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Wetouch Technology (WETH)
NASDAQ:WETH
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Wetouch Technology (WETH) AI Stock Analysis

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WETH

Wetouch Technology

(NASDAQ:WETH)

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Neutral 65 (OpenAI - 4o)
Rating:65Neutral
Price Target:
Wetouch Technology's stock is characterized by moderate financial performance and attractive valuation, offset by technical indicators that suggest potential short-term volatility. The company's financials are stable, but profitability and cash flow challenges, alongside high leverage, pose risks. The stock's undervaluation could appeal to value investors, while the absence of a dividend yield might deter others.

Wetouch Technology (WETH) vs. SPDR S&P 500 ETF (SPY)

Wetouch Technology Business Overview & Revenue Model

Company DescriptionWetouch Technology Inc. engages in the research, development, manufacture, sale, and servicing of medium to large sized projected capacitive touchscreens in the Peoples Republic of China, Taiwan, South Korea, and internationally. Its product portfolio comprises medium to large sized projected capacitive touchscreens, which range from 7.0 inch to 42-inch screens. The company offers Glass-Glass, which are primarily used in GPS/car entertainment panels in mid-size and luxury cars, industrial human-machine interface (HMI), financial and banking terminals, point of sale, and lottery machines; Glass-Film-Film, which are primarily used in high-end GPS and entertainment panels, industrial HMI, financial and banking terminals, lottery, and gaming industry; Plastic-Glass, which are used in GPS/entertainment panels motor vehicle GPS, smart home, robots, and charging stations; and Glass-Film that are used in industrial HMI. Its products are also used in financial terminals, automotive, POS, gaming, lottery, medical, HMI, and other specialized industries. The company was founded in 2011 and is based in Meishan, China.
How the Company Makes MoneyWetouch Technology generates revenue primarily through the sale of its touchscreen products to manufacturers and end-users across different industries. The company earns money by designing and producing customized touchscreen panels that meet the specific requirements of its clients, which include businesses in the industrial, automotive, and consumer electronics sectors. A significant portion of its earnings comes from long-term contracts and partnerships with Original Equipment Manufacturers (OEMs) and other key players in these industries, providing consistent demand for its products. Additionally, Wetouch Technology may engage in research and development activities to innovate and improve its product offerings, potentially leading to new revenue streams in emerging markets or applications.

Wetouch Technology Financial Statement Overview

Summary
Overall, Wetouch Technology exhibits moderate financial health. The company demonstrates operational efficiency but faces challenges in profitability and cash flow generation. The lack of debt is a positive aspect, but the high leverage due to substantial liabilities poses risks. Strategic improvements in revenue growth and cash flow management could enhance the financial outlook.
Income Statement
70
Positive
Wetouch Technology's income statement shows moderate performance. The gross profit margin for TTM is 31.1%, indicating efficient production cost management. The net profit margin is 9.4%, which is reasonable but has decreased from the prior year. Revenue growth has been slow, with only a 3.3% increase from the previous year. EBIT and EBITDA margins stand at 18.2% and 18.6% respectively, indicating stable operational efficiency. However, the decline in net income suggests potential challenges in maintaining profitability.
Balance Sheet
65
Positive
The balance sheet presents a mixed picture. The company has no total debt in the TTM period, which is positive. However, the equity ratio is 9.7%, showing high leverage and limited equity buffer against liabilities. Return on Equity (ROE) is 3.0% for TTM, which is low relative to industry standards, indicating limited profitability relative to equity. The current asset management strategies might need reassessment to enhance financial stability.
Cash Flow
60
Neutral
Cash flow analysis reveals challenges in generating free cash flow. The Free Cash Flow decreased significantly in TTM compared to the previous year. The operating cash flow to net income ratio is 0.77, reflecting a reasonable conversion of income to cash. However, the free cash flow to net income ratio is low at 0.15, indicating potential issues in cash generation after capital expenses. Active management of cash flow is crucial to improve liquidity.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue41.02M42.28T39.71M37.92M40.79M31.35M
Gross Profit12.76M13.61T17.19M14.05M18.32M14.55M
EBITDA7.65M9.32T12.66M11.42M13.01M12.94M
Net Income3.86M6.03T8.26M8.73M17.39M8.93M
Balance Sheet
Total Assets133.14M10.00T>119.64M73.11M68.68M47.06M
Cash, Cash Equivalents and Short-Term Investments106.74M10.00T>98.04M51.25M46.16M23.96M
Total Debt434.58K1.05T1.71M1.66M2.03M0.00
Total Liabilities3.67M3.43T6.72M4.01M3.24M2.28M
Stockholders Equity129.48M10.00T>112.92M68.83M64.31M44.35M
Cash Flow
Free Cash Flow588.63K797.25B10.46M8.59M2.36M12.96M
Operating Cash Flow2.97M1.07T12.72M8.59M14.05M12.96M
Investing Cash Flow-2.38M-271.83B-2.26M0.006.16M0.00
Financing Cash Flow8.02M7.59T39.95M-652.63K1.86M-4.70M

Wetouch Technology Technical Analysis

Technical Analysis Sentiment
Positive
Last Price1.23
Price Trends
50DMA
1.03
Positive
100DMA
1.00
Positive
200DMA
1.22
Positive
Market Momentum
MACD
0.07
Positive
RSI
55.78
Neutral
STOCH
39.29
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WETH, the sentiment is Positive. The current price of 1.23 is above the 20-day moving average (MA) of 1.22, above the 50-day MA of 1.03, and above the 200-day MA of 1.22, indicating a bullish trend. The MACD of 0.07 indicates Positive momentum. The RSI at 55.78 is Neutral, neither overbought nor oversold. The STOCH value of 39.29 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WETH.

Wetouch Technology Risk Analysis

Wetouch Technology disclosed 54 risk factors in its most recent earnings report. Wetouch Technology reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 1 New Risks
1.
Upon the effectiveness of the Trial Administrative Measures, we could be subject to the Trial Administrative Measures, as the Company has: (i) 50% or more of the issuer's operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial statements for the most recent accounting year is accounted for by PRC domestic companies; and (ii) the main parts of the issuer's business activities are conducted in mainland China, or its main places of business are located in mainland China, or the senior managers in charge of its business operation and management are mostly Chinese citizens or domiciled in mainland China; and, if required, we cannot assure you that we will be able to complete such process on time or at all. Q4, 2022

Wetouch Technology Peers Comparison

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
$5.76B62.603.60%14.24%424.78%
77
Outperform
$7.11B29.1814.26%1.17%6.23%10.12%
65
Neutral
2.533.20%6.48%-45.29%
62
Neutral
$1.45B-22.69-5.37%-7.61%-212.91%
56
Neutral
$364.06M-22.77-95.07%17.26%-70.07%
53
Neutral
$2.04B-23.34-1.54%2.66%-6.36%-151.95%
65
Neutral
$2.17B12.193.79%4.94%3.15%1.96%
* Real Estate Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
WETH
Wetouch Technology
1.23
-0.72
-36.92%
GBR
New Concept Energy
1.04
-0.23
-18.11%
UOKA
MDJM
2.83
-12.19
-81.16%
UK
Ucommune International
1.01
-0.32
-24.06%
OMH
Ohmyhome Limited
1.27
-3.35
-72.51%
LRHC
La Rosa Holdings Corp.
7.09
-43.31
-85.93%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jan 17, 2025