Why Bed Bath & Beyond Stock Is Up By 8% Today

Bed Bath & Beyond Stock Rallies Despite Disappointing Quarterly Report

Shares of Bed Bath & Beyond have started today’s trading session with significant gains after the company released its quarterly results.

The company reported revenue of $1.88 billion and an adjusted loss of $0.25 per share, missing analyst estimates on both earnings and revenue.

The company noted that while sales were slow in September and October, they improved in November. Bed Bath & Beyond added that customer demand was strong but supply chain issues put pressure on sales, leading to a negative impact of $100 million in the quarter. According to the company, the impact was even higher in December.

What’s Next For Bed Bath & Beyond Stock?

While the report missed analyst estimates, traders rushed to buy the stock at the beginning of today’s trading session. Later, the stock found itself under pressure, but maintained healthy gains.

It looks that some market participants are ready to bet that supply chain problems are temporary and Bed Bath & Beyond will be able to successfully navigate the inflationary environment in 2022.

Analysts are a bit sceptical, and their estimates continued to move lower in recent weeks. Currently, analysts expect that Bed Bath & Beyond will report earnings of $0.78 per share in fiscal 2022 and earnings of $1.44 per share in fiscal 2023, so the stock is trading at roughly 10 forward P/E.

Back in 2021, the stock enjoyed several rallies as traders attempted to squeeze short sellers during the “meme stock” mania. The momentum was not sustainable, and Bed Bath & Beyond stock finished the year 2021 near $14.50 after touching highs at $53.90 in January 2021.

The short interest in Bed Bath & Beyond stock remains significant, but it looks that the interest in short squeezes (and “meme stocks” in general) has declined significantly. In this light, Bed Bath & Beyond will have to come up with real catalysts for its stock to have a chance to gain sustainable upside momentum.

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