WIMI

We rate WiMi Hologram Cloud Inc. (WIMI) as Avoid with a composite score of 29.2/100 at a current price of $1.73. The stock falls in the bottom quintile of our universe across key quantitative factors, and the multi-factor weakness suggests a high probability of continued underperformance.

The rating is primarily driven by strength in quality (39th percentile) and investment (27th percentile), which together account for the majority of the composite score. Offsetting weakness in stability (10th percentile) and momentum (21th percentile) tempers our overall conviction. We assign a No Moat rating (37/100), High uncertainty, and Exemplary capital allocation.

Key items to watch: momentum to confirm whether the current price trend has legs; valuation compression risk if growth disappoints. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

WiMi Hologram Cloud Inc. holds a top-quartile position (#0 of 50) within the Services sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 29.2/100 places it at rank #4576 in our full 7,333-stock universe. At N/A in market capitalization, WiMi Hologram Cloud Inc. is a small-cap player in the Services space, which limits certain scale advantages but may allow for more agile strategic execution.

Revenue contraction of -10% combined with momentum at the 21th percentile paints a cautious picture of the near-term business outlook. The market appears to be pricing in continued challenges, and a catalyst for reversal is not clearly visible from current data.

The margin cascade tells an important story: gross margins of 28% (-31.2pp vs sector) narrow to operating margins of -5% (-8.9pp vs sector) and net margins of 19.1%, yielding a gross-to-net conversion rate of 67%. This efficient conversion suggests well-controlled operating costs and limited margin leakage between the gross and net levels.

At a current price of $1.73, WiMi Hologram Cloud Inc. is trading at a premium to fundamental value. Our value factor score of 25/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. The premium valuation implies the market is pricing in significant future growth or quality improvements that are not yet fully reflected in current fundamentals.

The stock currently trades at a P/E of 12.5x (a 47% discount to the sector median of 23.7x), P/B of 0.2x, P/S of 0.1x. The below-sector P/E suggests possible undervaluation or the market pricing in near-term headwinds.

We assign a High uncertainty rating to WiMi Hologram Cloud Inc.. Key risk factors include elevated market sensitivity (beta of 5.70), below-average price stability (10th percentile). The wide range of potential outcomes widens our fair value estimate and increases the possibility of permanent capital impairment. Investors considering this name should size positions accordingly and demand a meaningful margin of safety before initiating.

Specific risk factors that inform our assessment include: elevated market sensitivity (beta of 5.70); below-average price stability (10th percentile). Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 10th percentile and quality factor at the 39th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: conservative leverage (12% D/E) limits balance sheet risk. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile warrants caution and disciplined position management.

We rate WiMi Hologram Cloud Inc.'s capital allocation as Exemplary. Management demonstrates a strong track record of balancing reinvestment with shareholder returns, evidenced by returns on equity of 41.4%, disciplined leverage (12% D/E), best-in-class net margins of 19.1%. Exemplary allocators typically generate returns on equity above 20% while maintaining debt-to-equity below 50% — WiMi Hologram Cloud Inc. meets this high bar.

The balance sheet remains conservatively managed, providing financial flexibility for opportunistic investments while maintaining a margin of safety for shareholders. We note that the combination of 19.2% return on assets and controlled leverage suggests management is deploying capital at rates well above the cost of capital — the hallmark of exemplary stewardship.

In summary, WiMi Hologram Cloud Inc. receives a Avoid rating with a composite score of 29.2/100 (rank #4576 of 7,333). Our quantitative framework assigns a No Moat (37/100, trend: stable), High uncertainty, and Exemplary capital allocation. The average factor score across quality, value, momentum, stability, and investment is 24/100.

Our analysis does not support a constructive view on WiMi Hologram Cloud Inc. at this time. The combination of limited competitive advantages, high uncertainty, and exemplary capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.