Will BBBY stock reach $100 like other meme stocks? This August, BBBY shares have a roller coaster ride of ups and downs within a week! Despite 400% outstanding growth this July, the meme stock faces a drawback when a major investor decides to roll back. Meanwhile, Jake, a university student, reportedly earned roughly $110 million by selling his investment in Bed Bath & Beyond amid turmoil situation.
Here, we will check whether you should play the small gamble or not.
Meme stocks are stock certificates for companies that have gained appeal among casual investors on social media. In the conventional buy-and-hold approach, investors look for stocks whose shares appear pocket-friendly/cheap compared to the company’s fundamental worth or growth prospects.
The value of the underlying company is not what drives the pricing of meme stocks, which are instead closely correlated to the opinions and online talk of day traders (marketing buzz of social media).
According to MarketBeat, the average 12-month Bed, Bath & Beyond stock prices have predicted the price of Bed, Bath & Beyond stock prices is $6.50 per share, representing a decline of more than 71% from the closing on August 17. The volatility of the stock was reflected in the forecasts, which ranged from a low of $2 per share to a high of $23. There were many sell recommendations and a few hold recommendations; no analyst gave the stock a buy rating.
Odeon Capital Group analysts downgraded Bed bath and beyond stock prices in August-mid from hold to sell with a $7.5 price target. The stock was downgraded by analysts at B Riley from neutral to sell, with a $5 share price target.
The Bed bath and beyond stock prices may decline and stabilize over the ensuing years, according to an algorithm-based prognosis made by Wallet Investor on August 30 at the time of writing. According to the site’s projection, Bed, Bath & Beyond shares would cost $13 at year’s end 2022 and trade for about $14.5 by year’s end 2023. The stock might be worth $18.50 by the end of 2025.
Some other market experts predicted that Bed, Bath & Beyond stock prices would average $12 in 2025, down from $13 in 2022 and $16 in 2023. According to Panda Forecast’s stock prediction for 2025, Bed, Bath & Beyond would rise to nearly $35 from $14.060 at the end of this year.
It’s crucial to remember that meme stocks have incredibly high volatility when looking at any Bed, Bath & Beyond stock prices because doing so makes projections more challenging. As a result, forecasts made by experts and algorithm-based forecasters occasionally turn out to be inaccurate.
The surge in meme stocks like GameStop and AMC in January demonstrates how successful the technique can be if enough traders jump into the company, though no one knows how long the short squeeze will persist. The price increase doesn’t alter Bed Bath & Beyond’s fundamentals in any way; therefore, it will eventually come back down, although it might take weeks or even months.
The average price objective for some Wall Street analysts who provided a Bed Bath & Beyond stock projection in the last six months is $7.8, and a low forecast of $1.5.
The average Bed Bath & Beyond stock forecast for 2027 (5 years) is $12.68, with high predictions of $16.5 and low predictions of $10.50.
Since Bed bath and beyond stock prices are dealing with fundamental problems with its business, such as declining liquidity and worry over the looming May 2022, $300 million burning, experts believe that the current valuation is unwarranted and stay neutral.
Analysts believe that Bed bath and beyond stock prices are not a wise investment. In fact, based on two Holds and eleven Sells, they have assigned the stock a Strong Sell rating. The average price target for Bed Bath and Beyond stock prices is $3.84, which suggests a possible loss of 83.4%. Forbes set a target price of $5 (70 % less than the $18 price on August 18).
However, it could be too soon to say goodbye to the Bed Bath & Beyond meme-stock rally. The stock has continued to be quite popular on social media, particularly on Reddit’s most essential stock communities.
Additionally, the business recently received some positive news that ought to boost investor’s confidence. Bed Bath & Beyond has obtained a loan in order to lower its debt and boost its cash reserves. According to a Wall Street Journal story, Bed Bath & Beyond chose its lender after JPMorgan Chase & Co. ran a marketing campaign. Additionally, according to the publication, Bed Bath & Beyond had requested around $375 million.
Read Also | Top Consumer Staples Stocks to Invest In 2022.
Although BBBY stock has been strong, it is currently receiving much media attention and is much out of line with moving averages. That is not a buying opportunity but a sell signal.
According to social media analysts, for August through the 22nd, Bed Bath & Beyond received over 123,000 mentions on Twitter and Reddit, an increase of 1,850% from the same time in July.
It drops by 40% when major investor Cohen sells all of his shares suddenly and disappointing quarter results hit market.
Shares of Bed Bath & Beyond stock prices 60% in tumultuous trading in August-mid to a 5-month high as retail investors continued to drive up the price of the highly shorted stock. The stock rose as investors hurried to cover their short holdings.
In what is referred to as a short squeeze, damaging investors are forced to purchase back shares of an asset at a higher price to reduce losses. As a result, the asset’s price rises even more due to increased demand.
The major justification for retail investors’ bets on Bed Bath & Beyond is the company’s potential for a short squeeze. BBBY or Bed bath and beyond stock prices have been a popular target for extensive short selling because of its poor fundamentals. Its modest 77.28 million share float, or about 40%, is now shorted.
Big stock movements are once again typical; this is known as a meme stock craze. Meme stocks are shares of businesses whose prices are raised by a large group of investors who congregate on websites like Reddit. Bed Bath & Beyond and GameStop have all been meme stocks.
There is no dividend paid by Bed Bath & Beyond.
Two senior VPs in finance recently left the company, which cast doubt on the organization’s leadership. As the home retailer struggled to meet customer expectations and saw a fall in sales, Bed Bath & Beyond’s CEO was fired. According to the company’s Q1 financial report, despite price reductions, sales fell by 25%.
Bed Bath & Beyond is a company based in New Jersey, with retail locations all throughout the United States, and focuses on home furnishings, such as bedding and bathroom items. Inflation and supply-chain problems have hurt the corporation, though, just like they do other retailers.
Bed Bath & Beyond has a history of posting quarterly losses. BBBY fell short of Wall Street forecasts in Q1 2022. The company’s EPS plunged from 5 cents in Q1 2021 to a loss of 2.83 in 2022.
For now, selling is a viable option for the stock; expect to revive with a new credit line. After a strategic development, the meme stock scaled up by 25% on 29th August’2022.
All the information are used for education purpose only. Investing in stocks poses a risk of financial losses. Investors must therefore exercise due caution. InvestoAxis is not liable or responsible for any losses caused as a result of decisions based on the article.
