LYFT, EDNT, or WORK:  Which is the Most Interesting Nasdaq Bargain Bet? 

Fiona - September 19, 2019

The bull market remains in place. But there are plenty of stocks that sit at cheap levels relative growth, even in the hi-tech Nasdaq space. We are going to take a look at three different Nasdaq plays that each can make an argument for “bargain” status as high-growth innovation-centric market ideas: LYFT Inc (NASDAQ:LYFT), Edison Nation Inc (NASDAQ:EDNT), and Slack Technologies Inc (NYSE:WORK).

 

LYFT Inc (NASDAQ:LYFT) is a rideshare app recent IPO that has been struggling. The company is sporting massive top-line growth, and many are perplexed by its poor behavior. But, at the root of the problem may be concerns that the company stands to potentially never make a dime of profit.

That dire warning was actually sounded by the CEO of UBER some months ago and is really about whether or not autonomous vehicles in the private sector on an industrial level are ever going to be a part of our reality. According to some, the autonomous vehicle story is now likely to be a public sector municipal transportation story, which could exclude LYFT and UBER from participation. In any case, the top-line growth story is in place and short interest is generally believed to be quite high, so some bounce action can be expected on some level.

LYFT Inc (NASDAQ:LYFT), as noted, operates a peer-to-peer marketplace for on-demand ridesharing in the United States and Canada. The company offers a multimodal platform that provides riders, personalized and on-demand access to various transportation options. It provides Ridesharing Marketplace, which facilitates lead generation, billing and settlement, support, and related activities to enable drivers to provide their transportation services to riders. 

The company also offers a network of shared bikes and scooters in various cities to address the needs of riders for shorter routes; Express Drive program, a flexible car rentals program that connects drivers who need access to a car with third-party rental car companies; and concierge for organizations to manage the transportation needs of their customers and employees. 

In addition, it integrates third-party public transit data into the Lyft app to offer riders various transportation options; offers various enterprise programs, including monthly ride credits for daily commutes, supplementing public transit by providing rides for the first and last leg of commute trips, late-night rides home, and shuttle replacement rides; and provides transportation solutions that can be customized for events, such as recruiting events, conferences, celebrations, meetings, and company retreats. 

The company was formerly known as Zimride, Inc. and changed its name to Lyft, Inc. in April 2013. Lyft, Inc. was incorporated in 2007 and is headquartered in San Francisco, California.

LYFT Inc (NASDAQ:LYFT) generated sales of $867.3M, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of 11.8% on the top line. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($3.3B against $2.1B).

 

Edison Nation Inc (NASDAQ:EDNT) might actually be the most interesting name in this list because it has the smallest market cap and most upside potential given recent trends.

The company is an inventors’ platform, helping new innovations blossom into marketability, and taking a piece of the action along the way. The products this company has helped bring along represent a long list of market successes, such as Ezy Dose Medi-Spout, “911 Help Now” pendant, Goodie Gusher party product line, Lullaplayer, My Buddy Bernie, and Smarter Specs. 

The company is also relaunching its Emmy award-winning TV show, “Everyday Edisons”, an inspirational reality TV series produced under license by Edison Nation, chronicling the stories of first-time inventors as they launch their unique products into the marketplace in conjunction with the Edison Nation product development platform.

EDNT is also sitting in a web of valuable partnerships with multiple Fortune 500 companies, including Walmart, Target, Rite-Aid, Disney, Home Depot, and Amazon.

This has added up to burgeoning financial success, with the top-line now growing at over 36 percent a year-over-year basis, to book nearly $6 million in revenues (compared to $4.39 million in the same period in 2018). The other big jump was on the gross profit side of the equation. In all, gross profit increased 61.8% to $2.04 million in the second quarter of 2019, compared to $1.26 million in the second quarter of 2018. 

Gross profit margin was 34.2% in the second quarter of 2019, compared to 28.8%, in the same period in 2018. In other words, the company is bringing in more money and margins are growing. That’s a tremendously encouraging set of trends.

EDNT shares are down about 65% since beginning to trade live on the Nasdaq back in May of 2018. The stock has started to show strong signals of a bullish basing pattern, with major moving averages now having time to slide under price and start to rise. Volume has also been increasing as the company posts turnaround financial data.

Edison Nation Inc (NASDAQ:EDNT) has been piling up recent catalysts as well. Most recently, the company hit the wires with news that it is joining the relief effort to help families in the Bahamas recover from Hurricane Dorian. In this effort, the company is partnering with Juiced2Go to donate emergency mobile phone batteries.

According to the release, Juiced2Go develops disposable emergency mobile phone batteries, designed to connect to both iPhones and Android devices to generate up to 8 hours of talk time when other forms of power are unavailable. Edison Nation is partnering with them to send 5,000 batteries to families in the Bahamas currently suffering from power outages.

“We want families to feel safe and connected as much as possible as a result of this overwhelming event and rebuilding process,” said Sidney Richlin, Ronny Mirel, and Dianne Magsari the Co-Founders of Juiced2Go.

 

Slack Technologies Inc (NYSE:WORK) is another riches to rags growth story, and it might represent a bargain bet if things turn a fresh corner.

The company recently announced a beat relative to Wall Street expectations for its first quarterly report following its high-profile IPO. But that reporting event included some guidance that brings the time table for eventual profitability into the light – the Q3 loss was guided to a wider level, and the company also suggested that the full-year rev growth rate would slide to 50%.

That has to be considered in light of sales growth coming in a 100% for the prior year. The drop-off is concerning for a company at this stage of development and already trading on the Nasdaq. Ultimately, the spoiler here could be Microsoft, who has plans to put a competing product out there. The marketing spend that it would take WORK to compete with an offering from MSFT could drain the company’s will, cash, and investment thesis. 

Slack Technologies Inc (NYSE:WORK) frames itself as a business technology software platform in the United States and internationally. 

Its platform brings together people, applications, and data, as well as sells its offering under a software-as-a-service model. The company was formerly known as Tiny Speck, Inc. and changed its name to Slack Technologies, Inc. in 2014. Slack Technologies, Inc. was founded in 2009 and is headquartered in San Francisco, California.

Since hitting the public exchange, WORK shares are down about 40%, with some consistent support starting to appear in the $25/share area. Part of this story is likely about momentum and inertia: the stock is much cheaper now than it was back in June when it started trading. If market participants can start to see signs of a supportive bid or base come into play, it may allow speculators to get excited about a bargain.

Slack Technologies Inc (NYSE:WORK) generated sales of $145M, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of 7.5% on the top line. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($785.3M against $402.3M).

Disclaimer: Please note that we have been compensation is $6500 for a 3-day content marketing campaign by third party World Wide Holdings LLC starting 09/19/2019.

Fiona

Fiona

Fiona is a finance graduate and an expert in analyzing market trends.

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