CNI Research Receives 'Sell' Rating from MarketsMOJO, Concerns Over Fundamental Strength and Debt-Servicing Ability

CNI Research, a microcap IT software company, has recently received a 'Sell' rating from MarketsMOJO on October 7th, 2024. This downgrade is based on the company's weak long-term fundamental strength, with an average Return on Equity (ROE) of only 3.86%. Additionally, the company has shown poor long-term growth, with net sales growing at an annual rate of 21.21% and operating profit at 10.53% over the last 5 years.
One of the main concerns for CNI Research is its ability to service its debt, as indicated by a low EBIT to Interest (avg) ratio of 0.07. Furthermore, the stock is currently trading at a very expensive valuation, with a price to book value of 10.1. However, it is currently trading at a discount compared to its average historical valuations.

Despite generating a return of 515.49% in the past year, the company's profits have only risen by 89%, resulting in a PEG ratio of 0.8. On a positive note, CNI Research has shown strong results in June 2024, with net sales growing at 101.79% and a higher PAT of Rs 0.49 cr.

Technically, the stock is currently in a mildly bullish range, with multiple factors such as MACD, Bollinger Band, and KST indicating a bullish trend. The majority of shareholders are non-institutional, and the company has a track record of market-beating performance in both the long-term and near-term. In fact, CNI Research has outperformed BSE 500 in the last 3 years, 1 year, and 3 months.

Overall, while CNI Research may have some concerns in terms of its fundamental strength and debt-servicing ability, it has shown positive results and a strong track record of market-beating performance. Investors should carefully consider these factors before making any investment decisions.