Vacasa (NASDAQ:VSCA) plans to reduce its total employee base by 17%. The vacation rental management platform provider said in an SEC filing that its board approved a workforce reduction plan, which aligns with its strategic priorities to achieve adjusted EBITDA profitability in 2023. Following the announcement, the penny stock is trading about 1.2% lower in the pre-market session on January 25.
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Under the workforce reduction plan, Vacasa will eliminate about 1,300 positions or 17% of its total employees. The plan entails a pre-tax cost of $5 million, including approximately $4 million in severance payments. Also, it has $1 million in employee benefits and related expenses.
Vacasa expects to take most of the charges associated with the plan in the first and second quarters of 2023. Moreover, it anticipates completing the reduction by the second quarter of 2023.
Vacasa follows an asset-light approach, which lays the foundation for the company to achieve adjusted EBITDA profitability for 2023 and beyond. However, during the Q3 call, the company highlighted that it remained over-resourced in several areas, which led to costs exceeding expectations.
Is Vacasa Stock a Buy or Hold?
Vacasa stock underperformed the broader markets in 2022 and lost substantial value. However, it has gained over 32% so far in 2023. Moreover, strong demand and positive adjusted EBITDA will likely support the uptrend in Vacasa.
Vacasa sports a Moderate Buy consensus rating on TipRanks based on two Buy and two Hold recommendations. Further, the price target of $4 implies 139.52% upside potential.
While Vacasa has significant upside potential, investors can leverage TipRanks’ Penny Stocks Screener to find more such attractive investment options.
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