If there’s one thing we’ve done a lot of, it’s written about penny stocks. These low-priced shares are typically likened to start-ups or high-growth, high-risk, high-reward names. But something that some seem to avoid discussing are companies that may be penny stocks because they’ve fallen on hard times or are out of favor with investors. Over the last few weeks, we’ve put together this series, “Will XYZ Be On Your List Of Penny Stocks In 2022,” for a reason.
The heightened levels of bearishness in the stock market today have brought on quite the amount of selling activity. Of the companies we’ve discussed, 3 out of 8 have breached the penny stock ($5) threshold, with SoFi Technologies (NASDAQ: SOFI) becoming the latest to fall victim to the stock market crash in 2022. The trend of popular companies becoming penny stocks isn’t new either. We’ve discussed how many household names are trading well within the sub-$5 arena. You can view more in the article 10 Top Penny Stocks To Buy Under $5 That Are Household Names. Nevertheless, the question remains: which one will be next?
So far, on our list of penny stocks (and potential penny stocks), we’ve discussed:
- SoFi Technologies
- Tattooed Chef (NASDAQ: TTCF)
- Robinhood Markets Inc. (NASDAQ: HOOD)
- DraftKings Inc. (NASDAQ: DKNG)
- Tattooed Chef (NASDAQ: TTCF)
- fuboTV Inc. (NASDAQ: FUBO)
- Canopy Growth Corp. (NASDAQ: CGC)
- Virgin Galactic (NYSE: SPCE)
With earnings season and a stock market sell-off in full force, some are wondering which company will come within striking distance of $5 next. Today we dive in and see why some traders ask, Will PLBY Group, Inc. (NASDAQ: PLBY) Be On Your List Of Penny Stocks In 2022?
Will PLBY Stock Join The List Of Penny Stocks?
It had all the glitz and glamor of any exciting “media play” and a SPAC-tacular entry into the public markets. Last year, the company made its public debut via a merger with Mountain Crest Acquisition Corp (f/k/a NASDAQ: MCAC). The momentum behind the company was heightened by interest in non-fungible tokens (NFTs), which sent shares surging to highs of over $63. It even tapped rapper Cardi B as a founding creative director for its CENTERFOLD creator-led platform.
Hopes were for creators to engage with fans, expand community outreach, and build unique content into a commerce business platform. Centerfold creators offer content subscriptions similar to other popular platforms with hopes of capturing market share. Other notable founding creators included social media personalities like Amanda Cerny, Lana Rhodes, Leila Leilani, Mia Khalifa, Amber Rose, and many Playmates.
Despite the move, Centerfold hasn’t managed to turn the page on the downtrend in PLBY stock this year. The lackluster staying power of metaverse tech in the short-term paired with a downturn in the NFT market hasn’t helped either.
Shares of PLBY stock have gone from red-hot to ice-cold as new record lows were reached this week. A lot of the attention on the company is focused on its upcoming earnings results. In its full-year update earlier this year, PLBY Group reported a sales beat for the quarter. However, earnings per share at a loss of $1.33 didn’t compare to analyst expectations of 10 cents. Revenue grew 67% year-over-year to $247 million, helped by a 131% jump in direct-to-consumer revenues. Fourth-quarter revenue also jumped triple digits, year-over-year to $95.7 million, also supported by DTC revenues. Heading into the next earnings update, the markets are looking for signs of “more.”
PLBY Stock Forecast
Considering the varied landscape for PLBY stock, some may wonder what Wall Street thinks right now. Are analysts still bullish in the face of broad market selling, or are they leaning bearish heading into earnings? Here are what some firms see heading into earings:
- Canaccord Genuity Group PLBY Stock Forecast: Buy Rating, Price Target Cut to $28 from $36
- Chardan Capital PLBY Stock Forecast: Buy Rating, Price Target Cut to $39 from $49
- Roth Capital PLBY Stock Forecast: Buy Rating
- Loop Capital PLBY Stock Forecast: Buy Rating, Price Target Cut to $26 from $50
It’s important to note that among all firms, each has given a Buy rating on PLBY stock. Additionally, and at least for now, no price target is within the penny stock range? Does this signal hope for PLBY stock, or have analysts simply not given adjusted expectations based on current market conditions?
Should You Buy PLBY Stock?
So, is PLBY stock a buy right now? Much of the answer to that question could involve PLBY Group’s next earnings report. Aside from the performance in the stock market this year, corporate growth has become apparent based on 2021 results. Net loss could be a sticking point for investors peering into Q1 data. Last quarter, net loss was $58.1 million, and adjusted EBITDA came in at $14 million.
PLBY Group’s Chief Executive Officer Ben Kohn explained that “This year we are assembling the pieces acquired in 2021 to create a scalable foundation for our transformed business and the omni-channel consumer ecosystem we are building is expected to drive substantial recurring revenue for long-term, sustainable and meaningful growth.”
PLBY Stock Earnings Outlook
CFO Lance Barton discussed the financial forecast for 2022 in its last earnings call. Barton explained that he expects “revenue in 2022 to be approximately $350 million for the year, that’s roughly 40% growth over 2021. Similar to last year, most of this growth should come from the continued expansion of our direct-to-consumer businesses, along with growth and licensing revenue. And as CENTERFOLD scales we expect to see more revenue contribution coming from it later in the year. In terms of a quarterly breakdown of revenue, I expect the first quarter to be approximately $68 million…We expect adjusted EBITDA to be around $55 million for the year, with EBITDA margin much lower in the first half of the year as we continue to ramp investments where revenue may lag and come later on. And similar to this year, the bulk of EBITDA should come in the fourth quarter as our revenue rams.”
With plans for growth during the back half of 2022 and expectations of Q1 revs to come in around $68 million, traders will be paying close attention to upcoming figures to see if PLBY Group has met the mark. It will also be interesting to see how inflationary pressures on the stock market at large will impact PLBY stock and other growth stage names during the first half of 2022. If PLBY is on your watch list right now, leave a comment about your outlook for the company and whether or not you think new lows are in store.