In one of those things that just leaves you scratching your head, healthcare company Lifecore Biomedical (NASDAQ:LFCR) shot up over 85% in Monday’s trading session despite making an announcement that could ultimately see it finished as a company. How do these points reconcile? In a fashion perhaps more unexpected than you might think.
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Friday’s trading was nothing short of butchery, seeing Lifecore plunge around 61%. It announced that it was looking into “strategic alternatives,” which included a possible sale. Lifecore also brought out its second-quarter earnings results, which featured a lot more red than any investor would like. Lifecore posted a loss of $0.21 per share versus a loss of $0.04 per share. It was even worse compared to the year prior when Lifecore posted earnings of $0.19. Revenue, meanwhile, was down 10.7% to $38.8 million. That was also a miss. Lifecore brass even noted that it may not be able to function as a going concern much longer.
Monday, however, proved a different story. Barrington analyst Michael Petusky cut his price target on Lifecore from $10 to $8 but kept his “outperform” rating in place. It’s clear that this helped, even if Stephens analyst Jacob Johnson stepped in to hinder things by downgrading Lifecore to a Hold. Lifecore also recently signed a deal with one of its biggest hyaluronic acid customers to help ensure cash flow.
Meanwhile, hedge fund confidence is considered Neutral, as they bought an extra 8,000 shares in the last quarter. Nevertheless, it’ll be interesting to see if this sentiment changes going forward, especially if the company remains worried about continuing as a going concern.
