LoopUp Group PLC

LoopUp Group PLC (LON: LOOP) is an FTSE AIM All-Share quoted Company that provides premium cloud communications services. It has global platforms which facilitate cloud telephony, remote meetings, and managed events.

Rationale for Valuation – Watch at GBX 7.25

• Decrease in Top Line: The Company expects a decrease in revenue and EBITDA to £19.5 million in FY21 from £50.2 million in FY20 and £0.9 million in FY21 from £15.3 million in FY20, respectively.
• Weak Balance Sheet: The Group recorded a significant decline in gross cash of £5.5 million in FY21 from £12.1 million in FY20 and an increase in net debt of £2.5 million in FY21 from £0.7 million in FY20.
• Subdued Investors’ Sentiments: The geopolitical tensions between Russia & Ukraine can continue to dampen the investors’ sentiments.
• Small Market Capitalization: It's a penny stock with a low market capitalization, which is exposed to significant market volatilities.
• Technical Indicator: LOOP’s stock price is trading below 20-Day EMA (GBX 8.18), reflecting a share price downtrend.

One Year Share Price Chart

(Data Source: Refinitiv, Analysis by Kalkine Group)

Conclusion

Please note markets are trading in a highly volatile zone currently due to certain macro-economic and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Based on the Company's decrease in the top line, weak balance sheet, penny nature, subdued investors sentiments, and bearish technical indicators, we have given a “WATCH” recommendation on LoopUp Group PLC at the closing market price of GBX 7.25 (as of 17 March 2022).

Investors can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario.

Note 1: The reference data in this report has been partly sourced from REFINITIV.

Note 2: Investment decisions should be made depending on the investors' appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the Valuation has been achieved and subject to the factors discussed above.

Note 3: Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

  Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

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