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Tuesday, October 3, 2023

China Automotive Systems Inc. (NASDAQ:CAAS) is Gaining Momentum on Earnings Catalyst

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China Automotive Systems Inc. (CAAS) shares are trading at lower $7.43 and the avg recommendation for the stock is Moderate Sell, while the current analyst price target stands at $4.00.

To add more color to this target, the company’s high over the last year is $13.69 and the low is $1.42. Over the last 52 weeks, CAAS is up 111.08% while the S&P 500 is up 17.22%. The catalyst for this interesting swing was the company’s recent earnings report.

A Notable Earnings Report

In the last quarter, CAAS reported a profit of $13.57 million. China Automotive Systems Inc. also saw revenues increase to $114.42 million. In addition, CAAS has free cash flow of $43.86 million as of 09-2020. The company’s EBITDA came in at $5.43 million which compares well with its peers.

CAAS booked profit margins of 0.00%, its Return on Equity (ROE) is 0.00%, and its Return on Assets is 0.00%. All told, it is clear that, CAAS needs to be on your watchlist.

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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. CAAS has a short ratio of 0.01 and outstanding shares of 31.11M.

Company Outlook

CAAS has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 24.56 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at 0.00. China Automotive Systems Inc. CAAS also noted assets of $667.42 million at the end of the last quarter. Investors should also keep an eye on sector updates as CAAS has historically followed its peers on positive news.

All told, China Automotive Systems Inc. CAAS has strung together solid data and demonstrated underlying fundamentals. At its current valuation, CAAS represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.

China Automotive Systems Inc. CAAS is now commanding a market cap of 249.43M and a float of 11.55M. CAAS is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of CAAS stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in CAAS, either long or short, and we have not been compensated for this article.

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