Shares of delivery company Waitr Holdings (WTRH 6.00%) rose on Monday, thanks to a bullish shout-out from a Wall Street analyst. The stock had fallen over 50% from 52-week highs but it's gaining some of that back today. As of 11:20 a.m. EST, Waitr shares were up almost 9%.
In the delivery market, much attention is given to companies like DoorDash and Grubhub. For that reason, Deutsche Bank analyst Kunal Madhukar believes Waitr is underappreciated and undervalued. According to The Fly, he raised his price target on Waitr stock to $4 per share, representing about 25% upside from where the stock opened this morning.
The analyst believes Waitr has optionality when it comes to the future. This is demonstrated by the company's recent cannabis announcement. Up until now, Waitr has been a food-delivery company. But it announced that it's jumping the legal hurdles to be able to deliver cannabis to its users. Things like this could give Waitr more use cases going forward, and therefore, more chances at revenue growth.
Waitr started 2020 as an obscure penny stock. It began surging higher as investors anticipated a stellar year for delivery because of the COVID-19 pandemic. However, this stock can be volatile. For example, shares sold off in the second half of 2020 as hurricanes ravaged the Gulf Coast -- Waitr's primary market -- even though its revenue grew over that time.
Expect Waitr's management to give investors more than just a news headline when it reports earnings after the market closes this afternoon. How it performed during the last quarter and how it expects to do in 2021 will be more material to shareholders than any price target an analyst sets.