Is There any End in Sight for the Titomic Share Price Slide?

Is There any End in Sight for the Titomic Share Price Slide?

Forget about the effects of COVID-19 for a minute, the share price microcap Titomic Ltd [ASX:TTT] has been on the slide downwards since April 2019.

Year-on-year, TTT shares have lost 55%.

Investor reactions to news from TTT have been volatile to say the least.

Which makes it even more difficult to say where the share price could be heading coming into the next calendar year.

But with the broader ASX materials sector on the rise, there is some upside potential for TTT.

ASX TTT Share Price Chart 1

Source: Tradingview

Take a look at the graph above.

That’s the materials sector (white) versus the ASX 200 (red).

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So, what could this mean for TTT?

Let’s take at look.

Who is Titomic Ltd?

Titomic Ltd is an Australian company.

It manufactures for industries needing lighter and stronger materials made from titanium.

It also helps industries produce corrosion resistance surfaces, ballistics protection and even improve surface friction.

The way Titomic achieves this is through technology it calls ‘Titomic Kinetic Fusion’.

This process involves metal powders moving at ‘supersonics speeds to create industrial scale parts and complex surface coating’.

Titomic uses titanium as its main metal for this fusion process.

The Titomic Kinetic Fusion process was developed by Titomic and CSIRO. The company has exclusive rights to this process.

Titomic’s target segments include aerospace and space.

This covers space manufacturing, tool moulds, special coating…

It also includes defence, consumer, mining, oil and gas.

Under these segments, Titomic can work with pipelines, valves and pumps. As well as sporting goods, bicycles and soldier systems for defence.

One of the benefits of Titomic is its ability to produce low cost products into the market at great speed. All while using less resources to do so.

Where is the Titomic share price heading?

As you can see in the graph below, the outlook for TTT shares isn’t looking too great.

Titomic Share Price Chart 2

Source: Tradingview

In their full-year results, TTT flagged a net loss of $10.8 million.

Up 45% from the previous year.

Not a great result.

But there is a silver lining.

Despite the loss, TTT grew its revenue by 36% to ~$2 million.

Now, remember TTT is a start-up.

Meaning you shouldn’t expect huge profits, especially since it only listed on the ASX in October 2017.

So the strong revenue growth hints at a potential upside, particularly as the economy begins to recover from COVID-19.

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Lachlann Tierney

For The Daily Reckoning Australia