Applied Digital: 5 Reasons For Why It Is Time To Sell (Archive)

This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.

Elevator Pitch

• As a small stock in the high-growth business of data centers, Applied Digital is supposed to be growing fast. But it is posting a lackluster performance on revenues and margins.
• I think management's plan to separate the Cloud Services business may be a questionable move that may exacerbate growth challenges.
• APLD's customer concentration metrics are getting much riskier, and there are indications that it may have lost at least 1 customer in the last quarter.
• The stock trades at a high premium valuation, which is hard to justify given weak fundamentals and bearish technicals vs SPX500.
• Potential upside exists if APLD secures a hyperscale customer for its Ellendale data center, but this is starting to appear less and less likely to occur.

Read the full article here.