NIIT Downgraded to 'Sell' by MarketsMOJO Due to Poor Long-Term Growth

NIIT, a smallcap IT-education company, has recently been downgraded to a 'Sell' by MarketsMOJO on 2024-07-22. This decision was based on the company's poor long-term growth, with net sales and operating profit declining at an annual rate of -19.64% and -11.90%, respectively, over the last 5 years.
One of the main reasons for this downgrade is the company's risky negative operating profits. In the past year, while the stock has generated a return of 34.88%, its profits have risen by 458.8%. This has resulted in a PEG ratio of 0, indicating that the stock is trading at a risky valuation compared to its historical average.

On a positive note, NIIT has a low debt to equity ratio, which is a good sign for investors. In addition, the company has shown positive results in the quarter ending March 2024, with a 231.0% growth in PAT, 23.80% growth in net sales, and the highest EPS of Rs 0.83.

However, the technical trend for NIIT is currently sideways, indicating no clear price momentum. This trend has deteriorated from mildly bullish on 22-Jul-24 and has generated -0.41% returns since then.

It is also worth noting that NIIT has a high institutional holding of 30%, which means that these investors have better capability and resources to analyze the company's fundamentals compared to most retail investors.

In conclusion, while NIIT may have some positive aspects, the recent downgrade by MarketsMOJO and the company's overall poor long-term growth make it a risky investment option. Investors should carefully consider these factors before making any decisions regarding NIIT's stock.