Jamba Looks Strong After Higher Guidance, Stock Up Sharply

Jamba Inc.

Jamba Inc. (NASDAQ:JMBA) stock soared nearly 20% after the company announced solid results for the fourth quarter. Additionally, higher than expected guidance for next year added to traders sentiments.

Jamba stock currently trades around $8.60 per share. JMBA shares were among the major losers over the last three years. The company blamed tough market dynamics and increasing competition for the huge decay in stock price.

Jamba Inc. share price plunged 50% in the past three years. The stock has the 52-week trading range of $6.71 – $10.44.

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Jamba Inc. Business Strategies Could Return Investors Confidence

Jamba posted a comparable store sales growth of 5.3% in the final quarter; its best quarterly sales results in the last two years. The company’s smart business of injecting industry talent and expertise into critical roles across the organization supported the sales growth.

Jamba Inc. exited several underperforming business units but increased it’s drive-thru locations which improved profitability.

The company now expects to increase the new domestic drive-thru stores in 2018. The percentage of the new domestic store will increase to 25% in 2018 from 10% in 2017.

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Overall, its strategy of capturing the long-term benefits by investing in higher value formats seems to be working.

Its CEO said, “In 2018, we will continue to focus on improving the customer experience, driving transaction growth, and increasing store level margins. With these improvements, we plan to expand our global store footprint and continue to enhance this iconic brand.”

Strong Cash Position Support Business Strategies

The company ended the quarter at $10.0 million, compared to $7.1 million in the previous quarter. It had also not drawn against its line of credit. Moreover, the company anticipates better revenue and earnings next year, which will add to its cash generating potential. It expects revenue in the range of $68M to $70M in 2018, while the adjusted EBITDA is likely to stand around $15M to $16M.

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