Every cloud has a silver lining, and for Local Bounti Corp, the impressive rally of its stock might just be that silver lining. Despite the company's projected loss of $7.88 per share next year and a current year loss of $10.17 per share, the stock has managed to reach a 52-week high of 41.08
. This rally has caught the attention of Wall Street, with an overall consensus rating of 'Buy' and a target price of $11.25. However, with a high beta of 1.568, investors should be prepared for potential volatility. The question now is whether this rally can continue, or if the company's financial performance
will eventually bring it back down to earth. At present, the Issuance Repayment of Debt Securities for Local Bounti Corp is relatively stable compared to the previous year. The Share-Based Compensation is projected to increase to approximately $42.3 million this year. However, the value of Earnings Before Tax is likely to decrease to -$114 million. The primary objective of this brief analysis is to provide a detailed forecast of Local Bounti Corp for institutional investors. We aim to predict the outlook for Local Bounti Corp for December.
There are currently many different techniques concerning forecasting the market as a whole as well as predicting
future values of individual securities such as Local Bounti Corp. Regardless of method or technology, to accurately forecast the stock or bond market is more a matter of luck rather than a particular technique. Nevertheless, trying to predict the stock market accurately is still an essential part of the overall investment decision process. Using different forecasting techniques and comparing the results might improve your chances of accuracy even though unexpected events may often change the market sentiment
and impact your forecasting results.
Predictive Modules for Local Bounti
Sophisticated investors, who have witnessed many market ups and downs
, frequently view the market will even out over time. This tendency of Local Bounti's price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy. Please use the tools below to analyze the current value of Local Bounti in the context of predictive analytics.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Local Bounti. Your research has to be compared to or analyzed against Local Bounti's peers to derive any actionable benefits. When done correctly, Local Bounti's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy toward taking a position in Local Bounti Corp.
How important is Local Bounti's Liquidity
Local Bounti financial leverage
refers to using borrowed capital as a funding source to finance Local Bounti Corp ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Local Bounti financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Local Bounti's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Local Bounti's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown
between Local Bounti's total debt and its cash.
Local Bounti Gross Profit
Local Bounti Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Local Bounti previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Local Bounti Gross Profit growth over the last 10 years. Please check Local Bounti's gross profit
and other fundamental indicators
for more details.
Is Local Bounti valued adequately by the market?
The latest Local Bounti Corp price slide may encourage institutional investors to take a closer look at the firm as it is trading at a share price of 3.20
in trading volume. The company directors and management were unable to exploit market volatilities in October
. However, diversifying your overall positions with Local Bounti can protect your principal portfolio during market swings. The stock standard deviation of daily returns for 90 days investing horizon is currently 8.73. The very high volatility is mostly attributed to the latest market swings and not very good earnings reports from some of the Local Bounti Corp partners.
Warren Buffett once said, “Risk comes from not knowing what you're doing.” This sentiment rings true when considering the forecast for Local Bounti Corp's stock. Despite the recent impressive rally, the company's high probability of bankruptcy at 96.00%, and an alarming Return on Equity of -0.86, suggest caution.
Its financial stability is further questioned with a negative income, forecasting an EPS Estimate Next Year of a loss of 7.88. The Beta value of 1.57 indicates a higher volatility compared to the market, while the significant variance of 73.68 also underlines this risk. Furthermore, with a substantial total debt of 120.08M
, the financial health
of the company seems precarious. While the current rally may be attractive, the overall data points towards a risky investment. Thus, investors should tread carefully, keeping in mind that impressive rallies can sometimes precede significant downturns. The ultimate direction of Local Bounti Corp's stock will be influenced by a myriad of factors, including its ability to manage its debt, improve profitability, and navigate through its high bankruptcy risk. .
Our perspective of the latest Local Bounti rise
The recent performance of Local Bounti Corp's stock has demonstrated a promising trend, with the standard deviation decreasing to 8.58 as of the present day. This reduction in volatility suggests a more stable and less risky investment environment for the stock. The lower standard deviation, combined with the company's solid business model and growth prospects, indicates that the stock's recent ascent is not merely a fluke, but a reflection of its inherent strength. Consequently, we advise investors to consider adding Local Bounti Corp to their portfolios, as it offers a potentially lucrative investment opportunity. Local Bounti Corp has exhibited above-average volatility over the chosen time period. Investors should thoroughly examine Local Bounti Corp on its own to ensure their intended market timing
strategies align with their expectations of Local Bounti's volatility. Understanding different market volatility
trends can often assist investors in timing the market. The correct use of volatility indicators allows traders to measure Local Bounti's stock risk against market volatility during both bullish and bearish trends.
The heightened level of volatility that accompanies bear markets can directly affect Local Bounti's stock price
, adding stress for investors as they watch the value of their shares decline. This typically compels investors to rebalance their portfolios by purchasing different stocks as prices drop. In conclusion, the overall consensus among analysts is a 'Buy' for Local Bounti Corp stock, with 3
strong buy recommendations out of a total of 4
estimates. The highest estimated target price stands at $45.513
, suggesting a significant potential upside from the current market valuation of $3.2. However, investors should also consider the possible downside price of $0.032, indicating a level of risk. The estimated target price value is $15.003, which is considerably higher than the current valuation real value of $6.05. As we approach the fiscal year end in December, it will be interesting to see if Local Bounti can continue its upward trajectory. .
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