What happened
Shares of smart-glasses company Vuzix (VUZI +2.79%) were up 13.8% today as of market close. The company announced it will be showing off some of its new augmented-reality technology this week at the Field Service Palm Springs 2022 conference. The event is attended by large companies targeting customer care and service solutions.
Vuzix also announced today it will be providing an update on its first-quarter 2022 earnings on May 10.
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So what
It's been rough going for shareholders of Vuzix. The stock is down more than 80% from its all-time high in spring 2021. As of late, shares have been under pressure along with other technology stocks thanks to the Federal Reserve. The Fed is on pace to aggressively increase its benchmark interest rate this year in an effort to help bring down inflation. Higher interest rates lower the present value of stocks.
Now what
Despite its horrendous decline in the last year, Vuzix remains a high-risk but high-reward bet on the development of augmented reality (AR) -- especially in business applications for the "metaverse." For example, just last week, Vuzix said medical tech outfit Medacta ordered more smart glasses for its shoulder replacement surgery system. Vuzix is also now available on Zoom Video Communications' App Marketplace. Other uses for AR hardware include manufacturing and field service where users can receive instructions and on-the-job training via a heads-up-display on Vuzix's smart glasses.
Management had previously said to expects "significant year-over-year revenue growth in 2022" as customer purchasing activity begins to normalize in the wake of the pandemic. Vuzix also approved an up to $25 million share repurchase plan through March 2023 (worth nearly 7% of Vuzix's current market cap). That is at least a vote of confidence from the board of directors in the company's long-term potential.
However, Vuzix still operates in the red (negative-$40 million operating income last year), although it did have almost $129 million in cash and short-term investments on hand at the end of 2021. Expect this to be a highly volatile stock until the company proves it can attain growth at a profitable scale.
