RC365 Holdings (LSE: RCGH) shares went through the roof in June.
At the time of writing, the price stands at 125p. But it’s been so wild, it could be anywhere by the time anyone reads this.
Millionaire?
After floating at 6.2p in March 2022, RC365 shares price dipped as low as 0.1p at one point.
Anyone who plonked down just £800 at that low point could be sitting on a cool million now. Or maybe they’d have two million if it’s soared further since I looked. Or perhaps nothing if it’s crashed and burned.
I’ve even seen claims that RC365 shares should reach 1,000p, or more. If that happens, I’d need to invest £125,000 today to bag my million.
I don’t have that much lying around, and I doubt my wife would let me sell the house. But is this a great opportunity to invest a sum that I can afford?
Two sides
I’ve been looking around online forums, which have been a bit lively. And investors have brought up two key themes.
One is that it’s all a scam. After all, that 1,000p forecast I mentioned came from a story headlined ‘Missing The AI Run? This London Stock Could Jump 500%‘.
And ‘Missed Nvidia? This London AI stock could jump over 1,000%‘ was another one.
People have also asked how it can be a scam if the company is an honest one? Well, it’s not usually the company behind such things. So yes, it still can be.
At RC365, the hype seems to be about an AI deal. But it’s just a non-binding thing with Hong Kong-listed Hatcher Group, about maybe building an app.
What to do
So how do we tell if there’s a real growth stock opportunity here?
One way is to look at fundamental measures. But RC365 hasn’t made a profit yet, so there’s no price-to-earnings (P/E) ratio to work from. And its price-to-sales ratio (PSR) is up around 90 or so, which makes my eyes water.
RC365 might have a promising future. It’s just secured an agreement with Mastercard in Hong Kong, for example. And that looks like a good opportunity.
The firm has also bagged a new Mastercard prepaid card agreement in Malaysia. And extending its payments business across the Asia region has to be a good thing.
Results
We can also take a look at a company’s latest results and outlook.
Revenue more than doubled in the year to 31 March 2023, which is impressive. But the annual loss widened by 38%.
The report said: “The Board continues to be optimistic about the outlook for FY24 given the Group’s growing pipeline of potential opportunities for further growth.“
But there are no actual numbers, so we can’t quantify that optimism right now.
Top growth buy?
I do think RC365 could offer some good growth opportunities. I just don’t see gains from the current high share price.
Maybe I’m wrong. But when a stock is hyped up as much as this, and I don’t see a good reason for it, I keep well away. I don’t think I’ll be making a million here!
