A recent press release from Meta Materials (NASDAQ:MMAT) provides a good reminder for investors to read company communications carefully. When the functional materials company reported third-quarter earnings, it released a statement summarizing its financial results for the quarter. At first glance, it seems as though the company has made significant progress on multiple fronts, leading investors to question why MMAT stock is down.
However, a closer look reveals that the company presented its results in a way that could mislead less-informed investors.
What’s Happening With MMAT Stock
As of this writing, MMAT stock is down around 5% for the day amid strong volatility. While the company reported $8.3 million in purchase orders that it claims will be reflected in the next quarterly earnings report, there are still two key takeaways that should concern investors. Firstly, Q3 revenue is down from last year, indicating that Meta Materials isn’t making good progress on any front. But more importantly, the company chose to highlight information that hardly matters anymore. Per the statement released:
“In the third quarter of 2023, total revenue was $2.2 million, favorably compared to $2.0 million in the second quarter of 2023. Third quarter results modestly lagged the $2.5 million in the third quarter of 2022.”
Rather than make clear from the start that Q3 revenue is down, Meta Materials kicks off the press release by highlighting that it is up slightly from the previous quarter.
Let’s examine that in context. Yes, it’s true that Meta Materials’ revenue has increased slightly from the previous quarter. However, as this report is for Q3, that barely seems relevant. Investors should be more concerned with the fact that the company’s Q3 revenue is down and that its future remains highly questionable at best.
When things like this happen, it is hard not to be reminded of Meta Materials’ checkered past. MMAT stock has remained relevant due to meme stock speculation that has never translated into growth.
Appointing a new CEO hasn’t helped share prices, and bankruptcy rumors continue to cast dark shadows over the struggling company. Now, this Q3 earnings report has given investors even more incentive to avoid MMAT as it prepares to finish the year deep in the red.
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On the date of publication, Samuel O’Brient 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.
