Opinions
The Panic-Proof Portfolio (Stockchase Research)
Build-A-Bear Workshop, Inc.
BBW-N
PAST TOP PICK
Nov 07, 2024
Stock price when the opinion was issued
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The well known brand is celebrating 25 years in the business. Recently, reported earnings were below expectations, however, management reported Q1 2024 as the most profitable first-quarter of any pre-Covid year in its history. It trades at 9x earnings and supports a 42% ROE. Cash reserves are growing, while shares are bought back. We recommend setting a stop-loss at $23, looking to achieve $39 -- upside potential over 35%. Yield 0%
(Analysts’ price target is $39.00)Following record second quarter earnings, we reiterate BBW as a TOP PICK. There will be 50 new locations added in 2024 -- approximately a 10% increase. Cash reserves are growing as management buys back shares. It trades at 9x earnings and supports a robust 42% ROE. They hold no borrowings under their revolving credit facility. We continue to recommend a stop at $23, looking to achieve $40 -- upside potential of 21%. Yield 2.3%
(Analysts’ price target is $39.67)We reiterate BBW as a TOP PICK. Recently reported earnings beat expectations as margins increased, and EPS expanded by 38% thanks to 17 new store openings in Q3. We like that cash reserves are growing as shares are bought back. It trades at 12 earnings and supports a ROE of 42%. We recommend trailing up the stop (from $32) to $39, looking to achieve $54.50 -- upside potential of 18%. Yield 1.7% Season's Greetings!
(Analysts’ price target is $54.53)Our PAST TOP PICK with BBW has triggered its stop at $39. To remain disciplined, we recommend covering the position at this time. This will result in a net investment gain of 19%, when combined with our previous guidance.
Our PAST TOP PICK with BBW has achieved its target at $40. To remain disciplined, we recommend covering half the position at this time and trailing up the stop (from $29) to $32.