Why the Audio Pixels Holdings Ltd share price is rocketing today

The Audio Pixels Holdings Ltd (ASX: AKP) share price lifted 14% to $17.60 today after the self-proclaimed manufacturer of next-generation audio speakers announced it’s making progress in getting the speakers manufactured to a commercial standard.

Despite having nothing in the way of sales revenues currently, Audio Pixels has a market value greater than $440 million thanks to investor excitement over the potential of its tiny speakers that can reportedly produce superior sound quality to today’s conventional home entertainment or commercial speakers.

The stock is up 250% over the past five years as claims over the potential of the sometimes micro-chip sized speakers to revolutionise sounds systems continue, however, so far the company has been long on promise and short on delivery.

For the year ended December 31 2016 Audio Pixels clocked up a net loss of $5 million, with little news as to any concrete agreements it has to sell its digital speaker technology, if it’s able to develop it as it expects.

Although, Audi Pixels reportedly has some big potential, given its valuation, financials, and track record you can count me out as a buyer of its shares.

Especially because there are plenty of fast-growing junior tech companies on the ASX already posting big profits with strong outlooks.

One to consider is online voice services business MNF Group Ltd (ASX: MNF), which actually trades on a market value around 25% cheaper than Audio Pixels despite it boasting half-year revenues of $91 million and a full year forecast for EBITDA in the region of $22+ million.

This goes to show how share prices can often present investors different risk-adjusted opportunities, although that’s not to say that Audio Pixels won’t go onto be a success.

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Motley Fool contributor Tom Richardson owns shares of MNF Group Limited.

You can find Tom on Twitter @tommyr345

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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