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RR vs. Microvast: Which Small-Cap Tech Stock Should You Bet On?
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Key Takeaways
RR's shift to a RaaS model cut revenues but lifted gross margin to 74.4% in fiscal Q3.
RR's rising losses stemmed from a sharp jump in general and administrative expenses.
MVST posted record Q3 revenue and margin gains, supported by higher sales volumes.
Both Microvast Holdings, Inc. (MVST - Free Report) and Richtech Robotics Inc. (RR - Free Report) are small-cap tech stocks operating in high-growth domains. While MVST offers battery technologies for electric vehicles (EVs) and energy storage solutions, Richtech Robotics provides robotic solutions for automation in the U.S. service industry.
Let us analyze further to find out which of these two stocks is a better investment opportunity.
The Case for RichTech Robotics
RR’s third-quarter fiscal 2025 revenues highlighted a shift in its business model. During that quarter, it generated $1.2 million in its top line, down 18.4% from the year-ago fiscal quarter. This detriment was primarily due to the company’s pivot to a Robotics-as-a-Service (RaaS) model, positioning it to gain in the long run by leveraging recurring revenues, banking on multi-year service agreements rather than one-time product sales. Despite the setback in the top line, RichTech Robotics held a 74.4% gross margin, up 420 basis points (bps) from the year-ago quarter, highlighting prudent cost discipline.
Richtech Robotics’ product, including ADAM and Titan 440, amplifies its ability to capture a larger share of the global RaaS market, which is anticipated to witness a CAGR of 17.1% through 2034 (Per Precedence Research). RR’s $86 million cash reserve is strengthened by no current debt, providing the company with ample privilege to invest in product development, strengthening its competitive moat.
Despite such optimism, it is not a stroll in the park as net loss during the third quarter of fiscal 2025 widened to $4.1 million from the year-ago fiscal quarter’s $1.3 million. This deterioration was mainly due to a dramatic rise in general and administrative expenses by 254.7% year over year. This damaging performance, combined with RichTech’s small scale, amplifies risks. RR’s nascent market penetration attracts competition from scaled companies, including Deere & Company and Rockwell Automation. An elevated competitive pressure could prompt the company to seek funding, diluting shareholders' interests. It could potentially create an imbalance in the company’s ability to manage profitability and growth.
The Case for Microvast
MVST achieved a record third-quarter 2025 revenues of $123.3 million, up 21.6% year over year, driven by higher sales volumes in Asia and Europe, combined with a favorable product mix, impressing upon high-performance batteries. This growth highlights MVST’s ability to capitalize on swift EV adoption, leading to an elevated demand for batteries. The company registered a gross margin expansion of 440 bps year over year through operational execution, higher margin end markets, and increasing utilization and cost controls.
It is also impressive how the company managed to keep its adjusted EBITDA at $21.9 million, with a year-to-date figure of $76.3 million, hinting at scalable operations. The Huzhou Phase 3.2 expansion, which is expected to add close to 2 GWh of annual production capacity, will address the soaring customer demand, improving scalability. Banking on this expansion plan, management’s optimism is reflected in the expectations of revenue growth of 18-25% and gross margin of 32-35% for the full year of 2025.
Despite the backdrop of optimism, challenges persist. Amidst these increasing revenues and expanding margins, MVST registered a net loss of $1.5 million during the third quarter of 2025. This detriment was primarily caused by changes in warrant/loan valuation amounting to $12.6 million despite an adjusted net profit of $11.9 million. Furthermore, operating expenses increased by 23.7% year over year, particularly due to a 66.1% surge in general and administrative expenses.
The EV battery market puts ample competitive pressure on Microvast. The company essentially competes with giants like General Motors and Toyota that are making internal investments towards EV battery manufacturing. Such rivalry strips away MVST’s pricing power and demands relentless research and development, which appears incoherent when the primary goals of the company are to attain profitability.
How Do Estimates & Valuation Compare for RR & MVST?
The Zacks Consensus Estimate for Richtech Robotics’ fiscal 2025 sales is pegged at $5 million, suggesting a 18.2% year-over-year surge. For fiscal 2025, the consensus estimate for loss per share is pinned at 15 cents compared with a loss of 12 cents per share in the year-ago quarter. There has been no change in analyst estimates or revisions lately.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Microvast’s 2025 sales is pinned at $462.3 million, implying a 21.7% year-over-year upsurge. For 2025, the consensus mark for EPS is pegged at 17 cents compared with a loss of 27 cents per share reported in the year-ago quarter. One EPS estimate for 2025 has moved south in the past 60 days with no northward revision.
Image Source: Zacks Investment Research
In terms of valuation, Microvast is trading at a forward price-to-sales multiple of 2.05, which is below its 12-month median of 2.4. Richtech Robotics' forward price-to-sales multiple is 37.58, lower than its median of 44.42.
Image Source: Zacks Investment Research
Verdict
Despite Richtech Robotics’ substantially higher valuation than Microvast, its premium is a result of its inherent scalability and potential for a higher margin in its RaaS model. RR’s ability to forego profitability for a better business model draws in recurring revenues. MVST, notwithstanding its margin expansion and scalability strategies, is struggling to stay ahead in the fiercely competitive EV battery market.
We consider Richtech Robotics to be a better bet for investors. RR is well-positioned for long-term growth and an enduring competitive edge. This trajectory is achievable from its recurring revenue model, strong gross margin, and high solvency profile. The company can capitalize on these metrics to gain a competitive advantage over MVST’s aim of scalability in a highly competitive domain.
