Exela Technologies (NASDAQ:XELA) Stock Sees Heavy Selling Pressure: Down 11%
Shares of Exela Technologies (NASDAQ:XELA) on November 5, 2021 plummeted after reporting disappointing quarter three earnings. Exela missed out miserably on revenues, worrying investors on the prospects.
Market Stats
On Friday, XELA stock decreased 11.47% at $1.7750 with more than 27.98 million shares, compared to its average volume of 22.30 million shares. The stock has moved within a range of $1.7600 – 1.9250 after opening the trade at $1.9200.
Major Trigger
The Business Process Automation firm came out with quarter three numbers, covering the time ending September. While the Earnings per share beat street estimates at a loss of $0.09, the revenues tanked badly in the quarter. Exela’s sales were $279.2 million, lower by 8.5% year over year, missing the estimate of consensus by $36.5 million.
However, the management is hopeful on improving cash flows by generating $50 million in 2022. This is essential since the firm has $1.355 billion in debt with negative operational cash flow since last one year. The company needs to start generating profits for paying back its debt.
Investors did not like the lowering of revenues during the quarter as it demonstrates its inability to revive business. Exela Technologies has a market capitalisation of $261 million, which may seem good considering that the management is looking to turnaround the business. Yet, the debt on balance sheets vis-à-vis revenue and profits it generates makes the it only wise for investors to avoid the stock currently, as per suggestions from investment community.
Key Quote
“We are focused on executing our strategy to speed up capital deployment, debt reduction, cash flow improvement, investing in our business for stabilizing performance, and growth. We will continue to take steps to restore and expand shareholder value,” said Ronald Cogburn, Chief Executive Officer of Exela.
Traders Corner
XELA stock is trading below the 20-Day and 50-Day Moving averages of $1.87 and $1.98 respectively. Moreover, the stock is trading below the 200-Day moving average of $2.21. The stock is down 41% in the past 3-month.
