Shares of Ranpak Holdings Corp. (NYSE: PACK) have increased 10.5% in the last five days, even after the company reported disappointing second-quarter results on July 28, 2022. Top officials’ belief in the company’s growth story seems to have boosted investors’ confidence in the stock.
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It is worth mentioning here that the shares of this $423.7-million provider of packaging solutions for the industrial and e-commerce industries declined 21.6% in the past month and are down 85.9% since the beginning of 2022.
Before proceeding, let’s take a look at Ranpak’s second-quarter numbers.
Ranpak’s Dismal Q2 Results
The New York-based company posted a loss of $0.14 per share and revenues of $86.8 million in the second quarter. These compare unfavorably with the consensus estimate of a loss of $0.10 per share and revenues of $93.3 million.
The performance was hurt by softness in the e-commerce market, inflationary pressure, high energy prices, and changes in the spending habits of consumers. However, Ranpak’s revenues grew 4% on a constant currency basis while declining 3.6% on a reported basis. It had 136,500 machines at the end of the quarter.
Management Comments Could Have Stirred Market Sentiments
In addition to acknowledging near-term headwinds in July, Ranpak’s Chairman and CEO, Omar Asali, enlightened the market about the company’s growth potential.
Asali said, “While the short term macro environment is challenging, I remain extremely optimistic about the medium and longer term for Ranpak as all of our major tailwinds, namely e-Commerce, Sustainability, and Automation are intact.”
“Our increased access to high quality data, improved processes, and investment in cutting edge R&D provide an excellent platform for us to execute well over the next number of years and capture the value available to us in the market,” Asali said.
He added, “In light of our optimism for our growth prospects I am pleased to announce Ranpak’s Board of Directors authorized on July 26, 2022 a new three-year common equity share repurchase program of up to $50 million.”
Is Ranpak a Good Stock?
Ranpack seems to be a good stock if we consider analysts, retail investors, and insiders who have faith in the growth story of the company.
On TipRanks, PACK stock carries a Strong Buy consensus rating, which is based on three Buys and one Hold. Following the release of the company’s second-quarter results, Ghansham Panjabi of Robert W. Baird reiterated a Buy rating on PACK with a price target of $10 (86.57% upside potential).
Similarly, investor sentiment is Very Positive about PACK stock, as the number of portfolios with investments in PACK has surged 54% in the past seven days.
Furthermore, the company’s insiders have purchased Ranpak shares worth $1.86 million in the past three days. These insiders include the company’s CEO, Managing Director, and one of its Directors.
As evident, confidence is Positive in this insider-friendly stock. A chart showing the insider trading actions on PACK is given below.
Key Takeaways for Prospective Investors
It is evident from the management’s comments that Ranpak’s growth potential is solid. It would eventually rise above the near-term challenges and benefit from its three major tailwinds, which are mentioned above.
Gaining exposure to the stock at current price levels could be a wise move, as PACK’s average price target of $16 provides upside potential of 198.51% from current levels. On TipRanks, the stock has a Smart Score of 8 out of 10, implying that the stock could outperform the broader market.
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