6/17/2023 0 Comments Luminar stock priceThe company’s management also sees more than $300 million in liquidity by the end of this year, along with a positive gross margin. Sure, there may be losses, but these losses are tolerable and normal for a startup that is growing at this pace. The company’s sales growth here is remarkable, with triple-digit growth expected for the next five years. The concerns around Luminar’s losses are severely overblown. Two days before the Q1 report I noted, “Personally, I believe explosive gains are possible in the near term, especially if its Q1 report surprises.” The 20% appreciation is certainly not explosive, but I believe it is a start to a long-term uptrend, as Wall Street reconsiders LAZR stock. The stock is up 20% since its Q1 earnings report, outperforming sales expectations and delivering 111.7% revenue growth year-over-year. Luminar Technologies (NASDAQ: LAZR) is another short-squeeze candidate that seems to be changing course. A short squeeze is also possible, since the short interest currently sits around 21%. Once year-over-year sales metrics reach positive territory, I expect substantial appreciation here. Thus, I believe ROOT stock is a steal at this range. The company has much more cash than it has debt, which is enough to cover its losses until it reaches profitability. I believe even better results are possible here, since the company has outperformed earnings estimates over the past four quarters.Īnd unlike many other short-squeeze stocks, the bankruptcy risk here is negligible. Additionally, losses per share are expected to improve, narrowing to -$12.34 from -$21.11 last year. Analysts expect this revenue decline to reverse course and turn positive, with the company projected to grow at a 13.9% clip next year. The company has been slowly narrowing its losses, and its revenue decline in Q1 was less-than-expected, at 17.65%. But that’s not the only thing that makes me believe ROOT offers good value right now. That’s ranked better than 91.75% of its peers. The average revenue decline for the past four quarters is nearly 20%, and that has caused the stock to trade at a massive discount, with a price-to-sales ratio of only 0.23-times. The biggest factor behind the bearish sentiment with this company is its revenue decline since Q2 2022. However, since March this year, ROOT stock seems to have bottomed out, trading sideways at the $4-5 range after reaching a low of $3.47. Root Inc (NASDAQ: ROOT) is a car insurance startup that has been struggling in the stock market since its IPO in 2020. Here are three short-squeeze candidates worth keeping an eye on right now. With that in mind, my list of top short-squeeze candidates to buy in May are companies that aren’t at material risk of bankruptcy and have a clear long-term growth trajectory with unreasonable amounts of short interest. A short squeeze is not something that commonly happens, and it is safe to say that you’ll be making more losses simply by investing in heavily-shorted businesses. Such high short-interest ratios can make these stocks well-positioned to go on a tear to the upside, if their underlying businesses report any slight improvement or good news.Ĭonversely, by betting on such a thing happening, you’ll be investing in stocks that are perpetually bleeding red ink. Thus, the bearish sentiment behind these companies has caused many stocks to have unusually high short-interest ratios. The current macroeconomic environment has ensured there is no scarcity of cash-burning businesses that are barely afloat. Short-squeeze candidates aren’t very hard to come across in this environment.
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