The health services IT company Trxade Group (MEDS) announced a share repurchase program of up to $1 million. Shares rose 3.3% in Tuesday’s extended trading session after closing 1.1% higher on the day.
Over an unspecified period, the company plans to buy back shares in the open market or through private negotiations, subject to market conditions.
The share-repurchase program will be funded entirely by the company’s working capital. Trxade Group had approximately $5.2 million in cash as of March 31, 2021.
Trxade Group CEO Suren Ajjarapu said, “We believe we have a strong balance sheet, and believe that by reducing the number of outstanding shares of common stock, we can increase stockholder value, while still maintaining sufficient cash resources to fund our operations.” (See Trxade Group stock analysis on TipRanks)
On May 19, Maxim Group analyst Allen Klee reiterated the stock’s price target of $11 (200.6% upside potential) and a Buy rating.
Klee commented, “Telehealth is one of the priorities going forward and we project very high profitability. Trxade has signed up 500+ stores offering the service to thousands of customers in all 50 states. Other initiatives include an app for proof of vaccination and Covid-19 status, Trxade Prime to help independent pharmacist customers make smaller buys, and an app for filling and delivering prescriptions.”
The analyst further added, “We lower our 2021 estimates to reflect supply chain challenges and a slower timing for Bonum Health revenues to become material. We continue to expect a sharp rebound in revenue in 2022.”
The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating. That’s based on 2 Buys. The average analyst price target of $10.25 implies 180.1% upside potential to current levels. Shares have decreased 25.8% over the past six months.
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