Boxed stock price has crawled back in the past few days as investors go bargain hunting. The BOXD share price is trading at $2.74, which is the highest it has been since June 8th. It has risen by more than 114% from its lowest level this month, bringing its total market cap to more than $180 million.
Bargain hunting
American stocks have been in a strong downward trend in the past few months as concerns about valuations, inflation, and actions by the Federal Reserve.
The decline has been brutal, with the Nasdaq 100, S&P 500, and Dow Jones crashing by more than 20% year-to-date. While this trend has been painful, it has created awesome opportunities for investors to go bargain hunting.
Boxed is one of those stocks that investors are collecting. The stock has more than doubled in the pas few weeks. Still, it about 83% below the highest level on record.
For starters, Boxed is a tech company that is disrupting the wholesale industry. The company offers a web platform where customers can buy household products in bulk and save money. It then delivers the products through its partnership with FedEx.
Boxed is different from Costco and Sam’s Club because it is an online-only company. And most importantly, it does not have membership fees, making it affordable to all customers.
The most recent results showed that Boxed is seeing strong growth even as inflation continues to bite. Its total revenue in the quarter rose by 14.1% to $46.6 million. This increase was mostly because of the company’s business-to-business demand. Its retail segment had a revenue of over $44.4 million while its software business made $2.2 million in revenue.
Is Boxed a good buy?
The company also made strides to become profitable. Its gross profit rose to $6.1 million in the first quarter as its margin increased to 13.1%. It expects to boost these margins through its partnership with FedEx. Still, its net loss rose to $36.2 million. It has $72.7 million in net cash and no debt.
A case can be made that Boxed is a good stock to buy since it is resonating with the young people. It is also disrupting a significantly large industry that is currently dominated by large firms like Costco and Walmart. Most importantly, its B2B business is seeing strong growth. Another notable fact is that the firm’s insiders are buying the stock despite the recent crash.
Still, it faces numerous challenges such as the fact that it is burning cash. As a result, it will need to raise money in the coming months, which will dilute current investors.
Boxed stock price forecast
The four-hour chart shows that the BOXD stock price has been in a strong bearish trend in the past few months. The sell-off accelerated when the shares moved below the important support level at $7.86, which was the lowest level in May and March.
Boxed share price is still below the 25-day and 50-day moving averages. Now, the stock seems like it is forming a rounded bottom pattern, which is usually a bullish sign. As such, there is a likelihood that the stock will bounce back as investors buy the dip. If this happens, the next key resistance level to watch will be at $5, which is between the resistance at $7.86 and the YTD low of $1.28.
