Liquidmetal Technologies Inc (OTCMKTS: LQMT) rise from the dead is gaining momentum on the confirmation of progress in the execution of business strategy. The microcap has had to contend with wild price swings after a solid start to the year that saw the stock rally by more than 50%.
Liquidmetal Technologies Inc Price Analysis
However, the stock did succumb to short selling pressure resulting in a plunge below the $0.10 mark. A spike from all-time lows could as well signal that the stock has hit the floor and likely to register fresh gains as short sellers continue to exit positions.
Fuelling the upward momentum is a somewhat solid financial report for the first three months of the year. The stock has since bounced back to the $0.11 mark waiting to see if the upward momentum has what it takes to catapult the stock above the $0.12 resistance level.
Liquidmetal Technologies needs to rally and stabilize above the $0.12 technical level to stand a chance of bottoming out from current lows. Above the critical resistance level, the stock could make a run for this year highs at $0.18.
However, failure to take out the $0.12 resistance level, could result in the stock plunging further in continuation of a bear trend that began mid last year.
What Does Liquidmetal Technologies Inc Do?
Liquidmetal Technologies is a material technology and manufacturing company. The firm designs, develops, manufactures and sells products, as well as parts, from bulk amorphous alloys in various industries. The Company is also engaged in the distribution of components for non-consumer electronic devices.
Why is Liquidmetal Technologies Inc Surging?
Shares of Liquidmetal Technologies have started flying high on the delivery of impressive Q1 earnings that underscore growth on the execution of the Company’s business strategy. Revenues in the quarter totaled $223,000 helped by the completion of the initial production part runs at the AMM platform.
The Company also benefited from the fulfillment of additional tolling orders in the MIM platform. For the full year ended December 31, 2018, Liquidmetal revenues totaled $532,000.
Cost of goods sold in the quarter increased to $179,000 from $81,000 in reported in the first quarter of last year. The increase was mostly attributed to higher product part deliveries as well as recurring orders and lower material costs.
“While we continue to make progress in executing our business strategy to develop high volume applications, the pace remains slow and below our financial targets. As a result, we have deemed it prudent to undertake a comprehensive review of strategic options, with the goal of maximizing the current and long-term value of the Company,” stated Dr. Bruce Bromage, Chief Operating Officer.
Research and development expenses in the quarter shrunk to $1.4 million in the quarter from $1.6 million as of the same quarter last year. Liquidmetal Technologies attributes the decline to lower costs associated with employee compensation.
Research and development expenses dropped to $489,000 from $610,000 as of last year, attributed to a shift to customer support activities. Cash and restricted cash as of the end of the quarter tanked to $44.9 million compared to $35.2 million as of December 31, 2018.
A solid first quarter builds on the progress achieved in 2018, especially on the validation of Liquidmetal multi-cavity production mold for amorphous and metal injection molding operations. The Company has since received its first amorphous production tooling order, for higher volume medical device application.
Liquidmetal building power upgrade is nearing completion that should enable expansion of the manufacturing footprint.
“We are also working with our customer to develop the next generation of this application, demonstrating their commitment to our technology and to Liquidmetal as a trusted supplier. We are focused on bringing more applications into our production pipeline,” stated Mr. Bromage.
What Next For Liquidmetal Technologies Inc
While Liquidmetal has started showing signs of bottoming out, it is still languishing at all-time lows, having succumbed to short selling pressure. Revenue growth could as well provide early signs of what investors can expect when it comes to operational efficiency going forward.
As it stands, Liquidmetal might have hit the floor and due for a correction higher as a bounce-back play. For early movers it might be wise to wait for further confirmation, in the form of the stock rallying and stabilizing above the $0.12 mark, to consider it a long-term investment play. Above the $0.12 mark and the sloping downward trend line is broken.
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Disclosure: We have no position in LQMT and have not been compensated for this article.