Avacta stock prediction: AVCT bounces off from its support level

• Avacata stock price prediction:  The AVCT share price has bounced off its major support and is looking to break through its resistance levels.
• The firm has reported revenue growth of 228%, what its key performance indicators are saying
• AVCT’s share price is looking to surpass its 50 EMA as the MACD has given a bullish signal.

About Avacta Group

Avacta Group, founded in 2003, is a publicly listed company on the London Stock Exchange (LSE). It is involved in the business of Affimer diagnostic products, and along with that, it also manufactures new Affimer medicines and licenses them to large pharma companies. The company is known to operate through Life Sciences and Animal Health segments. The company is headquartered in Leeds, UK, and the firm’s CEO is Alastair M smith.

Key financial highlights of the 2022 Annual Report.

• The Avacta group has posted a revenue of GBX 9.65M with a growth of 228% Year on year (YoY)
• Including depreciation in the Cost of goods sold (COGS), the gross profit of last year came to GBX 4.23M
• The company is loss-making in the operations, as the operating income came up as -GBX 25.5M. Although the figure is negative, the company has reduced its operations expenses by 12% as per the last year.
• Net income for the last year is reported to be -GBX 39.5M
• The gross margins for the firm as per the last year is: 43.8%
• The operating margin for the firm as of the last year is: -264%
• The net margin for the firm as per the last year is: -409%
• As the net profit is negative, the return on equity by the firm is -132.5%
• The company is very high on debt as the Debt to equity ratio for the firm as per the last year is: 3.41, which means that the company has 3.4 times more debt than its equity (capital+reserves)
• The price to sales ratio (p/s), which is calculated by dividing total sales occurred by the current market price, is 30.4, which means that the price of AVCT share is 30 times more than the current sales it is generating every year

The financial data is based on the firm’s last annual report.

Avacta share price previous price actions

AVCT’s share price, after falling to GBX 38 in March 2022, saw a strong bullish momentum and rose to GBX 144 in April 2022.

After consolidating for more than 265 days, between the floor and caps of GBX 95 and GBX 137, respectively, the AVCT share price broke its resistance on the new year’s arrival of 2023. from there, the stock rose to GBX GBX 188, the last high made; since then, the stock has seen a bearish momentum.

 

Avacta share price current price actions

Currently, the AVCT share price bounced back, came over major support, and is at the level of GBX 103. The price swings between some supports and resistances, while the indicators also give some insights for the near future.

 Support: The First and immediate support level can be seen where the price just bounced off, GBX 95. This zone has been tested a lot of times in the past and hence has a good amount of volume to cushion the bulls

The 2nd support is being made at GBX 76.9, if we go back to January 2022, this zone has some volumes.

Resistance: The first and immediate resistance is seen at a level of GBX 123, a good volume zone in the past. The second resistance is made at the price value of GBX 137

Indicators:

MACD: The MACD graph is below the neutral line. Although the signal line has crossed the MACD line and is currently below it, which indicates a bullish momentum shortly

RSI: The Relative strength index (RSI) rose after touching the level of 30 points where the stock was oversold. Currently, it is one at its neutral territory of 50.3. which indicates a sideways market.

EMAs: After a surge in the price in Feb 2023, the 50 EMA has just crossed the 200 EMA during May 2023. In recent times it is seen above the price, which is a signal of a bearish sentiment in the market. The levels are: 50 EMA at GBX 104.8 and 200 EMA at GBX 115.4

Are Avacta stocks worth buying?

As the company is currently losing on operations, making the way to fundamentals would be through its revenue growth which has been decent over the last few years. Although there was no such floating of bad news or weak financials when the price started dropping in February, it is assumed that it was just the market sentiment. Let’s answer the above question for two people in the stock markets.

The investor’s perspective: The medium to long-term investors may consider buying at the current dips as the stock is fundamentally strong.

The Trader’s perspective: The stock has just seen a bounce back from its strong support level of GBX 95. which has resulted in the MACD giving a bullish indication.

The risk-averse traders can consider buying if the price rises and sustains the levels of 50 EMA, as it can support the bulls to break the current resistance level. 

Conclusion:

Avacta Group is a 2003 founded company listed on the London stock exchange; the firm deals in the business of Affimer diagnostic products, and along with that, it also manufactures new Affimer medicines and licenses them to large pharma companies. The company is unit economics positive and made a revenue growth of 228% as per its last annual report. The AVCT share price has seen a bearish sentiment since February 2023. The Investors are advised to buy in the dips, and the traders are advised to see the price movement with its 50 EMA.

Technicals:

Support: GBX 95.0, GBX 76.9

Resistance: GBX 123.0, GBX 137.4

 RSI: 52 

50 EMA: GBX 104.8

200 EMA: GBX 115.4

Disclaimer

The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.