Ameri Holdings (OTCQB:AMRH) shares plunged sharply after wider than expected losses in the previous quarter – 74% in the last three months to be more precise.
The company generated a net loss of $4.6 million in the third quarter of 2017, significantly higher compared to a loss of $1.8 million in the year-ago period. The loss expanded to $9.6 million in the first nine months of FY2017 from $4.1 million in the previous year period.
Investors Are Ignoring The Growth potential
Early stage companies like Ameri Holdings often make losses due to higher spending on operational research related activities. The company’s operating expenses grew to 6.5 million in the past nine months; leading the company to post higher than expected losses.
However, investors have been ignoring Ameri’s growth potential – which is crucial for early-stage companies.
Its revenue increased by 24% year over year to $12.53 million in the past quarter. Moreover, the gross profit as a percentage of revenue surged to 20% from 17% in the same period last year.
“We are excited with new growth opportunities that are emerging in SAP cloud and digital areas. By streamlining our sales and delivery teams, we have built a platform for revenue growth which was our focus area during the quarter,” said Giri Devanur, the Company’s President, and Chief Executive Officer.
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The Stock Soars 30 % today, but Why?
The company’s stock rebounded more than 30% today after AMERI Holdings announced that it had secured a competitive win in applying SAP big data analytics solutions with Maiden RE.
The company was also chosen as a major partner with key global restaurant group for SAP SuccessFactors HCM Module.
Ameri stock is trading attractive valuations. Its stock trades around 0.65 times to sales and 2.9 times to book value, compared to the industry average of 2.39 times and 67.30 times, respectively. Overall, the company has been working on strategies to support revenue growth in expanding its market share into the new markets.
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