NEW YORK, April 21, 2021 /PRNewswire/ -- Argus Research, an
independent investment research firm, has launched Equity Research
Report coverage on CooTek, Inc. (NYSE: CTK)
Click Here to view full Argus Equity Research Report
COMPANY HIGHLIGHTS: (as conveyed by Argus Analyst
Steve Silver) include:
CTK: A developer of user-focused and technology-driven mobile
internet content
- In our view, CooTek has developed a robust ecosystem for
delivering mobile internet content that can generate substantial
advertising revenue. Using its AI and big data capabilities, the
company has built new online literature and gaming platforms over
the past two years.
- In 2020, CooTek invested to expand its user base, and
significantly increased both daily and monthly active members. We
expect customer acquisition costs to moderate going forward, which
should position CooTek to achieve profitability for the full-year
in 2022.
- As of December 31, 2020, CooTek's
cash, cash equivalents and restricted cash were $49.6 million, down from $60.0 million a year earlier. The company also
has access to up to $20 million in
capital through an institutional equity purchase agreement. As
such, we believe that it has sufficient capital to execute its
business plan.
- CTK ADSs rose briefly above $7 in
early 2021, but then fell back to their previous 52- week low amid
weakness in small-cap technology stocks. CTK also remains well
below its 2018 IPO price of $12. We
attribute this weakness in part to a soft advertising market and
slightly slower user growth in the second half of 2020.
- We believe that CTK's current market cap of approximately
$125 million, or just 0.3-times 2020
revenue, does not adequately reflect the company's success in
building its content ecosystem, or its prospects for long-term
revenue growth and near-term profitability. Based on our forward
P/E analysis, we see a fair value estimate for CTK of $9 per ADS, well above current levels.
INVESTMENT THESIS excerpts (Click
Here to view full Argus Equity Research Report):
- CooTek is a fast-growing internet company that offers a
portfolio of content-rich mobile applications supported by big data
analytics. The company leverages the insights gained from its users
to deliver targeted advertisements through these applications. Most
of its advertising revenue comes from the Chinese market.
- The company has gained user insights from its legacy TouchPal
Smart Input mobile app, an adaptive, multilingual tool that helps
users to communicate more efficiently by offering next-word
prediction, mistyping correction, and auto spelling correction on
mobile devices, among other features. The app uses big data
analytics to improve its language model continually, and provides
users with a customized experience over time. The app, which was
launched initially in 2010, has more than 125 million daily and 163
million monthly active users in more than 200 countries.
- In our view, CooTek is well positioned to maintain a strong
market presence by developing its data-driven technology. More than
half of the company's employees are software engineers and product
designers. The company also has an active IP strategy, with a
growing number of patents, trademarks, copyrights and website
domains, both in and outside China.
About Argus Research Corp. Headquartered in NYC,
Argus Research (www.argusresearch.com) is a leading independent
equity research firm (est. 1934) ̶ providing
fundamental and quantitative research coverage on more than 1,600
companies across all 11 sectors of the S&P 500, as well as
macroeconomic and equity market forecasts, thematic research, model
portfolios and pre-IPO research. In addition, Argus has recently
committed to providing a sponsored research solution for small
& mid-cap companies seeking coverage. Our Institutional Asset
Management, Bank Trust, Sell-side Advisor and Self-Directed
Investor clients value Argus's proprietary equity research
methodology, analysis and commentary. Argus's Equity
Research/earnings estimates are available on major research /
earnings estimate aggregator platforms, including Bloomberg,
Thomson Reuters, Factset and S&P Global.
Argus Research Co. has received a flat fee from the company
discussed in this report as part of a Sponsored Research agreement
between Argus and the company. No part of Argus Research's
compensation is directly or indirectly related to the content of
this assessment or to other opinions expressed in this report.
Please refer to the full Argus report and the disclaimer for
complete disclosures.
For more Information please contact:
Darrell Stone
646-747-5438
dstone@argusresearch.com
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