Does Redbox Entertainment Inc. (RDBX) offer a good opportunity for investors?

Redbox Entertainment Inc. (NASDAQ: RDBX) stock fell -14.51% on Friday to $4.36 against a previous-day closing price of $5.10. With 4.29 million shares changed hands, the volume of the stock remained lighter than its average volume of 23.18 million shares. During the session, the Shell Companies company that operates in wider Financial sector, reached to the highest price of $5.1500 whereas the lowest price it dropped to was $4.3400. The 52-week range on RDBX shows that it touched its highest point at $27.22 and its lowest point at $1.61 during that stretch. It currently has a 1-year price target of $2.17.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of RDBX was up-trending over the past week, with a rise of 42.95%, but this was down by -35.79% over a month. Three-month performance surged to 23.51% while six-month performance fell -17.89%. The stock lost -56.40% in the past year, while it has lost -41.16% so far this year. A look at the trailing 12-month EPS for RDBX yields -9.33 with Next year EPS estimates of -0.18. For the next quarter, that number is -0.65. This implies an EPS growth rate of -131.10% for this year and 84.40% for next year.

Float and Shares Shorts:

On Jul 14, 2022, short shares totaled 2.25 million, which was 16.46% higher than short shares on Jun 14, 2022. In addition to Mr. Galen C. Smith as the firm’s CEO & Director, Mr. Jason K. Kwong serves as its Chief Strategy & Digital Officer.

Institutional Ownership:

Through their ownership of 79.57% of RDBX’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 7.38% of RDBX, in contrast to 50.69% held by mutual funds. Shares owned by individuals account for 10.49%. As the largest shareholder in RDBX with 7.77% of the stake, Standard General LP holds 979,771 shares worth 979,771. A second-largest stockholder of RDBX, The Vanguard Group, Inc., holds 418,412 shares, controlling over 3.32% of the firm’s shares. Black Maple Capital Management LP is the third largest shareholder in RDBX, holding 186,963 shares or 1.48% stake. With a 3.19% stake in RDBX, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 402,900 shares are owned by the mutual fund manager. The iShares Russell 2000 ETF, which owns about 1.14% of RDBX stock, is the second-largest Mutual Fund holder. It holds 143,480 shares valued at 1.06 million. Vanguard Extended Market Index Fu holds 0.89% of the stake in RDBX, owning 112,252 shares worth 0.83 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Mar 30, 2022, RDBX reported revenue of $63.23M and operating income of -$48.19M. Over the past year, revenue came in at $275.04M while operating income stood at -$162.23M. It generated -$1.44M net income for the quarter, which came to -$87.04M over the last twelve months. The EBITDA in the recently reported quarter was -$22.97M and diluted EPS was -$0.11. EBITDA for the full year was -$55.53M.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for RDBX since 3 analysts follow the stock currently. There are 0 analysts who recommend BUY ratings, while 1 suggest SELL ratings. Of the remaining analysts, 2 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With RDBX analysts setting a high price target of $1.00 and a low target of $0.50, the average target price over the next 12 months is $0.75. Based on these targets, RDBX could drop -77.06% to reach the target high and fall by -88.53% to reach the target low. Reaching the average price target will result in a decline of -82.8% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. RDBX will report FY 2022 earnings on 03/01/2023. Analysts have provided yearly estimates in a range of -$0.91 being high and -$2.16 being low. For RDBX, this leads to a yearly average estimate of -$1.53. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Redbox Entertainment Inc. surprised analysts by $0.09 when it reported -$0.51 EPS against a consensus estimate of -$0.60. The surprise factor in the prior quarter was -$0.32. Based on analyst estimates, the high estimate for the next quarter is -$0.53 and the low estimate is -$0.76. The average estimate for the next quarter is thus -$0.65.



Summary of Insider Activity:

Insiders traded RDBX stock several times over the past three months with 0 Buys and 0 Sells. In these transactions, 0 shares were bought while 0 shares were sold. The number of buy transactions has increased to 17 while that of sell transactions has remained unmoved to 0 over the past year. The total number of shares bought during that period was 6,395,195 while 0 shares were sold.

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