This is a classic short covering rally. Their revenue growth is modest, especially when compared to estimates.
- This qtr revenue is 164 vs 159 est
- Next qtr revenue should be 171 vs 164 est
They did a solid job of controlling costs, which is why the nice earnings beat. But with modest growth, the current PPS would have you believe that invisible braces were made of gold.
The forward PE has fallen to 11 due to the price plunge this morning. SCSS is not a drug company with a failed study. It is a brick and mortar business with real earnings.
SCSS is a screaming buy under $20.
Sentiment: Strong Buy
Well, when investors don't like a stock....SCSS revenue miss is 10% and their forecast EPS is also a 10% miss. The stock should get punished. But more than 20% ?? PE is attractive at news levels this morning.
Not the I can remember. Oh, ok there was one time within the last year that it went. But down in AH after earnings is its recent MO.
The extent of the AH move is irrational. They are still making money, albeit less. Prior to today, PE was 18.9 and forward PE was 14. Both of these will drop further. But the AH plunge is excessive. A 15-20% drop is more appropriate and that is a huge drop.
Shorts have to be disappointed and concerned. There has not been a spike or dead cat bounce. Both are usually signs that a reversal downward is near.
Instead, the price has been flat to steady upward. Not the kind of action that supports the shorts arguments.
Wow, glad I got out. I didn't expect a secondary that low. There had to be insider trading here. Why else would this have dropped so close to the secondary today, if someone didn't know the secondary price a few days ago when this started to plunge.
Go away ambulance chaser
AND if it doesn't close at the low of the day...?
Without a doubt there was heavy selling pressure once ARIA broke 5.5. Bid/Ask spread was heavy on the ASK side from 5.4 down to 5.34. That is when it started to stabilize and turn in favor of BIDs. Selling pressure is still apparent, but it looks like many buyers have their bids in too.
I had to bail. Sold at 3.33 for a nice profit. But I was expected a much better recovery. When it struggled to stay above 3.30, I had a bad feeling and just took my small profit. Not sure why this has not recovered more. It wouldn't surprise me to see it on the volume gainer list next week. But I won't take that chance.
Today's shellacking has dropped the forward PE to under 15. I think shorts were screaming that LRN was over priced at $30-35 share. They were right. # of shorts was 4.8M. That is the entire trading volume for today. Even though it looks over done, shorts are still in control here.
That is a good way to put it, "don't bet rent money, but it is worth a shot". The initial price makes it look like $4 may be the dilution price, but it did fall throughout the day past 3.50. But with a low float, low volume stock, all price moves are slightly exaggerated, which is why $4 is a good bet.