Pre-results positioning; sell-side consensus of $29.23 is below the $31.67 share price as Jefferies and BofA cut targets again
Going into results (tonight, 5pm US Eastern, after the close), the fresh first-hand news is all from the sell side. The shares are being held up by a rebound from the oversold FTC sell-off and by the peptide narrative, yet analysts are cutting targets before the report.
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Consensus is now about 8% below the share price, so the gap between a narrative-driven price and worsening earnings expectations is out in the open. Institutions are voting with their feet and leaning cautious. Options price a one-day move of ±14.5%, binary-event territory, and short interest is highly concentrated. A genuine beat would give a short squeeze fuel, but history suggests the stock is unlikely to rise even on a beat.
Key evidence
- Jefferies cut its price target from $25.50 to $24.50 (one of the lowest on the Street)
- BofA's Allen Lutz cut the target from $37 to $30 after the FTC lawsuit and kept a Hold rating (it was still $37 on 6 Aug, so this is a fresh cut)
- StockStory's 9 Aug tally: the average analyst price target has slipped to $29.23
- Closed at $31.59 on Friday 7 Aug and now trades at about $31.67, roughly 8% above the sell-side consensus
- Revenue consensus of $698.9 million (up 28.3% year on year, a clear slowdown from 72.6% a year earlier)
- Adjusted EPS consensus of -$0.049 (against +$0.17 a year earlier: a swing from profit to loss)
- Options imply a one-day move of ±14.5% (binary-event territory); short interest is highly concentrated
Catalysts to watch
- Results tonight at 5pm US Eastern after the close (tomorrow morning Singapore time)
- Whether GLP-1 and peptide volumes come through
- Gross margin ramp after consolidating Eucalyptus
- Impact of the FTC lawsuit on customer acquisition costs and cancellation rates
- Whether full-year guidance of $2.8 billion to $3 billion holds
Risks
- Sell-side consensus is below the share price: institutions are voting with their feet and leaning cautious
- The gap between a narrative-driven price and worsening earnings expectations is now in plain sight
- Year-on-year growth slowing from 72.6% to 28.3%
- A swing from profit to loss (EPS from +$0.17 last year to a consensus -$0.049)
- The FTC lawsuit and securities law-firm investigations keep weighing on the legal front
- History suggests the stock is unlikely to rise even on a beat
Sources (4)
- Jefferies research note ($24.50 price target)
- BofA research note, Allen Lutz ($30 price target)
- StockStory analyst tally, 9 Aug
- Options market implied volatility data
A brief is a lead for our research, not a verified conclusion or advice.