Vuzix (NASDAQ:VUZI) is well-positioned to capitalize on augmented reality’s growth over the long term. However, its stock has tumbled more than 20% in price over the past six months and is currently trading below its 200-day moving average. Also, given its stretched valuations, is the stock an ideal investment now? Read on, let’s discuss.Augmented reality technology company Vuzix Corporation (VUZI), which is based in West Henrietta, N.Y. designs, manufactures, markets, and sells augmented reality (AR) wearable display and computing devices for consumer and enterprise markets in North America, Asia-Pacific, Europe, and internationally. Over the past six months, VUZI’s shares have slumped 27.1% in price to close yesterday’s trading session at $12.31. The stock is currently trading below its 200-day moving average.
Despite reporting lower-than-expected third-quarter earnings, VUZI’s shares advanced significantly on November 9. The price rise was mainly a result of management’s bullish outlook. The company expects to introduce four new smart glasses products in 2022 and plans to diversify its sales channels to make way for additional new market adoptions globally. Also, VUZI expects to deliver revenue growth sequentially in the current quarter. However, the shares' gains were not sustained as they plunged 10.3% in price in their last trading session.
The augmented reality space has excellent scope for growth and possesses immense opportunities. Still, considering its weak bottom line and low-profit margins, VUZI needs to drive substantial growth to strengthen its position in the industry. Furthermore, its 1.43 beta indicates high volatility.