Quiksilver, Inc. (NYSE:ZQK) Fails to Break Through the $4 Barrier
Quiksilver, Inc. (NYSE:ZQK) is not in a terrific shape at the moment. Yesterday, it added 2.37% while shifting around $9.9 million worth of shares, but despite finishing the day in the green, it failed to jump above the $4 per share mark.
Of course, it’s now sitting at $3.88 which means that if it manages to register one or two positive sessions, it might just be able to break through the aforementioned barrier. Even if it does, however, this will be little consolation for the people who were jumping in back in November 2013 when ZQK was hovering just below the $10 mark. So, what went wrong, you might be wondering?
Apparently, investors are not particularly happy with ZQK‘s results. On June 2, the company carried out a conference call during which they discussed the figures found in the 10-Q for the period ended April 30. On the very next day, ZQK lost more than 40% of its value. But what were investors so upset about?
Here’s a recap of the balance sheet:
- cash: $67 million
- current assets: $865 million
- current liabilities: $304 million
- quarterly revenues: $408 million
- quarterly net loss: $60 million
The most disconcerting facts about the results are, without a doubt, the 10% drop in revenues and the 88% increase in net loss year over year.
Naturally enough, research companies like Zacks have noticed this. On June 6, they said that because of the less than impressive figures and the continuous earnings estimate revisions, they are putting a “Strong Sell” rank on the stock. About an hour and a half before today’s opening bell, they said once again that you might want to consider getting rid of ZQK for the greater good of your portfolio.
There are, however, people who believe that the company will manage to weather the difficulties. Some insiders have recently purchased stock on the open market and, naturally enough, the more forward-looking investors reckon that this speaks volumes about ZQK‘s bright future. They also think that the current levels present a really good buying opportunity.
The truth is, it’s really hard to predict what’s going to happen next. On the one hand, ZQK is indeed struggling to meet the sales estimates and the negative bottom line is, without a doubt, deterring a lot of investors.
On the other, the company announced back in May 2013 that it’s starting to work on a profit improvement plan which should be fully implemented by the end of the fiscal 2017. If it’s successful, it should dramatically improve ZQK‘s results. If it isn’t, shareholders could be in for another disappointment.
