The mergers and acquisition company Ilustrato Pictures International Inc. (ILUS) has been making the rounds and has gotten investors’ heads turning. ILUS is a favorite amongst investors that chase high-growth penny stocks. The stock gained 2% amidst the sharp climbs and dips of today.
Enormous ILUS Revenue Boost
One reason as to why ILUS is suddenly caught up in the spotlight is due to its recent quarterly earnings release. The company reports a revenue of $19.7 million, which translates to a climb of a staggering 553%, against the prior quarter. Growth of such staggering proportions is not typically seen within the market. Considering the fact that ILUS share prices have fallen by 45% in the last six months, many in the market believe that the stock is heavily undervalued, which will be corrected in the coming days.
ILUS Price Decline
Despite such remarkable growth figures, the stock price continues to weaken in the market. This understandably leads to the conclusion of a number of red flags that may be inherent, beyond the apparent.
One reason as to the pessimism despite such rapid growth figures are questions about its profitability. The company saw its revenue in 2021 climb from $2.9 million to almost $20 million. Yet during this same period, its profit figure had only grown by a mere $600,000. This points to the extraordinarily high cost of sales and expenses, which casts serious doubt on ILUS’s financial sustainability. Many shareholders are not dazzled by revenue growth of such enormous proportions given these underlying red flags.
ILUS is an extraordinary company in many ways. It not only more than quadrupled its revenue in a single quarter but also doubled its total assets in a single year. Despite this, its price seems to be on a persistent downward spiral. Investors are understandably taking a cautious approach toward the stock.