Jet Freight Logistics Downgraded to 'Sell' by MarketsMOJO Due to Weak Fundamentals and High Debt.

Jet Freight Logistics, a microcap logistics company, has recently been downgraded to a 'Sell' by MarketsMOJO on November 5th, 2024. This decision was based on several factors, including weak long-term fundamental strength, high debt to EBITDA ratio, and low profitability per unit of shareholders' funds.
One of the main reasons for the downgrade is the company's 9.24% CAGR growth in operating profits over the last 5 years, which is considered weak in the logistics industry. Additionally, Jet Freight Logistics has a high debt to EBITDA ratio of 5.31 times, indicating a low ability to service its debt.

Moreover, the company's return on equity (avg) is only 3.74%, which is below the industry average and signifies low profitability. Furthermore, 26.16% of the promoter shares are pledged, which can put additional downward pressure on the stock prices in falling markets.

Jet Freight Logistics has also underperformed the market in the last 1 year, generating a return of only 17.37%, compared to the market (BSE 500) returns of 32.67%. However, the company did show positive results in June 2024, with a significant growth in PAT (HY) at Rs 3.73 crore and PBT LESS OI (Q) at Rs 1.41 crore.

On the technical front, the stock's trend is sideways, indicating no clear price momentum. The technical trend has deteriorated since November 5th, 2024, and has generated -2.26% returns since then.

Despite the downgrade, Jet Freight Logistics has an attractive valuation with a ROCE of 3.6 and an enterprise value to capital employed ratio of 1.1. However, the stock is currently trading at a premium compared to its average historical valuations. Additionally, while the stock has generated a return of 17.37% in the past year, its profits have only risen by 186.4%, resulting in a PEG ratio of 0.1.

In conclusion, MarketsMOJO's downgrade of Jet Freight Logistics to 'Sell' is based on the company's weak long-term fundamentals, high debt, and low profitability. Investors should carefully consider these factors before making any investment decisions.