Poshmark Stock Pelted With Bear Notes After Dismal Q1 Forecast

Several analysts slashed their price targets

Digital Content Manager
Mar 23, 2022 at 9:25 AM
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The shares of Poshmark Inc (NASDAQ:POSH) were last seen down 9.6% to trade at $12.50, following a mixed fourth-quarter earnings report. While the online clothing resale platform posted revenue that beat expectations, its losses of 19 cents per share for the quarter came in just below estimates, and well below the earnings per share (EPS) of 5 cents reported this time last year. Further weighing on POSH is the company's dismal first-quarter revenue forecast, which fell well below analysts' expectations. Poshmark pointed to Covid-19 disruptions and waning federal stimulus for its poor performance. 

The brokerage bunch was quick to chime in. No less than four analysts slashed their price targets this morning -- the lowest coming from Guggenheim to $13. Heading into today, sentiment surrounding POSH was lukewarm. Of the 11 in coverage, seven say "hold," compared to four "buy" or better ratings. On the other hand, more price-target cuts could be on the way, as the 12-month consensus price target of $17.83 is a 42.6% premium to current levels. 

Short sellers were piling on ahead of the event, with short interest up 9.2% in the last two reporting periods. These bears are now firmly in control, as the 4.29 million shares sold short make up 9.4% of the stock's available float, or nearly a week's worth of pent-up buying power. 

Options traders, meanwhile, have taken a bullish stance. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), 4.75 calls have been picked up for every put during the past 10 weeks. This ratio stands higher than 86% of readings from the past year, suggesting a healthier-than-usual appetite for long calls of late. 

Echoing this, the stock's Schaeffer's put/call volume ratio of 0.18 sits higher than just 15% of other annual readings. This implies short-term options traders have rarely been more call-biased during the past year. 

Things haven't looked good for POSH from a technical standpoint. The security has been caving to pressure at several of its short-term trendlines for nearly a year. This includes the 60-day moving average, which has rejected several rally attempts since July. Today, POSH is set to open back near its March 15 record low of $10.65, adding to its 69.7% year-over-year deficit. 

 

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