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Here’s Why Deepverge (DVRG) Shares Plunged 11% on Upbeat FY Result

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Updated 23 Jun 2022

Key points:

  • The Deepverge shares price plunged 11.4% on upbeat FY results.
  • However, investors ignored its positive milestones to focus on its loss.
  • So should you buy Deepverge shares? Read on to find out?.

The Deepverge PLC (LON: DVRG) share price plunged 11.4% despite reporting excellent financial results for 2021. The company’s revenues surged 107% to £9.3 million compared to the £4.5 million recorded in 2020. The company’s order book exceeded £10 million, but it could not deliver some items due to supply chain issues.

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The vertically integrated business in the clinical research, artificial intelligence, medical device, water technologies and life science sectors revealed that its pretax losses fell 98% to £0.017 million from last year’s £0.859 million, with its margins improving to 57% from 41%.

Also read: The Best Undervalued Stocks To Watch In 2022.

However, the company’s operating losses surged 8% to 8% to £2.897 million compared to last year’s £2.718 million, driven primarily by a 91% surge in administrative costs to £8.7 million from 2020’s £4.6 million. Nevertheless, Deepverge ended the year in a robust financial position, having raised £10 million via a share placement and access to a £25 million mezzanine loan facility.

Investors focused on Deepverge’s overall losses ignoring all the positive milestones achieved by the company in the past year and the first half of 2022. As a result, Deepverge shares have fallen 57% in 2022 despite rising demand for its products, including its Skin Trust Club, Labskin services and Modern Water division.

Some of the report’s highlights included the £1.1 million strategic acquisition of Glanaco Engineering to minimise supply chain disruptions by Modern Water. In addition, the division expanded its collaboration agreement with Microsaic Systems via a manufacturing services framework.

Modern Water also partnered with multiple US cities to install its pathogen detection systems within their wastewater systems. Furthermore, the division also deployed its first Microtox®PD Pathogen Detection Systems in UK wastewater systems.

DVRG shares are now trading at new all-time lows, and nobody knows how far the shares could fall. Hence, I wouldn’t buy Deepverge shares at current prices until a strong rebound suggests the downtrend is over.

*This is not investment advice. Always do your due diligence before making investment decisions.

Deepverge share price.

Deepverge share price 23-06-2022
Source: IG

The Deepverge share price plunged 11.39% to trade at 9.525p, falling from Wednesday’s closing price of 10.75p.