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Saturday, June 25, 2022

ADDvantage Technologies Group, Inc. (AEY) Stock on a Rise, Here’s the Reason

 ADDvantage Technologies Group, Inc. (AEY), a company that distributes and services electronics and hardware for the telecommunications industry, has gained an increase of 1.74% in the premarket trading session. Consequently, AEY stock is trading at $1.75 at the time of the writing. On Thursday, AEY closed the day at $1.72 after increasing by 2.38% during regular trading hours. The consistent increase could be attributed to the expansion in line of credit.

Why AEY Rising?

On Thursday, AEY announced that it had signed amendments to its credit facilities. The company took this step for its Teleco and Wireless Business Segments. The company has signed an accounts receivable factoring line with Vast Bank, N.A, as a result of which the company would increase the available borrowing capacity from $4 million to $13 million. The borrowing is subject to the available collateral.

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Q3 2021 Operational Results

On 12th August, AEY released the operational results for the third quarter of the fiscal year 2021. The quarter ended on 30th June 2021. The company generated net sales of $17.01 million during the quarter against $12.02 million for the same period of 2020. The gross profit for the three months was $4.26 million against $4.17 million for the same period of 2020. The net loss suffered by the company during the period stood at $2.12 million against the net income of $23,000 for the same period of 2020.

Executive Commentary

Joe Hart, Chief Executive Officer of AEY, while commenting on the results said that the company has generated much higher revenue during the quarter. The ongoing chip and electronics supply chain issues for new technology have driven higher demand for refurbished alternatives, which ultimately have proven to be beneficial for the company. The company is hoping for improved margins and momentum heading into the new fiscal year.

Future Outlook for AEY

The last three months have seen AEY stock decline by more than 27%. The decline is due to the impact the COVID pandemic has had on businesses around the globe, especially the ones related to the electronics sector. But looking ahead, analysts are hopeful that the stock can attract potential investors in the future to come.

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