Waitr Holdings Stock Retreats This Week: Good Time to Buy?
There were many businesses that gained in importance during the coronavirus pandemic induced lockdowns and most of those companies also saw their stocks recording significant gains. One such company was on-demand food delivery service Waitr Holdings Inc (NASDAQ:WTRH). Due to the rising importance of its services, Waits had also enjoyed its time in the sun.
However, on Thursday, the Waitr stock plunged by as much as 10% following the announcement of the company’s second fiscal quarter results. The company managed to surpass the expectations of analysts but even that could not stop the Waitr stock from taking a dive. In such a situation, it could be worthwhile for investors to take a closer look at the company and figure out the situation.
However, it should be noted that despite the recent growth in revenues enjoyed by Waitr, the company is still carrying a major debt pile. In the second fiscal quarter, Waitr managed to generate revenues of as much as $60.5 million, which was significantly higher than the analysts’ estimates of $56 million.
On the other hand, the net income for the period came in at $10.7 million, which worked out to earnings per share of $.10 per share. Analysts had projected earnings per share of $.09 per share. During the second quarter, Waitr saw the average daily order count soar to 44000, which reflects a rise of as much as 18%, and in addition to that, the total number of active diners stood at 2 million at the end of the quarter.
The Chief Executive Officer of the company Carl Grimstad stated that Waitr is continuing to strengthen its presence in key areas by expanding the scope of its delivery services. The company has recently started delivering alcohol and groceries as well. He went on to add that these new initiatives to generate growth are being funded through a ‘leaner’ cost structure in order to improve efficiency and also to ensure that there are suitable returns.
At the end of the quarter, the company boasted of a cash balance of $66.7 million and the long term stood at $109.5 million. It should also be noted that Waitr also made a prepayment on its debt to the tune of $10.5 million earlier on in August and in return the interest on its debts was reduced by 2% for a year.
In July, it had also done an at the market offering in order to raise capital that could be used to pare down its debts. While the drop in the stock price following the earnings is surprising, investors should keep in mind that this was the first time that Waitr managed to post a profit since it had gone public back in 2018.
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