IDT stock forecast as shares plunge nearly 8% after FQ1 results

On Wednesday, shares of US telecommunications company IDT Corp (NYSE:IDT) plummeted by nearly 8% after reporting its most recent quarterly results. The company announced its fiscal first-quarter revenue and earnings Tuesday after markets closed. IDT also said it plans to go ahead with the spin-off of VoIP unit net2phone in early 2022 should the board approve it.

The company posted FQ1 non-GAAP earnings per share of -$0.08. On the other hand, its GAAP EPS came in at -$0.10, while quarterly revenue increased by 7.9% from the same quarter a year ago to $370 million. 

Although IDT shares have pulled back nearly 30% since the 15th of November, the stock is still up more than 265% this year, thus leaving little room for more upward movement.

Is IDT Corp stock undervalued?

From an investment perspective, IDT shares trade at an attractive P/E ratio of 15.23. In addition, its P/S multiple of just 0.77 suggests the stock could be substantially undervalued.

However, without a clear revenue and earnings forecast for the next few years, it could be too risky to bet on the current value of the stock.

Therefore, with the stock rallying more than 265% this year, it could be time for profit-takers to swoop in.

Technically, IDT corp shares seem to be trading within a descending channel formation in the intraday chart. As a result, the stock has plummeted to trade below the 100-day moving average pushing it closer to the oversold conditions of the 14-day RSI.

Therefore, investors could target short-term technical rebounds at about $52.47, or higher at $59.13. However, given this year’s rally, IDT shares could fall further towards $40.21 and $33.76.