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Mitek Systems, Up 98% This Year, Is On The Verge Of A Nosedive: StreetSweeper

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Mitek Systems, Up 98% This Year, Is On The Verge Of A Nosedive: StreetSweeper

Mitek Systems, Inc. (NASDAQ: MITK) shares are tumbling 10 percent on Thursday morning after TheStreetSweeper released a report describing seven reasons why Mitek’s stock is on the verge of a nosedive.

Here’s a rundown of the full list:

  • 1. Since November, Mitek shares are up roughly 170 percent. In that time, company insiders have sold about $9 million in stock.
  • 2. Mitek’s decision to drop its patent infringement case against Top Image Systems Ltd. (NASDAQ: TISA) is an indication of how little value Mitek places on its intellectual property.
  • 3. The competition has passed Mitek by. In January, USAA became the first major U.S. financial institution to introduce full-scale facial and voice recognition features on its mobile app.
  • 4. USAA worked with Doan to develop its product, and other large banks are now working with Doan as well.

Related Link: Goldman Sachs Calls Out Brazilian Fiscal Imbalances

  • 5. Mitek’s massive run-up in valuation from $90 million to $292 million was triggered by its acquisition of ID checker, only a $10 million company.
  • 6. At its current share price, Mitek’s price/sales ratio and trailing P/E ratios are both more than triple those of the overall industry.
  • 7. Finally, while Mitek turned a modest $582,000 in profit for the first time in 2015, the company has accumulated more than $33 million in debt and has paid its top three executives $2.8 million.

“So altogether, we think Mitek stock will bobble and stumble by about 50 percent in the near-term,” TheStreetSweeper concludes.

Even after Thursday morning’s swoon, Mitek’s stock remains up 98.3 percent in 2016.

Disclosure: the author holds no position in the stocks mentioned.

Latest Ratings for MITK

DateFirmActionFromTo
Nov 2018UpgradesHoldBuy
Aug 2018DowngradesBuyHold
Dec 2016Initiates Coverage OnBuy

View More Analyst Ratings for MITK
View the Latest Analyst Ratings

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