Exela Technologies (XELA) has investors wondering what is next for the stock after it plummeted to a new 52-week low. Texas-headquartered Exela is a global provider of business process automation solutions. It has more than 4,000 customers in diverse industries across over 50 countries. XELA stock has seen heavy selling in 2022, falling 94% year-to-date. The stock dropped more than 4% on August 23, to hit a new 52-week low of $1.11.
XELA stock decline came at a time when meme stock investors are getting a reality check. Bed Bath & Beyond (BBBY), GameStop (GME), and AMC Entertainment (AMC) stocks also fell steeply on August 23.
Exela’s $1 Problem for Investors
Nasdaq’s listing compliance rules require companies to maintain a minimum price of $1 on their stock. If a stock trades below $1 for a long time, it can be booted from the exchange. XELA stock’s steep plunge puts it at the risk of falling short of Nasdaq’s listing compliance requirements.
Exela Technologies recently implemented a one-for-20 reverse stock split partly to preserve its Nasdaq listing. However, the stock has continued to fall, bringing back the delisting risk.
Is Exela Technologies a Good Buy?
Despite the fall to $1 raising Nasdaq delisting risk for Exela, you may not want to write off the stock yet. Exela’s management recently unveiled a plan to repurchase 10 million shares. The buyback program can tighten the stock’s supply and drive the stock upward. Exela is also continuing to win more business, which can help bolster confidence in the stock. It recently announced security contracts worth $11 million in Germany. The company also plans to divest some of its operations to raise cash to fund share repurchases and reduce debt.
Wall Street is cautiously optimistic on XELA stock. According to TipRanks’ analyst rating consensus, XELA stock is a Moderate Buy. The average Exela Technologies price target of $21 implies a whopping 1,792% upside potential.
Final Thoughts
While XELA stock’s drop to $1 poses a delisting risk, the company has remedies to avoid being kicked out of Nasdaq. For example, it could do another reverse stock split. Indeed, many retail investors are betting that Exela’s fortunes will take a turn for the better. TipRanks’ Stock Investors tool shows that retail investor sentiment is currently Positive on Exela Technologies. In the past 30 days, 1.7% of the best-performing portfolios tracked by TipRanks increased their exposure to XELA stock.
Read full Disclosure
