Need proof that markets are inefficient when it comes to pricing? Look no further than how
Yesterday, AMMO posted excellent results for its FY2022 Q2 that ended
That's not all. Nearly every financial metric was impressively higher. Net revenues increased 408% to
AMMO Earnings- A Lot To Like (Love)
Still need more data to support a bullish proposition. How about the fact that diluted EPS reached
Still hungry for the positives? AMMO posted a spike in Adjusted EBITDA to
Thus, to those selling the news- go ahead. It potentially makes shares cheaper for those that appreciate compelling value investment opportunities. This one in AMMO is too good to ignore. Management even said so. And those that follow AMMO know that the company habitually delivers on its intent and message. Thus, when they say that momentum remains very strong across its entire business, believe it.
The message is even more powerful when they have a historical precedent to back up its expectations. Its FYQ2 set another quarterly record that exceeded estimates for revenue and Adjusted EBITDA. And not only record-setting, but the company said that trends accelerated in the second quarter with ammunition revenue increasing 360%. In addition, the market is strong, and pricing power is on AMMO's side.
Better still, its marketplace revenue growth is steepening, driven by increases in the number of bids, items sold, and average ticket amount. That's coupled with significant increases in adoption rates for its new loyalty program. Margins continued to expand significantly as well, driven by growth in its marketplace segment and from scale-related efficiencies and capacity increases in its core ammunition business. In addition, AMMO announced another new
Revenues Are Great, Earnings Are Better
The contributions from each led to Net revenues of
Breaking down the totals, ammunition sales totaled
Notably, the Gross profit margin was 43.0% in the second quarter, compared to 10.7% in last year's second quarter, due to the impact of AMMO's higher-margin marketplace revenue. The second-quarter gross margin improved 30 basis points on a sequential basis, reflecting the rising mix of revenue contributions.
Expenses were well in line with expectations and actually added to the bullish thesis. Operating expenses were
As noted, Operating income was impressive, reaching
Again, for those measuring value on Adjusted EBITDA, AMMO posted a sharp rise, reaching
Take Quick Advantage Of Market Foolishness
Thus, shares trading lower shows just how imperfect a market can be. Apparently, the days are long gone of the buy quality and hold mentality.
But, at the end of the day, that's okay. What will never change is that fundamentals, earnings growth, and top management will always win out in the trading world. Valuations do eventually connect. Thus, while institutional investors may shake the tree on the retail class, expect them to return to scoop up shares of great companies that are making performance statements loud and clear.
Hence, while long's are disappointed that the very same investors entrusted to invest their money can sell on a financial update as strong as AMMO's, with glowing guidance, know this- any decline in AMMO stock will likely be short-lived. There's not a single part of the earnings presentation that should go underappreciated. Moreover, when AMMO says to expect the company to post upwards of
Bottom line- stay long. Day trade elsewhere and think about backing up the truck on any AMMO stock weakness. They have earned that consideration.
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