Vuzix Corp (NASDAQ: VUZI) has enjoyed an uplift in share price after the company announced the upcoming launch of its third generation Vuzix Blade 2 Smart Glasses.
The glasses are an augmented reality (AR) workforce solution designed to meet the needs of connected workers. The new smart glasses will be sold for $1299.99 and will be available for purchase on the company's website in September for shipment within the US, EU, UK, Canada and Japan.
Paul Travers, President and Chief Executive Officer at Vuzix, commented:
"Vuzix Blade 2 smart glasses are now optimized for enterprise use across a broader number of use cases. They deliver a versatile hands-free wearable computing solution that's critical in today's diverse work environments, including head tracking, a touchpad and full voice control.
“Workers can easily access see-what-I-see virtual assist and collaboration software, real-time data, work instructions, mixed reality, HD photography and video streaming. There is no other AR form factor today that delivers on power, functionality and style like Vuzix Blade 2."
But is Vuzix stock worth investing in?
What is Vuzix Corp?
Vuzix Corporation, together with its subsidiaries, designs, manufactures, markets and sells AR wearable display and computing devices for consumer and enterprise markets in North America, the Asia-Pacific, Europe and internationally.
The company was formerly known as Icuiti Corporation and changed its name to Vuzix Corporation in September 2007. Vuzix Corporation was incorporated in 1997 and is headquartered in West Henrietta, New York.
How Does Vuzix Corp Make Money?
Vuzix provides M300XL, M400, and M4000 series of smart glasses for enterprise, industrial, commercial, and medical markets. The business makes Vuzix Blade smart glasses, waveguide optics and related coupling optics, and Vuzix Shield smart glasses, as well as custom and engineering solutions.
The company sells its products through resellers, direct to commercial customers, and via online stores, as well as various Vuzix operated web stores in Europe and Japan.
VUZI Stock Financials
The company’s most recent earnings, which covered the quarter ended 30 June 2022, showed a small increase in revenue from $2.92m to $3.01m as the business acknowledged that it had faced macro challenges during the period.
Cost of sales of $2.58m and operating costs of $10.43m meant that the company still booked a net loss of $10.02m for the period, up from $9.25m in the same months back in 2021.
As of June 30, 2022, the Company maintained cash and cash equivalents of $100.6m and an overall working capital position of $109.1m.
VUZI stock has fallen in value by 12.22% across the year to date, coming to sit at $7.82 at the time of writing. The last 12 months have seen the stock hit a high of $16.20 and a low of $3.88.
VUZI Growth Potential
Presently, the business is primarily active in the healthcare and enterprise markets, with customers including Medtronic (NYSE: MDT) and Clorox Co (NYSE: CLX). Citing data from MarketsandMarkets.com, the business reasons that these arenas offer significant growth opportunities.
It estimates a combined CAGR of 73% between 2021 and 2026, with the addressable market size rising to $16.2bn.
Additionally, the company is positive about the impact that innovations such as the metaverse could have on its fortunes. The birth of the metaverse would significantly increase demand for wearable AR and VR tech and, as an early leader in the market, VUZI could be well-placed to capitalize.
VUZI Investment Risks
While the company has considerable cash reserves, it is worth noting that VUZI is losing a significant amount of money each quarter in its current state. Unless the business is able to turn its potential into more significant revenues and break into profitability, it may struggle to continue operations in the long term.
Additionally, the business may have to raise money, potentially by diluting shareholders’ holding with further public offerings.
Much of the company’s fate seems to rest on the take-off of the smart glasses market, which may not occur for some time or at all. Alphabet (NASDAQ: GOOGL) notably failed in this arena with its Google Glass product, which consumers simply weren’t interested in on the scale that the company had anticipated.
Wearable technology has found success in the form of the smart watch, but we’ll have to wait and see whether smart glasses follow suit.
Is VUZI Stock a Good Investment?
VUZI stock looks like an exciting business with a product which could be a forerunner to widely used tech of the future. This potentially puts the business in a very strong position, but there's a risk that smart glasses may never become as popular as Vuzix expects.
The company has grown beyond the status of a penny stock, though its price remains at a level where investors can expect to see some volatility. Additionally, the company is still losing a significant amount of money each quarter and has seen revenue growth slow.
As such, VUZI stock would be a speculative investment for backers who believe that wearable technology such as smart glasses will be heading more to the mainstream. If you’re investing in VUZI stock, you’re investing in the company’s potential.
Out of four analysts’ ratings covered by the Wall Street Journal, the consensus rating for the stock is Overweight, with three analysts offering a Buy rating and one giving a Hold rating. The average price target across the analysts sits at $12.00 per share, significantly higher than the $7.82 it sits on at the time of writing.