PRGX Global Inc (NASDAQ:PRGX) delivered some serious profits over the past month, but the situation on the market is changing once again. Traders aren’t willing to pay more than $5.40 for the audit company stock.The latest financial results were OK, but not great. Despite the revenue growth, the company is investing in its future business, taking into account increased expenses and cutting off the profits.
Technically, the stock price is at a turning point, but with the insignificant recent volume the 200-day MA could actually hold. RSI is the troubling indicator in this case, as its moving down from the overbought position coincides with the price decrease – usually a very strong signal for trend reversal.[BANNER]
It’s quite difficult to say where the stock should trade due to the fundamental distortion in the last reported quarter. Revenue growth of 10% was decent and the slip into red in the bottom line is supposedly temporary.
The current P/S of 0.7 against the industry’s 1.67 in fact suggests possible further appreciation. Yet, the current market cap is 12 times the net tangible value of the company. Such mixed indicators and the recent lack of direction on the market points to short-term consolidation as one of the many possible outcomes of the current situation.
