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Investors in Gorilla Technology Group (NASDAQ: GRRR ) had a rough week, as shares fell 39% in Thursday trading. That compared with a 0.1% decline for the broader market, according to data from S&P Global Market Intelligence. In the year By 2023, the number of professionals in the field of video analytics and cyber security will decrease by more than 60%.
This week's decline came as investors digested the fourth-quarter earnings report, which contained weak growth and revenue news.
After its recent IPO, Gorilla Tech is taking an important strategic step to build a more sustainable business. In fact, the company is not known much from its previous iteration. It has a completely new management team, has changed its product focus and is now targeting a new customer base.
The move led to a sharp drop in sales in 2022, with revenue dropping from $42 million to $22 million. "Elements of the transition have been challenging," CEO Jay Chandan said in a press release.
Another result of the change was a net loss of $88 million, down from $9 million a year ago.
The new management team has high hopes for a recovery strategy that focuses on cyber security and global markets as well as high-value products. Gorilla Tech has won several major contracts in these areas, and these achievements will significantly increase its profits in 2023. In fact, management expects sales of $65 million to $75 million.
But investors don't have much concrete evidence to rely on beyond the bright 2023 forecast. Gorilla Tech's new management team continues to build on its reputation with shareholders. As a result, the stock may remain highly volatile until investors see improvement in terms of sales growth, profitability and positive cash flow.
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Demitri Kalageropoulos has no position in the above shares. The Motley Fool has no position in the stocks listed. The Motley Fool has a disclosure policy.