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Rite aid share price2/9/2024 ![]() Markets seemingly vote for further liquidity injections for the U.S. ![]() Now that valuations have reached one of their lowest historical levels in the stock, accompanied by Rite Aid's bottom spot within the industry, it would seem that conditions are becoming ripe for a strategic buyer to come to rescue the old-timer or at least for an activist investor to step in and effect some change. As the company does not generate positive operating income, it heavily relies on taking on more debt to fund operations and a mix of issuing common stock, thus diluting current shareholders.Īt one point or another, creditors will cease giving the company more loans, and further dilutions will only drive the stock price further into a small-cap company. The risk, however, comes from the very source of this cash. However, enterprise value, a figure derived by taking market capitalization, adding total cash balances, and subtracting total debt, turns out to be significantly higher.īecause Rite Aid carries $5.8 billion in debt and only $164 million in cash balances, the company can be reasonably said to be drowning in debt obligations.Ĭonsidering that the current obligations on these longer-term debt maturities are only $6 million per quarter, Rite Aid seems to have enough cash on hand to withstand the payments of these higher debt loads. When investors look deeper into Rite Aid's valuations, the typical market capitalization (computed as the current stock price multiplied by the number of shares outstanding) points to the company is worth $83.5 million roughly. It would be beneficial for investors to understand how and why these potential targets are realistic, and it all comes down to a ticking time bomb. ![]() Rite Aid analyst ratings may be onto something, as they have assigned a consensus price target of $2.75, translating into an 81% upside ceiling from today's prices. Rising by as much as 6.5% during the opening hours of Thursday's trading session, there may be some hints as to whether this stock hopes to return to its former glory. Rite Aid turns out to be the cheaper name within the pharmaceutical retailer's space, and despite posting initial slowdowns in their first quarter 2024 earnings results, the stock is reacting with some optimism.
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