Global Mofy AI Ltd (NASDAQ: GMM)

Sector: Technology Industry: Information Technology Services CIK: 0001913749
Market Cap 24.17 Mn
P/B 0.39
P/E -1.25
P/S 0.43
ROIC (Qtr) 0.00
Div Yield % 0.00
Rev 1y % (Qtr) 0.00
Total Debt (Qtr) 3.67 Mn
Debt/Equity (Qtr) 0.06
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About

Global Mofy Metaverse Ltd, known by its stock symbol GMM, operates in the technology development and services industry. Incorporated in the Cayman Islands in September 2021, the company's primary operations are based in China, carried out through its subsidiaries. Global Mofy Metaverse Ltd serves as a holding company, with no significant assets or operations, and its business is mainly conducted through its subsidiaries. The company's main business activities encompass technology development, consulting, exchange, transfer, and promotion, as well...

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Investment thesis

Bull case

  • Strong operating cash flow of 22.11M provides robust 6.03x coverage of total debt 3.67M, indicating excellent debt servicing capability and financial flexibility.
  • Operating cash flow of 22.11M provides exceptional 113.23x coverage of interest expenses 195265, showing strong debt service capability.
  • Robust free cash flow of 22.10M exceeds capital expenditure of 13579 by 1627.25x, indicating strong organic growth funding capability.
  • Strong tangible asset base of 18.30M provides 4.99x coverage of total debt 3.67M, indicating robust asset backing and low credit risk.
  • Strong operating cash flow of 22.11M provides 1.91x coverage of SG&A expenses 11.56M, showing efficient operational cost management.

Bear case

  • Operating cash flow of 22.11M barely covers its investment activities of (33.43M), with a coverage ratio of -0.66, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (33.43M) provide weak support for R&D spending of 7.95M, which is -4.21x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 4.17M provide limited coverage of acquisition spending of (38821), which is -107.49x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • The company's operating cash flow of 22.11M shows concerning coverage of stock compensation expenses of 8.52M, with a 2.59 ratio indicating potential earnings quality issues.
  • Operating earnings of (18.44M) show weak coverage of depreciation charges of 12.26M, with a -1.50 ratio indicating high capital intensity and potential reinvestment needs.

Product and Service Breakdown of Revenue (2023)

Peer comparison

Companies in the Information Technology Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 IBM International Business Machines Corp 229.77 Bn 29.79 2.98 66.57 Bn
2 ACN Accenture plc 136.96 Bn 17.99 1.94 8.20 Bn
3 INFY Infosys Ltd 61.29 Bn 19.41 3.18 0.68 Bn
4 CTSH Cognizant Technology Solutions Corp 31.81 Bn 14.26 1.51 1.15 Bn
5 FIS Fidelity National Information Services, Inc. 28.54 Bn -1.17 2.90 13.00 Bn
6 WIT Wipro Ltd 23.98 Bn 16.25 2.37 2.35 Bn
7 LDOS Leidos Holdings, Inc. 20.68 Bn 14.28 1.20 5.24 Bn
8 BR Broadridge Financial Solutions, Inc. 20.38 Bn 19.09 2.84 3.17 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.30 1.23
EV to Cash from Ops. EV/CFO 1.07 3.12
EV to Debt EV to Debt 6.47 3.45
EV to EBIT EV/EBIT -1.29 -4.05
EV to EBITDA EV/EBITDA 1.55 3.57
EV to Free Cash Flow [EV/FCF] EV/FCF 1.07 -2.69
EV to Market Cap EV to Market Cap 0.98 1.54
EV to Revenue EV/Rev 0.42 47.25
Price to Book Value [P/B] P/B 0.39 3.04
Price to Earnings [P/E] P/E -1.25 4.15
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -0.59
Dividend Payout Ratio % Dividend Payout Ratio % 0.00 14.14
Dividend per Basic Share Div per Share (Qtr) 0.00 0.47
FCF Dividend Payout Ratio % FCF Dividend Payout Ratio % 0.00 4.61
Interest Coverage Interest Coverage -94.46 -318.37
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex Growth (1y) % -144.58 -256.13
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -62.30 128.67
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 6.73
EBIAT Growth (1y) % EBIAT Growth (1y) % -255.03 -36.77
EBITDA Growth (1y) % EBITDA Growth (1y) % 21.74 -22.62
EBIT Growth (1y) % EBIT Growth (1y) % -239.94 -87.06
EBT Growth (1y) % EBT Growth (1y) % -243.55 75.53
EPS Growth (1y) % EPS Growth (1y) % -118.68 122.99
FCF Growth (1y) % FCF Growth (1y) % 22.06 -8,761.26
Gross Profit Growth (1y) % Gross Profit Growth (1y) % 8.20 -4.36
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Utilization Ratio 0.72 0.79
Cash Payout Ratio Cash Payout Ratio 0.00 0.00
Cash Ratio Cash Ratio (Qtr) 0.27 0.73
Current Ratio Curr Ratio (Qtr) 1.10 2.20
Debt to Equity Ratio Debt/Equity (Qtr) 0.06 0.98
Interest Cover Ratio Interest Cover Ratio -94.46 -318.37
Times Interest Earned Times Interest Earned -94.46 -318.37
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % -11.10 -369.53
EBIT Margin % EBIT Margin % -32.97 -585.52
EBT Margin % EBT Margin % -33.32 -637.04
Gross Margin % Gross Margin % 40.20 24.60
Net Profit Margin % Net Profit Margin % -34.50 -639.67