MarketsMOJO Downgrades Nazara Technologies to 'Sell' Due to Expensive Valuation and Negative Technical Trend

MarketsMOJO, a leading financial research and analysis firm, has downgraded its stock call on Nazara Technologies to 'Sell' on February 14, 2024. This decision was based on the company's ROE of 5, which indicates an expensive valuation with a price to book value of 4.7. Additionally, the stock is currently trading at a discount compared to its average historical valuations.
Despite a strong return of 54.35% in the past year, Nazara Technologies' profits have only risen by 68.7%, resulting in a PEG ratio of 1.2. This suggests that the stock may be overvalued and not a good investment option at this time.

However, there are some positive factors to consider. The company has a low debt to equity ratio and has shown healthy long-term growth with net sales increasing by 40.59% and operating profit by 185.70%. In fact, Nazara Technologies has declared positive results for the last 7 consecutive quarters, with its highest net sales, PBDIT, and PBT less OI in the last quarter.

On the technical front, the stock's trend is currently sideways, indicating no clear price momentum. The technical trend has also deteriorated since February 14, 2024, generating a negative return of -0.82%.

One of the reasons for the downgrade is the high institutional holdings of 26.37%. These investors have better resources and capabilities to analyze the fundamentals of companies, making their decision to sell the stock a cause for concern.

Despite its market-beating performance in the last year, Nazara Technologies' stock call has been downgraded to 'Sell' by MarketsMOJO. Investors should carefully consider all the factors before making any investment decisions.