Wheels Up Experience (NYSE:UP) stock dived more than 60% on Thursday after a Wall Street Journal report highlighted that the company has engaged restructuring advisers to stay afloat amid challenges. It’s worth highlighting that the shares of this on-demand private jet provider have crashed about 88% so far this year and are down about 95% in one year, reflecting widening losses and the recent executive transitions.
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According to a report, Wheels Up Experience has struggled to drive growth in the post-COVID era and is consulting with restructuring advisers to reignite growth and avoid bankruptcy filings.
In response to these challenges, the company said that it is focusing on a strategic plan to achieve profitability. To support the plan, the company is working with several advisors to secure new investments, raise capital, and execute strategic divestitures.
Losses Continue to Mount for Wheels Up
Wheels Up reported a net loss of $555.5 million in 2022, which widened from $197.2 million in 2021. Meanwhile, in Q1 of 2023, it delivered a net loss of $101 million, which was higher than the prior year. Higher operating expenses and increased interest costs continue to weigh on its profitability.
While the company is struggling with higher losses, it announced in May that its founder, Kenny Dichter, would be stepping down from his role as CEO. The company elevated board member Ravi Thakran to Executive Chairman and named its CFO Todd Smith as Interim CEO.
While the company said it is making executive changes to deliver attractive returns and profitability, it failed to lift investors’ sentiment on the stock as it continued to trend lower.
Is Wheels Up Stock a Good Buy?
Despite the significant drop in its share price, analysts remain sidelined on Wheels Up. It sports a Hold consensus rating based on one Buy and four Hold recommendations. Analysts’ average price target of $1.92 implies 54.84% upside potential.
Wheels Up stock carries an Underperform Smart Score of two on TipRanks.
