Why Vuzix Stock Soared Today

What happened

Shares of Vuzix (VUZI 23.08%), a smart glasses and augmented reality company, soared today after the company released its second quarter financial results. While the company’s results fell short of Wall Street expectations, Vuzix’s revenue beat analysts’ consensus estimate in the quarter.

The tech stock had jumped 21.8% as of 11:54 a.m. ET.

So what

Vuzix announced a second quarter non-GAAP (adjusted) loss of $0.16 per share, down from a loss of $0.15 in the prior year quarter and the absence of Wall Street’s average estimate of a loss of $0.15 .

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But investors overlooked the company’s results and instead focused their attention on Vuzix sales, which rose 3% year-over-year to $3 million and slightly beat the consensus estimate. analysts of $2.9 million for the quarter.

“Despite the macroeconomic challenges that persisted throughout our second quarter, we were able to achieve both sequential and modest year-over-year product sales growth,” said Vuzix CEO Paul Travers, in a press release.

The company’s research and development spending rose 10% in the quarter to $3 million, in part due to new investments in the company’s Shield smart glasses.

Additionally, Vuzix management said its sales and marketing costs increased 37% in the quarter to $1.9 million “primarily due to increased salary and benefits expenses due to increase in staff”.

Increased spending in these categories likely weighed on the company’s bottom line in the quarter.

Now what

While investors were clearly pleased that Vuzix beat Wall Street revenue expectations in the quarter, investors should keep a close eye on the company’s net losses as well as the company’s rising costs.

Vuzix investors should also be prepared for more volatility. The company’s stock price is up 49% in the past six months, but its stock is still down 27% in the past 12 months.

Chris Neiger has no position in the stocks mentioned. The Motley Fool has no position in the stocks mentioned. The Motley Fool has a disclosure policy.

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