Kalera AS Shareholders (OB: KAL) could be worried after seeing the share price drop 23% in the last quarter. While this may be a setback, it does not negate the good feedback received over the past twelve months. During that time, we saw the stock easily outperform the market, gaining 56%.
Check out our latest analysis for Kalera
With only US $ 1,204,675 in sales in twelve months, we don’t think the market considers Kalera to have proven its business plan. It therefore seems that shareholders are too busy dreaming about the progress to come rather than dwelling on the current (lack of) income. It seems likely that some shareholders believe that Kalera will push the business plan significantly for too long.
We believe that companies that do not have significant revenues or profits present a fairly high risk. There is usually a good chance that they will need more money for the development of their business, putting them at the mercy of the capital markets to raise equity. So the stock price itself has an impact on the value of the stock (because it determines the cost of capital). While some of these companies are doing very well in the long run, others are put forward by developers before they fall back to earth and go bankrupt (or be recapitalized). Kalera has already given some investors a taste of the payoffs high risk investing can deliver, if your timing is right.
Kalera had cash in excess of all liabilities by US $ 73 million when it was last released (March 2021). That’s not too bad, but management may need to think about raising capital or going into debt, unless the business is close to breaking even. With a stock price rising 121% over the past year, the market appears bullish on the potential, despite the consumption of cash. You can see in the image below, how Kalera’s cash levels have changed over time (click to view values).
Of course, the truth is that it is difficult to assess companies without a lot of income or profit. One thing you can do is check to see if company insiders are buying shares. If they are buying a significant amount of stocks, that is certainly a good thing. Fortunately, we are able to provide you with this free insider buying (and selling) chart.
A different perspective
Kalera has a total shareholder return of 56% for the past year. We regret to report that the share price has fallen 23% over ninety days. Shorter-term price movements often don’t mean much to the company itself. I find it very interesting to look at the long-term share price as an indicator of company performance. But to really get an overview, we have to take other information into account as well. For example, we have identified 5 warning signs for Kalera (2 are of concern) that you should be aware of.
If you like to buy stocks alongside management then you might love this free list of companies. (Hint: the insiders bought them).
Please note that the market returns quoted in this article reflect the average market weighted returns of stocks that are currently trading on NO stock exchange.
If you are looking to trade Kalera, open an account with the cheapest * professional approved platform, Interactive Brokers. Their clients from more than 200 countries and territories trade stocks, options, futures, currencies, bonds and funds around the world from a single integrated account.
This Simply Wall St article is general in nature. It does not constitute a recommendation to buy or sell any stock and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in the mentioned stocks.
*Interactive Brokers Ranked Least Expensive Broker By StockBrokers.com Online Annual Review 2020
Do you have any feedback on this item? Are you worried about the content? Get in touch with us directly. You can also send an email to the editorial team (at) simplywallst.com.