Wetouch Technology (WETH) AI Stock Analysis

• Market Cap: $19.81M
• Dividend Yield: N/A
• Average Volume (3M): 243.53K
• Price to Earnings (P/E): 2.6
• Beta (1Y): 0.92
• Revenue Growth: 5.58%
• EPS Growth: 80.93%
• Country: US
• Employees: 131
• Sector: Real Estate
• Sector Strength: 53
• Industry: Real Estate - Services
• EPS (TTM): 0.28
• Shares Outstanding: 11,931,534
• 10 Day Avg. Volume: 495,527
• 30 Day Avg. Volume: 243,528
• PEG Ratio: -0.08
• Price to Book (P/B): <0.01
• Price to Sales (P/S): 0.49
• P/FCF Ratio: <0.01
• Enterprise Value/Market Cap: -3.25
• Enterprise Value/Revenue: -1.50
• Enterprise Value/Gross Profit: -4.24
• Enterprise Value/Ebitda: -6.07
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

• Rating: 65 Neutral
• 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 Business Overview & Revenue Model

Company Description

Wetouch 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 Money

Wetouch 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

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

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

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.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	42.88M	42.28M	39.71M	37.92M	40.79M	31.35M
Gross Profit	15.16M	13.61M	17.19M	14.05M	18.32M	14.55M
EBITDA	10.58M	9.97M	12.66M	12.32M	22.20M	13.26M
Net Income	7.58M	6.03M	8.26M	8.73M	17.39M	8.93M
Balance Sheet
Total Assets	137.02M	128.02M	119.64M	73.11M	68.68M	47.06M
Cash, Cash Equivalents and Short-Term Investments	110.45M	103.76M	98.04M	51.25M	46.16M	23.96M
Total Debt	1.46M	1.05M	1.71M	1.66M	2.03M	0.00
Total Liabilities	5.22M	3.43M	6.72M	4.01M	4.37M	2.71M
Stockholders Equity	131.81M	124.59M	112.92M	68.83M	64.31M	44.35M
Cash Flow
Free Cash Flow	6.72T	797.25B	10.46M	8.59M	2.36M	12.96M
Operating Cash Flow	6.72T	1.07T	12.72M	8.59M	14.05M	12.96M
Investing Cash Flow	-4.44K	-271.83B	-2.26M	0.00	6.16M	0.00
Financing Cash Flow	170.62K	7.59T	39.95M	-652.63K	1.86M	-4.70M

Wetouch Technology Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1.90
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: 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 1.9 is above the 20-day moving average (MA) of 1.50, above the 50-day MA of 1.26, and above the 200-day MA of 1.21, indicating a bullish trend. The MACD of 0.16 indicates Negative momentum. The RSI at 73.70 is Negative, neither overbought nor oversold. The STOCH value of 74.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WETH.

Wetouch Technology Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
WETH	65 Neutral	$19.81M	2.62	5.96%	―	5.58%	80.93%
OMH	52 Neutral	$26.80M	―	―	―	―	―
GBR	40 Neutral	$4.42M	―	-1.35%	―	4.14%	-124.53%
LRHC	39 Underperform	$6.96M	―	-611.63%	―	54.92%	-342.17%