Cango (NYSE:CANG) Issues Earnings Results

Cango (NYSE:CANG) announced its quarterly earnings data on Monday. The company reported ($1.99) earnings per share for the quarter, missing the consensus estimate of ($0.90) by ($1.09), Zacks reports. The company had revenue of $50.78 million during the quarter, compared to analyst estimates of $60.02 million. Cango had a negative net margin of 107.22% and a negative return on equity of 136.63%.

Here are the key takeaways from Cango’s conference call:

• Revenue fell 50% sequentially to $50.8 million, including $47.4 million from Bitcoin mining, as the company reduced self-mining capacity and shifted some activity to leasing. Bitcoin production declined to 656 coins, and summer power curtailments could affect third-quarter output.
• The company reported an $81.6 million net loss, driven largely by approximately $51 million in non-cash impairment and disposal losses on older mining machines. All-in Bitcoin mining cost was $98,405 per coin, above the $73,313 cash cost excluding depreciation.
• Restructuring reduced cost of revenue excluding depreciation to $50.7 million from $99.6 million in the prior quarter, while the cash mining cost declined 35%. Management said leasing and ongoing contract negotiations should improve the cash-flow profile and reduce variable-cost exposure.
• The AI infrastructure business has moved from build-out to early commercialization after completing the Georgia site, deploying containers and GPUs, and signing its first customer contract. AI revenue is expected to begin in the third quarter, although management cautioned that the initial contribution will be modest.
• The company began using a short-term Bitcoin-denominated hedging program, with approximately $8 million outstanding at quarter-end, to reduce cash-flow sensitivity to Bitcoin prices rather than take speculative directional positions. It held 1,056 Bitcoins, approximately $23 million in cash equivalents and cryptocurrencies, and $31.2 million in long-term debt.

Cango Stock Performance

Shares of NYSE:CANG opened at $1.83 on Wednesday. Cango has a 1 year low of $1.36 and a 1 year high of $21.00. The stock has a market capitalization of $32.52 million, a price-to-earnings ratio of -0.08 and a beta of 1.20. The company has a debt-to-equity ratio of 0.15, a current ratio of 1.00 and a quick ratio of 1.00. The company’s 50 day simple moving average is $1.94 and its 200 day simple moving average is $4.00.

Wall Street Analysts Forecast Growth

A number of research analysts recently commented on the company. Zacks Research upgraded Cango from a “strong sell” rating to a “hold” rating in a research report on Monday, August 3rd. Wall Street Zen raised shares of Cango to a “sell” rating in a research report on Saturday, July 25th. Finally, Weiss Ratings reaffirmed a “sell (d-)” rating on shares of Cango in a research report on Friday, August 21st. One analyst has rated the stock with a Strong Buy rating, one has assigned a Buy rating, one has issued a Hold rating and one has issued a Sell rating to the stock. According to MarketBeat.com, the stock currently has an average rating of “Moderate Buy” and a consensus price target of $30.00.

Institutional Investors Weigh In On Cango

A number of large investors have recently modified their holdings of the business. BNP Paribas Financial Markets increased its stake in shares of Cango by 34.5% in the 3rd quarter. BNP Paribas Financial Markets now owns 15,923 shares of the company’s stock valued at $68,000 after purchasing an additional 4,082 shares during the last quarter. Jump Financial LLC bought a new stake in shares of Cango during the 2nd quarter worth $246,000. CI Investments Inc. boosted its stake in Cango by 206.7% in the fourth quarter. CI Investments Inc. now owns 105,456 shares of the company’s stock valued at $158,000 after buying an additional 71,076 shares in the last quarter. Finally, Marshall Wace LLP acquired a new stake in Cango in the fourth quarter valued at about $1,677,000. Institutional investors and hedge funds own 4.22% of the company’s stock.

About Cango

Cango Inc (“Cango”) is a leading smart automotive transaction service provider in China, headquartered in Shanghai. The company operates an online‐to‐offline platform that integrates vehicle sourcing, financing, distribution and insurance, offering a comprehensive ecosystem for automakers, dealers and consumers. Leveraging big data analytics and cloud computing, Cango connects buyers and sellers through its proprietary digital infrastructure, facilitating transparent and efficient transactions across the automotive value chain.

Cango’s core offerings include auto financing solutions for new and used vehicles, extended consumer loans and wealth management products.