The specialty retailer of hard-surface flooring, LL Flooring (NYSE:LL), announced that it is exploring alternatives to maximize its shareholders’ value. This might include a potential sale of the company, a merger, or other strategic transactions. Following the announcement, this Penny stock spiked in the pre-market session, trending nearly 18% higher.
The company has been garnering external interest in the buyout ever since a consortium of investors, who hold a significant stake, pushed the company to engage in the sale process. LL Flooring received an offer from a subsidiary of F9 Brands, which was offering $5.76 per share in cash for the acquisition.
On June 26, the company announced that it rejected the buyout offer from F9 Brands’ subsidiary. It said that the offer price undervalued its business and its prospects. However, it remains open to considering a new proposal that appropriately values the company.
What is the Stock Price Forecast for LL Flooring?
Though the stock is up in the pre-market session, it has declined by over 32% year-to-date. Further, it has lost more than 64% of its value in one year. The company is under pressure due to lower brand awareness. Meanwhile, a challenging macro backdrop is taking a toll on big-ticket discretionary purchases and hurting the demand for home remodeling projects.
Given the headwinds, LL Flooring’s top line fell 20.9% year-over-year in Q2. Moreover, it reported an adjusted loss of $1.28 a share compared to earnings of $0.13 a share in the prior-year quarter.
As the company is struggling, Loop Capital Markets analyst Laura Champine maintains a Sell rating on LL Flooring stock. The analysts’ price target of $2 implies 46.67% downside potential from current levels. In addition, LL Flooring stock has an Underperform Smart Score of two.
While investors should take caution before being constructive on LL Flooring stock, one can leverage TipRanks’ penny stock screener to find other attractive Penny stocks with solid growth potential.
