Gaxos.Ai Inc. (NASDAQ: GXAI)

Sector: Communication Services Industry: Electronic Gaming & Multimedia CIK: 0001895618
Market Cap 13.75 Mn
P/B 0.98
P/E -3.64
P/S 19.80
ROIC (Qtr) -31.52
Div Yield % 0.00
Rev 1y % (Qtr) 18,327.18
Total Debt (Qtr) 0.00
Debt/Equity (Qtr) 0.00
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About

Gaxos.ai Inc., commonly referred to as GXAI, is a technology-based company operating in the gaming and health and wellness industries. The company is dedicated to optimizing user experience through the use of artificial intelligence (AI). Gaxos.ai operates in two main segments: Gaxos Gaming and Gaxos Health. Gaxos Gaming is the company's flagship product, which offers a unique gaming platform that combines conventional games with unconventional game mechanisms. The platform allows gamers and developers to utilize AI to create and design in-game...

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Investment thesis

Bull case

  • Tangible assets of 13.52M provide exceptional 501.64x coverage of deferred revenue 26957, showing strong service capability backing.
  • Operating cash flow of (3.89M) fully covers other non-current liabilities (26957) by 144.26x, showing strong long-term stability.
  • Short-term investments of 12.27M provide solid 51.47x coverage of other current liabilities 238362, indicating strong liquidity.
  • Tangible assets of 13.52M provide robust 56.73x coverage of other current liabilities 238362, indicating strong asset backing.
  • Cash reserves of 914183 provide robust 2.02x coverage of current liabilities 451871, indicating strong short-term solvency.

Bear case

  • Operating cash flow of (3.89M) barely covers its investment activities of (11.14M), with a coverage ratio of 0.35, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (11.14M) provide weak support for R&D spending of 1.05M, which is -10.61x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of (3.89M) provides insufficient coverage of deferred revenue obligations of 26957, which is -144.26x, raising concerns about future service delivery capabilities.
  • Short-term investments of 12.27M significantly exceed cash reserves of 914183, which is 13.42x, indicating potentially excessive yield-seeking behavior at the expense of liquidity.
  • The company's operating cash flow of (3.89M) shows concerning coverage of stock compensation expenses of 132123, with a -29.43 ratio indicating potential earnings quality issues.

Peer comparison

Companies in the Electronic Gaming & Multimedia
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 NTES NetEase, Inc. 76.19 Bn 15.89 4.76 0.91 Bn
2 EA Electronic Arts Inc. 50.25 Bn 73.90 6.88 1.89 Bn
3 RBLX Roblox Corp 43.57 Bn -40.91 8.91 1.64 Bn
4 TTWO Take Two Interactive Software Inc 34.06 Bn -8.59 5.19 3.51 Bn
5 PLTK Playtika Holding Corp. 1.22 Bn 14.21 0.45 2.54 Bn
6 SOHU Sohu.com Ltd 0.46 Bn 1.16 0.78 0.00 Bn
7 GRVY GRAVITY Co., Ltd. 0.45 Bn 8.02 1.09 0.00 Bn
8 DDI DoubleDown Interactive Co., Ltd. 0.43 Bn 4.17 1.19 0.04 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.84 0.73
EV to Cash from Ops. EV/CFO -3.09 9.02
EV to Debt EV to Debt 0.00 42.93
EV to EBIT EV/EBIT -3.19 5.14
EV to EBITDA EV/EBITDA -2.72 -0.17
EV to Free Cash Flow [EV/FCF] EV/FCF -2.69 2.00
EV to Market Cap EV to Market Cap 0.87 0.31
EV to Revenue EV/Rev 17.32 -278.61
Price to Book Value [P/B] P/B 0.98 5.21
Price to Earnings [P/E] P/E -3.64 5.61
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 1,143.22
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 15.62
Dividend per Basic Share Div per Share (Qtr) 0.00 0.31
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 21.95
Interest Coverage Interest Coverage 0.00 2.42
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -186.16 -144.92
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -82.51 2,047.52
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 2.39
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -11.47 10.58
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -23.21 -40.36
EBIT Growth (1y) % EBIT 1y % (Qtr) -11.47 28.44
EBT Growth (1y) % EBT 1y % (Qtr) -11.47 -25.09
EPS Growth (1y) % EPS 1y % (Qtr) 86.73 -25.14
FCF Growth (1y) % FCF 1y % (Qtr) -32.05 -203.71
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 23,205.74 977.78
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.05 0.61
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.03
Cash Ratio Cash Ratio (Qtr) 2.02 1.98
Current Ratio Curr Ratio (Qtr) 29.70 4.93
Debt to Equity Ratio Debt/Equity (Qtr) 0.00 -1.05
Interest Cover Ratio Interest Cover Ratio 0.00 2.42
Times Interest Earned Times Interest Earned 0.00 2.42
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -520.70 9,395.66
EBIT Margin % EBIT Margin % (Qtr) -543.74 10,488.08
EBT Margin % EBT Margin % (Qtr) -543.74 -43,333.75
Gross Margin % Gross Margin % (Qtr) 100.00 57.20
Net Profit Margin % Net Margin % (Qtr) -543.70 -43,332.40