Vinco Ventures (NASDAQ:BBIG) stock, sitting around $1 per share, has been flirting with danger of being delisted from the Nasdaq. This has not happened yet as the BBIG stock has a 52-week range of $1.20 to $8.49, but I am predicting that this scenario is very likely soon.
Here are some of the top reasons why I am bearish toward BBIG stock.
BBIG Stock Has Too Many Fundamental Flaws
My prior articles on Vinco Venture’s stock were always very bearish. One of the key reasons for this bearishness is that the company has poor fundamentals and its business strategy lacks clarity.
A few months later and the financial situation for BBIG has not changed much. In fact, things have gotten worse. Do not be fooled by its Q1 2022 financial results, where “[r]evenue increased 349.7% from the first quarter of 2021 to $11.5 million.” While that sounds impressive, when conducting financial analysis there are other aspects investors need to consider.
If you check the annual sales growth for Vinco Ventures things look bad. In fact, according to MarketWatch data, the firm’s growth is declining.
In 2019, 2020 and 2021, its sales growth was -24.11%, -4.05% and -18.52%, respectively. Turning to a quarterly basis, Vinco Ventures reported positive sales growth of 3.16% for the quarter ending on Dec. 31, 2021, and large growth of 400.99% for the quarter ending on Mar. 31, 2022.
Put all of these considerations together and it’s clear that investors should not get excited about BBIG stock yet.
Do Not Ignore the Red Flags
In Q1 2022, the firm reported a widening net loss of $379,105,147 versus a net loss of $62,263,320 a year ago. Gross profit declined to 5.2% year-over-year versus 35.5%. Furthermore, selling, general and administrative expenses increased to $26,798,107 versus $11,660,880 for the same quarter a year ago.
Furthermore, shareholders have been substantially diluted in the past year, with total shares outstanding growing by 458.2%. Likewise, the company has a negative shareholder’s equity, a deficit of $41,028,777.
With all of that in mind, investors should run from BBIG stock without thinking twice.
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On the date of publication, Stavros Georgiadis, CFA did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.