Huami Corporation (HMI) Next Support Is Here

Wall Street’s most bullish Huami Corporation (NYSE:HMI) analysts are predicting the share price to blow past $21 per share during the next 12 months. The current median share price forecast by them is $18.9, suggesting that the stock could increase 92.66% in that time frame. The average price target of $18.38 calls for a nearly 87.36% increase in the stock price.

Wells Fargo Emerging Markets Equity Fd revealed as top hedge fund owner in Huami Corporation (HMI) with a stake of over 1.25M HMI shares as of March 30, with a market value of approx. $16.41M as of today. The second largest holder, Goldman Sachs Emerging Markets Equity Fund, with 606360 shares which equates to $5.67M worth of the stock. At third is JNL Series Trust-JNL/Oppenheimer Emerging Markets Innovator Fund, which stood pat with 64000 shares, a 0.12% position in Huami Corporation, worth $684800. The insider holding in stood at 9.04% while institutions hold 50.4%.

Huami Corporation (NYSE:HMI) rose 0.51% in recent trade and currently has a stock-market value of $585.56M. The shares finished at $9.81, after trading as low as $9.65 earlier in the session. It hit an intraday high Wednesday at $10.13. Trading activity significantly weakened as the volume at ready counter decreased to 206,882 shares versus 675,965 in average daily trading volume over the past 20 days. So far this year, the volume has averaged about 327,284 shares. The stock is now 13.81% above against its bear-market low of $8.62 on October 11, 2018. It has retreated -100.41% since it’s 52-week high of $19.66 reached in March. Now the market price is up 3.15% on the year and down -0.2% YTD.

HMI stock’s 50 day simple moving average (SMA 50) price is $12.73 and its 200-day simple moving average (SMA 200) price is $11.36. The company’s stock currently has a total float of 9.9M shares. Its weekly volatility is hovering around 5.02% and felt 4.99% volatility in price over a month. On the upside, the share price will test short term resistance at around $10.08. On a downside, the stock is likely to find some support, which begins at $9.6. The failure to get near-term support could push it to $9.38.

When looking at valuations, Huami Corporation (HMI) has a pricey P/E of 35.42x as compared to industry average of 24.68x. Moreover, it trades for 6 times the next 12 months of expected earnings. Also, it is trading at rather expensive levels at just over 2.18x price/book and 1.1x price/sales. Compared to others, Huami Corporation is in a different league with regards to profitability, having net margins of 3.1%. To put some perspective around this, the industry’s average net margin is 6.26%. HMI’s ROE is 7.2%, which is also considerably worse than the industry’s ROE of 8.6%. It’s also very liquid in the near term, with a current ratio of 2.1. The stock has a debt/capital of 0.02.

HMI last reported earnings that exceeded expectations. The company raked in $2.3 per share, -74.44% change on the same period last year. That was better than consensus for $2.11. Revenue for the recent quarter stood at $1.22 billion, up 63% on last year and above the $1.14 billion predicted by analysts. For this quarter, Wall Street analysts forecast revenue in a range of $1.03 billion to $1.08 billion, which should be compared with $0 generated last year. EPS is seen in a range of $1.38 to $1.38, against the 0 reported a year ago.