Should you buy Rite Aid after the earnings beat?

By: Motiur Rahman
Motiur Rahman
Md Motiur enjoys researching how companies are solving challenges the world will face over the coming decades. In his… read more.
on Jun 24, 2021
  • Rite Aid stock pulled back on Thursday after announcing its most recent quarterly results.
  • The company’s EPS beat expectations while revenue came in lower than expected.
  • Is the pullback an opportunity to buy RAD shares?

Rite Aid Corp (NYSE:RAD) shares plunged 13% Thursday morning after the company’s most recent quarterly report. RAD reported earnings the beat expectations on Thursday morning, but revenues came short of estimates. Shares fell after the company issued tepid guidance on fiscal 2022 revenue and earrings.

RAD earnings snapshot and outlook

Rite Air reported $0.38 adjusted earnings per share for the most recent quarter, beating the non-GAAP consensus analyst expectation of $0.22 with $0.16. However, the company’s revenue came short of expectation after posting $$6.16 billion. The market expected a top line of $6.21 billion.

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RAD also said it expects to make a fiscal-year 2022 net loss in the range of $0.79-$0.24 per share compared to a consensus analyst estimate of $-0.46. It expects revenue to be approximately $25.1-$25.5 billion, slightly higher than the average analyst expectation of $24.66 billion.

Source – TradingView

Technical overview: RAD seems under pressure

Technically, RAD shares appear to have recently pulled back despite a relatively positive quarterly report. The company’s guidance for next year indicates caution. The current pullback could continue before the next rebound.

Investors can target extended pullbacks at approximately $15.73 and $12.45. The key resistance levels are $19.40 and $22.69.

Bottom line: Rite Aid looks poised for more downward movement

RAD shares seem destined for more declines in the short term as investors continue to digest the latest earnings report. It may be best to wait for a while before taking a bullish position.

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