Step Two Corporation Downgraded to 'Sell' by MarketsMOJO: Weak Fundamentals and Declining Stock Performance

Step Two Corporation, a microcap finance company, has recently been downgraded to a 'Sell' by MarketsMOJO. This decision was based on several factors, including weak long-term fundamental strength and poor growth in operating profit. The company's average Return on Equity (ROE) is only 3.49%, indicating a lack of profitability. Additionally, the stock is currently in a Mildly Bearish range and has seen a decline in technical trend since November 7, 2024, resulting in a -7.89% return.
Other factors contributing to the 'Sell' rating include the company's highest PBDIT(Q) at Rs 2.10 cr, PBT LESS OI(Q) at Rs 2.11 cr, and PAT(Q) at Rs 1.75 cr. However, with a ROE of 23.2, the stock does have a Very Attractive valuation with a 2.3 Price to Book Value. It is also currently trading at a discount compared to its average historical valuations.

Despite the stock's strong performance in the past year, with a return of 51.25%, its profits have only risen by 68%. This results in a PEG ratio of 0.1, indicating that the stock may be overvalued. It is also worth noting that the majority shareholders of Step Two Corporation are the promoters.

In comparison to the market (BSE 500) returns of 30.30%, Step Two Corporation has outperformed with a return of 51.25% in the last year. However, with the recent downgrade to 'Sell' by MarketsMOJO, investors may want to carefully consider their options before investing in this microcap finance company.