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In a challenging market environment, Arko Corp (NASDAQ:ARKO)’s stock has hit a 52-week low, with shares dropping to $3.81. The convenience store operator has faced significant headwinds over the past year, reflected in a substantial 1-year change with a decline of -34.33%. According to InvestingPro analysis, the stock’s RSI indicates oversold territory, while management has been actively buying back shares - two of 13+ exclusive insights available to subscribers. Investors have shown concern as the company navigates through a complex retail landscape, which has been further complicated by economic pressures. Despite these challenges, the company maintains strong fundamentals with a healthy current ratio of 1.62 and liquid assets exceeding short-term obligations. The current price level marks the lowest point for ARKO’s stock in the last year, signaling a period of heightened investor caution and potential reassessment of the company’s market position and growth strategy. InvestingPro’s comprehensive analysis suggests the stock is currently undervalued, with detailed valuation metrics and 1,400+ company research reports available to subscribers.
In other recent news, Arko Corp. reported fourth-quarter earnings that fell short of analyst expectations, with an earnings per share (EPS) of -$0.03, missing the forecasted $0.02. The company’s revenue also came in below expectations at $1.99 billion, compared to the anticipated $2.27 billion. This underperformance was highlighted by a decline in net income for the year, which dropped to $20.8 million from $34.6 million in the previous year. Stifel analysts responded to these results by downgrading Arko’s stock from Buy to Hold, adjusting the price target from $8.50 to $7.50. The downgrade reflects concerns over Arko’s ongoing challenges with same-store merchandise sales and fuel volume, which have declined by 4.3% and 4.4%, respectively. Despite these challenges, Arko has been focusing on channel optimization, converting 153 retail stores to dealer sites in 2024, with plans to convert approximately 100 more in 2025. This initiative is expected to generate an annualized benefit of over $20 million. The company’s guidance for 2025 projects adjusted EBITDA to be between $233 million and $253 million, with first-quarter expectations ranging from $27 million to $33 million.
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