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Tuesday, October 27, 2020

Is Now the Time to Invest in Rite Aid Corporation (NYSE:RAD)?

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Rite Aid Corporation (RAD) shares are trading at lower $9.81 and the avg recommendation for the stock is Hold, while the current analyst price target stands at $8.63.

To add more color to this target, the company’s high over the last year is $23.88 and the low is $7.49. Over the last 52 weeks, RAD is up 7.45% while the S&P 500 is up 18.95%. The catalyst for this interesting swing was the company’s recent earnings report.

A Notable Earnings Report

In the last quarter, RAD reported a profit of $1.16 billion. Rite Aid Corporation also saw revenues increase to $5.98 billion. In addition, RAD has free cash flow of -$539.68 million as of 08-2020. The company’s EBITDA came in at $131.32 million which compares well with its peers.

RAD booked profit margins of -1.50%, its Return on Equity (ROE) is -48.20%, and its Return on Assets is -3.60%. All told, it is clear that, RAD needs to be on your watchlist.

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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. RAD has a short ratio of 4.18 and outstanding shares of 53.57M.

Company Outlook

RAD has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 3.75 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at -7.06. Rite Aid Corporation RAD also noted assets of $9.62 billion at the end of the last quarter. Investors should also keep an eye on sector updates as RAD has historically followed its peers on positive news.

All told, Rite Aid Corporation RAD has strung together solid data and demonstrated underlying fundamentals. At its current valuation, RAD represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.

Rite Aid Corporation RAD is now commanding a market cap of 553.09M and a float of 53.49M. RAD is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of RAD stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in RAD, either long or short, and we have not been compensated for this article.

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