The chart looks attractive from a TA (technical analysis) perspective, with an apparent double bottom at around $9 (.45 pre-reverse split). But I also think that RAD is attractive from a fundamental perspective, as follows:
There are approx 54 million common shares outstanding on Rite Aid (about 1 billion pre-reverse split). That puts the total market cap currently at around $500 million. Gross sales for the most recently completed fiscal year was more than $21 billion. And even with the fairly recent reduction in total store locations, the current forecast for next fiscal year is that sales will be at least $21 billion.
On that sales level, Rite Aid Sr. Mgmt have just forecasted a loss for the upcoming fiscal year of between $170 million and $220 million. Since the average healthy large cap public company trades at about 1.5 times sales, the avg healthy large cap company would be valued at about $30 billion (if they had an annual sales level of $21 billion).
Rite Aid's current market cap of about $500 million is less than 2% of $30 billion. Accordingly, I think that the coming weeks/months will demonstrate that Rite Aid common stock was very cheap at around $9 per share (45 cents per share pre 20:1 reverse split). As always, simply my opinion.
RAD
AI
