an indicator for deteriorating prospects of growth and sustainability for AcuityAds. The aftermarket, however, did see a turn of events, with ATY gaining up to 12.3% over the weekend.
ATY Upward Swing and Financial Reports for Q4
The steady rise of ATY against the general bearish trajectory relates to the announcement of last year’s financial results, along with the last quarter. The following stand as the most notable dimensions from the reported financial figures:
- Revenue for Q4 was $36.8M, which was 33% higher than that of Q3.
- Gross margin for Q4 of 2021 was 52.0%. whereas the gross margin for Q4 in 2020 was 52.1%. This indicates a reduction in operational efficiency for AcuityAds, as opposed to an improvement over time.
- Gross profit for Q4 2021 was $19.1M, which was a 4.4% increase from the gross profit reported in Q4 2020.
- Adjusted EBITDA fell to $5.9M in Q4 2021, from $7.8M in Q4 2020.
- Net Profit dropped to $2.5M in Q4 2021, from $4.2M in Q4 2020.
- In the year ended 2021, the company held $102.2M in cash and equivalents, which was a vast improvement in liquidity from $22.6M in the prior year.
Underperformance for ATY EPS
The most concerning aspect of the financial reports was AcuityAd’s Earnings per Share (EPS). EPS target was set at $0.06 per share, given poor market performance for the firm. This would have been a drop from last year’s $0.10 per share. Despite these estimations, reported EPS dropped to $0.03, which was double the anticipated drop.
After a continuous bearish trend, ATY has been on a steady upward climb over the weekend. This comes against the reported financial position and income figures for the company, which shows steady improvement in a number of areas. However, despite increases in revenue and liquidity positions, the company’s net profit and subsequent EPS markedly underperformed and missed expectation targets. The current upward swing, having no report justifying the climb potentially ties into social media hype for a pump and dump scheme.