Mohawk Group continues to rise on unique business model
Updated
Having a chance to review the 12/16 investor presentation, I wanted to update this analysis a bit.
Mohawk was founded on the idea that if you created a new consumer products company today, you'd heavily using Artificial Intelligence to provide more relevant products to a targeted set of consumers and optimize the process from concept to production to delivery.
Mohawk has a proprietary software platform called AIMEE that consumes massive amounts of data to analyze trends, consumer sentiment and brand performance. Based on the knowledge, AIMEE helps Mohawk determine which products to produce, market and sell at the right times when consumers are most likely to buy. That keeps inventories from getting unnecessarily high and reduces unsold product.
Mohawk also offers AIMEE as a Software-as-a-Service platform in the cloud. That makes the tools available to other consumer product companies to also optimize their own business.
The growth strategy for Mohawk has been to acquire consumer product brands from companies, or the entire company and then use their proprietary software AIMEE to improve the efficiency and effectiveness of the brand.
Most recently, Mohawk acquired the Mueller, Pursteam, Pohl and Schmitt, and Spiralizer brands and will apply the same AI technology to further optimize these already popular brands.
Fundamentals
Technical
I do have a starter position in Mohawk from the consolidation in December. Right now it is currently too extended to offer a buy point now. I'll be looking to add more when the time comes. Put this on the watch list and look for an entry leading into the new year.
Mohawk was founded on the idea that if you created a new consumer products company today, you'd heavily using Artificial Intelligence to provide more relevant products to a targeted set of consumers and optimize the process from concept to production to delivery.
Mohawk has a proprietary software platform called AIMEE that consumes massive amounts of data to analyze trends, consumer sentiment and brand performance. Based on the knowledge, AIMEE helps Mohawk determine which products to produce, market and sell at the right times when consumers are most likely to buy. That keeps inventories from getting unnecessarily high and reduces unsold product.
Mohawk also offers AIMEE as a Software-as-a-Service platform in the cloud. That makes the tools available to other consumer product companies to also optimize their own business.
The growth strategy for Mohawk has been to acquire consumer product brands from companies, or the entire company and then use their proprietary software AIMEE to improve the efficiency and effectiveness of the brand.
Most recently, Mohawk acquired the Mueller, Pursteam, Pohl and Schmitt, and Spiralizer brands and will apply the same AI technology to further optimize these already popular brands.
Fundamentals
- YoY sales growth last three quarters +44%, +97%, +45%.
- As part of 12/1 acquisition announce, future revenue outlook raised.
- EPS for last three quarters -0.99, -0.19, -0.05
- Not much institutional sponsorship now
Technical
- Up >800% from March lows
- Up 163% since acquisition announcement
- Blew past the IPO high on 12/17
- Volume now shrinking as price consolidates under $10
I do have a starter position in Mohawk from the consolidation in December. Right now it is currently too extended to offer a buy point now. I'll be looking to add more when the time comes. Put this on the watch list and look for an entry leading into the new year.
Note
Mohawk Group Holdings, Inc. (MWK) acquired the assets of Healing Solutions, LLC, an online seller of essential oils. As consideration, Mohawk paid approximately $15.3 million in cash and issued approximately 1.4 million shares of common stock. The company will issue approximately 170,000 shares of common stock as consideration related to inventory being acquired. The company also agreed to issue to Healing Solutions and certain consultants up to a maximum of approximately 736,912 shares within the next 15 months.For 2021, Mohawk now expects net revenue to be in the range of $340 million to $370 million, up from prior guidance of $290 million to $320 million, reflecting the addition of the Healing Solutions business. Adjusted EBITDA estimate for the full year is a range of $28 million to $32 million.
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