All true but the market cap ran way ahead of a logical valuation so when Q3 came in weak the stock tanked. The market seems to be expecting a weak 4th quarter as well or the stock wouldn't keep tumbling. The revenue growth in Q3 just wasn't enough to support the market cap. Had they had a blow-out Q3 we wouldn't be having this conversation... The market is doing the talking right now whether people like what its saying or not.
Revenue has absolutely grown but does it support a $21 mil market cap right now? That was the key risk. If growth does not match expectation and market cap is already high, there is only one place for a stock to go. In my opinion, the market is saying "prove that sell through is happening". Its a strong statement to say that everybody that started selling Cabana is still with them but all eyes are on revenue and its (IMO) one of 2 things:
- either its solely related to it taking longer for product to make it to store shelves due to centralized decision making OR
- sell through is not as strong as they had hoped
Based on stock price, PLSB isn't getting the benefit of the doubt and market cap will adjust accordingly and overly so.
My wait continues.
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