ATER Stock – What Investors Should Know About Aterian Inc.
Aterian Inc (ATER Stock) uses proprietary AI software to identify new products and market opportunities to launch, market, and sell products. The company was formerly known as Mohawk Group Holdings, Inc. It is a technology-enabled consumer products platform that builds, acquires, and partners with electronic commerce (e-commerce) brands using data science. To this end, Aterian provides a proprietary, cloud-based artificial intelligence platform dubbed AIMEE. The platform, uses machine learning, natural language processing, and data analytics to streamline product management across online marketplaces such as Amazon, Shopify, and Walmart.
Aterian sells products in a variety of categories. This includes home and kitchen appliances, health and wellness, beauty, and consumer electronics. The company has thousands of stock-keeping units (SKUs) across 12 owned and operated brands. For example, hOmeLabs. Truweo, Vremi, Xtava, RIF6, Mueller Australia, Pursteam, Pohl and Schmitt, Spiralizer, Healing Solutions, and Aussie Health Co are some of the company’s brands. Truweo is an electronic commerce brand that specializes in health and personal wellness.
More About Aterian Inc. (ATER Stock)
Alterian leverages its proprietary software technology platform, known as AIMEE. Through it, the company is able to identify new products and market opportunities. Then, quickly launch, market, and sell products in the rapidly growing global e-commerce market. AIMEE combines large quantities of data, data science, and other automation algorithms at scale. This enables rapid opportunity identification and automated online sales and marketing of consumer products.
AIMEE gathers information from various e-commerce platforms, the internet, and publicly available data. These inputs are analyzed to estimate and determine trends, performance, and consumer sentiment on products and searches within e-commerce platforms. As a result, the company can use this functionality to help decide which products to market, manufacture through contract manufacturers, and import and sell on e-commerce marketplaces. AIMEE is also linked to various e-commerce platforms via application program interfaces (“APIs”). This enables the company to automate marketing purchases, various parts of fulfillment and logistics operations, and pricing changes on product listings. Alterian generates revenue primarily through online sales of different digital native consumer products. Amazon sales in the U.S. account for a sizable portion of the company’s overall revenue.
ATER Stock: Annual Reports – Financials – SEC Filings
Aterian, Inc. is incorporated in the state of Delaware. Aterian, Inc is primarily in the business of electric housewares & fans. For financial reporting, their fiscal year ends on December 31st. This page includes all SEC registration details and a list of all documents (S-1, Prospectus, Current Reports, 8-K, 10K, Annual Reports) filed by Aterian, Inc.
ATER Stock – Risk Factors
- Share Dilution – Shareholders have been substantially diluted in the past year
- Profitability – Currently unprofitable and not forecast to become profitable over the next 3 years
- Volatility – Volatile share price over the past 3 months
- Insider Selling – Significant insider selling over the past 3 months
Supply Chain Disruptions
The full impact of the COVID-19 pandemic and the supply chain, including preventive and precautionary measures, is still evolving. The COVID-19 pandemic and related global shipping disruption impacted Alterian in 2021. Together, these have resulted in significant increases in supply chain costs. Particularly, for shipping containers, on which Alterian relies to import goods. The reliability and timeliness of such shipping containers have significantly increased last-mile shipping costs on oversized goods. These price increases have been especially severe for oversized goods, which account for a significant portion of the business.
The effects of COVID-19 on the Supply Chain impact assumptions and estimates used in preparing consolidated financial statements. For example, inventory valuation and long-lived asset impairment. As the current situation evolves or new events occur, and additional information is obtained, these assumptions may change. If the economic conditions caused by COVID-19 and Supply Chain deteriorate further than management currently anticipates, such future changes may have a negative impact on the results of operations, financial position, and liquidity.
The reduced reliability and delivery of such shipping containers force the company to spend more on premium shipping to ensure goods are delivered. The lack of reliability and timely delivery has further downstream consequences. For instance, containers take longer to offload and return. Furthermore, due to the global shipping disruption, the company is forced to increase the inventory on hand. Moreover, it requires advance ordering and taking possession of inventory earlier than expected. All of which impact working capital and bottom-line profitability.
Consumer Demand and Inflation
The COVID-19 pandemic continues to cause consumer demand uncertainty. Price increases related to raw materials, imports of goods, including tariffs, and the cost of delivering goods to consumers have led to inflation across the United States. There are noticeable changes in consumer purchasing habits. Ultimately, there may be reduced demand for the company’s products, in conjunction with new quarantines or the threat thereof.
Uncertainty in consumer demand is exacerbated by raising prices for the company’s products. This is in response to increases in raw materials, importing goods, and the cost of delivering goods to consumers. Consumer habits are in a dynamic state of flux resulting from inflation across the United States. There are observable changes in consumer purchasing habits, which may reduce demand for products. Additionally, there are continued changes in governmental restrictions and requirements. These tend to vary from region to region across the majority of the country. Furthermore, in order to offset the increased supply chain costs, the company is forced to raise product prices. Ultimately, this will result in lower demand for goods and products. Forecasting is more difficult due to uncertain demand for products. And, increased prices negatively affect consumer demand in general.
ATER Stock in the News
Third quarter 2022 earnings: Revenues exceed analysts’ expectations while EPS lags behind (November 2022)
Third quarter 2022 results:
- US$1.81 loss per share.
- Revenue: US$66.3m (down 2.6% from 3Q 2021).
- Net loss: US$116.9m (loss widened 5.7% from 3Q 2021).
Revenue surpassed analyst expectations by 5.0%. However, earnings per share (EPS) fell far short of analyst expectations. Revenue is expected to grow 7.6% per year on average over the next three years. This is compared to a 1.3% decline in the Consumer Durables industry in the United States.
Aterian, Inc. has completed a Follow-on Equity Offering in the amount of $20.222 million. (October 2022)
Aterian, Inc. has completed a $20.222 million follow-on equity offering. The consumer goods company stated that the offering of more than 10.5 million shares is expected to generate $20.2 million in proceeds before offering expenses, which will be used as working capital. Each share sold in the offering will come with a $2 warrant to purchase an additional share. The warrants will be exercisable for five years beginning six months after the offering closes. The company’s executives are also buying over 116,000 shares at a combined offering price of $2.10.
After deducting the estimated offering expenses payable by the Company, the net proceeds to the Company from this offering are expected to be approximately $19.9 million. At this time, Aterian intends to use the net proceeds of the offering for working capital. Also, business operations and other general corporate purposes. This could include acquisitions, investments in, or licenses of complementary products, technologies, or businesses.
Security Name: Common Stock Security Type: Common Stock Securities Offered: 10,643,034 Price\Range: $1.9 Security Name: Warrants Security Type: Equity Warrant Securities Offered: 10,643,034 Transaction Features: Registered Direct Offering
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