Roth Capital has adjusted its price target for Reed's Inc. (REED, Financial), increasing it from $1.75 to $2 while maintaining a Buy rating. This revision reflects a slightly more optimistic outlook on the stock's potential future performance.
The update comes as Reed's continues to navigate its turnaround strategy successfully. Key efforts include streamlining its balance sheet, achieving revenue stabilization, and benefiting from significantly reduced operating costs. These strategic moves have bolstered the firm's confidence in the company’s future growth trajectory.
Roth Capital anticipates that Reed's stock will continue on an upward trend, supported by these positive developments and strategic advancements.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 1 analysts, the average target price for Reed's Inc (REED, Financial) is $1.75 with a high estimate of $1.75 and a low estimate of $1.75. The average target implies an downside of 2.78% from the current price of $1.80. More detailed estimate data can be found on the Reed's Inc (REED) Forecast page.
Based on the consensus recommendation from 1 brokerage firms, Reed's Inc's (REED, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Reed's Inc (REED, Financial) in one year is $0.15, suggesting a downside of 91.67% from the current price of $1.8. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Reed's Inc (REED) Summary page.
Key Business Developments
Release Date: March 26, 2025
- Net Sales: $9.7 million for Q4 2024, down from $11.7 million in Q4 2023.
- Gross Profit: Increased to $2.9 million in Q4 2024 from $0.5 million in Q4 2023.
- Gross Margin: 30% in Q4 2024, up from 4% in Q4 2023.
- Delivery and Handling Costs: Reduced by 10% to $1.7 million in Q4 2024.
- Selling, General and Administrative Costs: $4.8 million in Q4 2024, up from $3.0 million in Q4 2023.
- Operating Loss: Improved to $3.7 million in Q4 2024 from $5.0 million in Q4 2023.
- Modified EBITDA: Negative $0.7 million in Q4 2024 compared to positive $43,000 in Q4 2023.
- Cash from Operating Activities: Used approximately $3.9 million in Q4 2024.
- Cash and Total Debt: $10.4 million in cash and $9.6 million in total debt as of December 31, 2024.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Reed's Inc (REED, Financial) completed a $10 million private placement, enhancing financial flexibility and enabling inventory rebuilding.
- The company launched a new multifunctional soda line, which has been well-received by retailers, securing over 8,000 points of distribution.
- Gross margin improved significantly to 30% in Q4 2024, up from 4% in the previous year, driven by supply chain optimizations.
- Reed's Inc (REED) expanded its distribution network, gaining over 1,100 new placements across major retailers.
- The transition from glass bottles to cans has been positively received, reducing delivery and handling costs by 10%.
Negative Points
- Net sales declined to $9.7 million in Q4 2024 from $11.7 million in the previous year, primarily due to inventory constraints.
- Operating expenses increased to $6.6 million in Q4 2024, up from $5.4 million in the previous year.
- The company experienced significant short order shipments, impacting its ability to meet customer demand.
- Modified EBITDA was negative $0.7 million in Q4 2024, compared to positive $43,000 in the previous year.
- Reed's Inc (REED) continues to face challenges in transitioning Virgil's Full Sugar line from glass to cans, affecting sales velocity.
