Last Updated: 16 Oct 2024
Executive Summary
Agora Inc. (API) is a leading provider of Real-Time Interaction Platform as a Service (RTE-PaaS) in China and globally. Despite facing headwinds in recent quarters, the company's fundamentals remain strong, with revenue growth and gross profit margins showing resilience. The stock is currently trading below analyst target prices, offering potential upside for investors.
Company Overview
Agora provides a cloud-based platform that enables real-time communication, including video, audio, and messaging. Its clients span various industries, including education, healthcare, and entertainment. The company has a global presence, with operations in China, the US, and other international markets.
Fundamental Analysis
Revenue: Agora's revenue for the last twelve months (TTM) reached $138.3 million, representing a 5% year-over-year growth.
Profitability: The company is currently operating at a loss, with a TTM net income of -$36.5 million. However, its gross profit margin of 72% remains healthy.
Valuation: The stock is trading at a forward price-to-earnings (PE) ratio of 416.67, indicating that investors are pricing in significant growth potential.
Balance Sheet: Agora has a strong balance sheet with $319.9 million in cash and equivalents and no long-term debt.
Technical Analysis
Trend: The stock has been in a downtrend since reaching a 52-week high of $6.43 in September 2021.
Support and Resistance: The stock is currently trading above its 50-day moving average of $2.451, which is a potential support level. Resistance is expected at the 200-day moving average of $2.542.
Momentum: The relative strength index (RSI) is currently at 38, indicating that the stock is neither overbought nor oversold.
Short Term Outlook
In the short term, Agora's stock price is likely to remain range-bound between $2.45 and $2.54. The company's fundamentals are strong, but the overall market sentiment and macroeconomic factors may continue to weigh on the stock.
Long Term Outlook
Over the long term, Agora has significant growth potential. The demand for real-time communication services is expected to continue to grow, and the company is well-positioned to capitalize on this trend. Additionally, the company's global expansion efforts and its focus on innovation should drive future growth.
Analyst Recommendations
Analysts are generally bullish on Agora's long-term prospects. One analyst has a strong buy rating and a target price of $2.82, while two others have hold ratings. The consensus analyst rating is a hold.