RR carries a Zacks Rank #3 (Hold), while MVST has a Zacks Rank #4 (Sell) at present.
Image: Bigstock
RR vs. Microvast: Which Small-Cap Tech Stock Should You Bet On?
Key Takeaways
Both Microvast Holdings, Inc. (MVST - Free Report) and Richtech Robotics Inc. (RR - Free Report) are small-cap tech stocks operating in high-growth domains. While MVST offers battery technologies for electric vehicles (EVs) and energy storage solutions, Richtech Robotics provides robotic solutions for automation in the U.S. service industry.
Let us analyze further to find out which of these two stocks is a better investment opportunity.
The Case for RichTech Robotics
RR’s third-quarter fiscal 2025 revenues highlighted a shift in its business model. During that quarter, it generated $1.2 million in its top line, down 18.4% from the year-ago fiscal quarter. This detriment was primarily due to the company’s pivot to a Robotics-as-a-Service (RaaS) model, positioning it to gain in the long run by leveraging recurring revenues, banking on multi-year service agreements rather than one-time product sales. Despite the setback in the top line, RichTech Robotics held a 74.4% gross margin, up 420 basis points (bps) from the year-ago quarter, highlighting prudent cost discipline.
Richtech Robotics’ product, including ADAM and Titan 440, amplifies its ability to capture a larger share of the global RaaS market, which is anticipated to witness a CAGR of 17.1% through 2034 (Per Precedence Research). RR’s $86 million cash reserve is strengthened by no current debt, providing the company with ample privilege to invest in product development, strengthening its competitive moat.
Despite such optimism, it is not a stroll in the park as net loss during the third quarter of fiscal 2025 widened to $4.1 million from the year-ago fiscal quarter’s $1.3 million. This deterioration was mainly due to a dramatic rise in general and administrative expenses by 254.7% year over year. This damaging performance, combined with RichTech’s small scale, amplifies risks. RR’s nascent market penetration attracts competition from scaled companies, including Deere & Company and Rockwell Automation. An elevated competitive pressure could prompt the company to seek funding, diluting shareholders' interests. It could potentially create an imbalance in the company’s ability to manage profitability and growth.
The Case for Microvast
MVST achieved a record third-quarter 2025 revenues of $123.3 million, up 21.6% year over year, driven by higher sales volumes in Asia and Europe, combined with a favorable product mix, impressing upon high-performance batteries. This growth highlights MVST’s ability to capitalize on swift EV adoption, leading to an elevated demand for batteries. The company registered a gross margin expansion of 440 bps year over year through operational execution, higher margin end markets, and increasing utilization and cost controls.
It is also impressive how the company managed to keep its adjusted EBITDA at $21.9 million, with a year-to-date figure of $76.3 million, hinting at scalable operations. The Huzhou Phase 3.2 expansion, which is expected to add close to 2 GWh of annual production capacity, will address the soaring customer demand, improving scalability. Banking on this expansion plan, management’s optimism is reflected in the expectations of revenue growth of 18-25% and gross margin of 32-35% for the full year of 2025.
Despite the backdrop of optimism, challenges persist. Amidst these increasing revenues and expanding margins, MVST registered a net loss of $1.5 million during the third quarter of 2025. This detriment was primarily caused by changes in warrant/loan valuation amounting to $12.6 million despite an adjusted net profit of $11.9 million. Furthermore, operating expenses increased by 23.7% year over year, particularly due to a 66.1% surge in general and administrative expenses.
The EV battery market puts ample competitive pressure on Microvast. The company essentially competes with giants like General Motors and Toyota that are making internal investments towards EV battery manufacturing. Such rivalry strips away MVST’s pricing power and demands relentless research and development, which appears incoherent when the primary goals of the company are to attain profitability.
How Do Estimates & Valuation Compare for RR & MVST?
The Zacks Consensus Estimate for Richtech Robotics’ fiscal 2025 sales is pegged at $5 million, suggesting a 18.2% year-over-year surge. For fiscal 2025, the consensus estimate for loss per share is pinned at 15 cents compared with a loss of 12 cents per share in the year-ago quarter. There has been no change in analyst estimates or revisions lately.
The Zacks Consensus Estimate for Microvast’s 2025 sales is pinned at $462.3 million, implying a 21.7% year-over-year upsurge. For 2025, the consensus mark for EPS is pegged at 17 cents compared with a loss of 27 cents per share reported in the year-ago quarter. One EPS estimate for 2025 has moved south in the past 60 days with no northward revision.
In terms of valuation, Microvast is trading at a forward price-to-sales multiple of 2.05, which is below its 12-month median of 2.4. Richtech Robotics' forward price-to-sales multiple is 37.58, lower than its median of 44.42.
Verdict
Despite Richtech Robotics’ substantially higher valuation than Microvast, its premium is a result of its inherent scalability and potential for a higher margin in its RaaS model. RR’s ability to forego profitability for a better business model draws in recurring revenues. MVST, notwithstanding its margin expansion and scalability strategies, is struggling to stay ahead in the fiercely competitive EV battery market.
We consider Richtech Robotics to be a better bet for investors. RR is well-positioned for long-term growth and an enduring competitive edge. This trajectory is achievable from its recurring revenue model, strong gross margin, and high solvency profile. The company can capitalize on these metrics to gain a competitive advantage over MVST’s aim of scalability in a highly competitive domain.
RR carries a Zacks Rank #3 (Hold), while MVST has a Zacks Rank #4 (Sell) at present.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.