We have been watching the highly shorted $ATER stock since early April. Short interest really grabbed our attention in The Rock Trading Room.
Now, as fintwit takes notice, $ATER has received an increase in trading volume in recent weeks.
However, the squeeze picture takes a new twist as an earnings report nears for Aterian.
EPISODE 7 OF THE ROCK TRADING PODCAST
The company is scheduled to report earnings on May 9 2022 after market close. Next monday.
The consensus EPS forecast for Q1 2022 is -$0.26. Last year’s EPS for this quarter was -$3.15. Last quarter $ATER pulled in -$0.11 EPS when the consensus forecast was -$0.31. This was a 98.81% YoY increase.
When $ATER last reported on March 7, price the day before was $2.41. The price then rose 11% the next day to 2.69%. Expected revenues were $60.4m and they beat with $63.32m
In the past five consecutive quarters, $ATER stock had four EPS misses and only one beat.
Stavros Georgiadis of InvestorPlace outlines concerning financials for Aterian:
“Despite the increase in revenue of 33.4% to $247.8 million in 2021 and the improvement of the gross margin to 49.2% compared to 45.6% in 2020, the company reported a wider net loss of negative $234.7 million compared to a net loss of negative $63.1 million in 2020. It lost money for the whole period between 2017 and 2021 and it is burning cash. Shareholders have been substantially diluted in the past year, with total shares outstanding growing by 120.3%.”
2 Key Reasons Aterian Stock Q1 Earnings Could Be a Miss – InvestorPlace
There has been another interesting development in $ATER during the past week.
Anton von Rueden was appointed Chief Operating Officer. He will oversee the company’s global supply chain operations and will be based in the United States.
Prior to joining Aterian, Mr. von Rueden was President and COO of e-commerce aggregator Boosted Commerce. At Boosted Commerce he oversaw Business Operations and Marketing for Boosted Commerce’s portfolio of brands. Previously, Mr. von Rueden spent over five years at TechStyleOS as COO and SVP and General Manager of Global Member Services. Prior to TechStyleOS, Mr. von Rueden spent several years consulting companies such as Carfrogger, where he was Co-Founder and CEO, Frommer Legal as COO and Grünkauf AG as COO. Prior to that, Mr. von Rueden was VP of Global Operations at Spreadshirt. Mr. Von Rueden started his career at Ebay Inc. where he spent over 7 years in various roles including Managing Director of Ebay Switzerland and Austria.
Let’s circle back to our friend Stavros Georgiadis of InvestorPlace:
“The war in Ukraine has made global supply chain disruptions even worse for many products. Additionally, inflationary pressures in the U.S. market remain elevated. Inflation is at high levels in Europe, as well. I believe that Aterian probably will report a lower contribution margin, which is the difference between its sales and variable costs. What would be bad news for profitability.”
2 Key Reasons Aterian Stock Q1 Earnings Could Be a Miss – Stavros Georgiadis
Considering the volatile status of current markets, one could see why someone would be concerned with a company like Aterian heading into earnings.
But the thing is, considering short interest, I am willing to take the gamble. If this thing has any type of beat, it should rocket, and shorts would be left in the dust.
In February this year, 6.68 million shares were being shorted, but the latest data as of mid-March indicated 9 million shares being shorted- that’s an increase of roughly 33%. Analysts hold a strong “buy consensus” rating and have set an average price target of $5.50, which would imply 130% upside potential over the next twelve months.
Analysts who follow Aterian Inc (ATER) on average expect it to add 534.83% over the next twelve months. Those same analysts give the stock an average rating of Strong Buy. That average rating earns ATER an Analyst Ranking of 58, which means it ranks higher than 58 of stocks, based on data compiled by InvestorsObserver.
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