IZMO Receives 'Hold' Rating from MarketsMOJO, Shows Strong Performance but Concerns Remain

IZMO, a microcap IT software company, has recently received a 'Hold' rating from MarketsMOJO on October 14, 2024. This upgrade is based on the company's low Debt to Equity ratio, which is currently at 0 times.

Technically, the stock is in a Mildly Bullish range and has shown improvement since October 10, 2024, generating a return of 2.37%. The MACD and KST technical factors also indicate a Bullish trend.

With a ROE of 8.5, the company is fairly valued with a Price to Book Value of 1.9. However, the stock is currently trading at a premium compared to its historical valuations. In the past year, the stock has generated a return of 117.38%, while its profits have only increased by 18.1%. This results in a PEG ratio of 1.8.

Institutional investors have shown an increasing interest in IZMO, with a 1.84% increase in their stake in the previous quarter. They currently hold 4.28% of the company, indicating their confidence in its fundamentals.

IZMO has outperformed the market (BSE 500) with a return of 117.38% in the last year, compared to the market's return of 35.61%.

However, the company's management efficiency is a cause for concern, with a low ROE of 7.77%. This signifies a low profitability per unit of shareholders' funds. Additionally, the company has shown poor long-term growth, with an annual growth rate of only 44.47% in operating profit over the last 5 years.

In the latest quarter, Jun 24, IZMO's results have been flat, with a decrease of 10.6% in PBT LESS OI(Q) at Rs 5.25 crore. The DEBTORS TURNOVER RATIO(HY) is also at its lowest at 3.32 times, and the PAT(Q) has fallen by 7.4% at Rs 6.03 crore.

Overall, while IZMO has shown market-beating performance in the past year, its management efficiency and long-term growth are areas of concern. Investors are advised to hold their position in the stock for now.