Please ensure Javascript is enabled for purposes of website accessibility

Why Express Stock Was Screaming Higher Today

By Jeremy Bowman - Mar 8, 2021 at 4:09PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shares of the apparel retailer got another boost from the WallStreetBets crowd.

What happened

Shares of Express (EXPR -5.56%) soared Monday along with other WallStreetBets stocks such as GameStop and Koss, as day traders appeared to pile into the same names that have been popular in the Reddit group since the beginning of the year.

There was no company-specific news out on Express. However, the market is more broadly rotating out of high-value tech stocks and into value plays that are likely to benefit from the economic reopening -- a category that includes apparel retailers like Express. The company will also report fourth-quarter earnings on Wednesday morning, and strong results could support Monday's gains.

The stock closed the session up by 61.8% on high-volume trading, with the average share changing hands more than once.

Women walking down the street in an Express ad

Image source: Express.

So what

So far, 2021 been a roller-coaster year for Express as the mall-based apparel chain found itself the object of a Reddit-fueled short-squeeze in late January. As you can see from the chart below, the stock gave back nearly all of its gains from that rally. Now, it seems to be trying to mount a second burst, although there is has been no change in the company's fundamentals.

EXPR Chart

EXPR data by YCharts

Like other stocks that have attracted the interest of Reddit traders -- GameStop and AMC Entertainment among them -- Express is a well-known name among consumers that's trading in the penny-stock range with a significant percentage of its float sold short (as much as 13% back in January).

Now what

Express shares could continue to run higher in the short term, but as with the surge in January, there is little fundamental support for a higher valuation. Therefore, whatever gains the stock makes are likely to largely disappear when more savvy traders sell to take profits.

As for the earnings report later due this week, analysts are expecting to hear that fourth-quarter revenue fell by 30% to $424.7 million, and predicting a loss of $0.82 per share  compared to adjusted earnings of $0.19 per share a year prior. Investors will be paying close attention to the company's guidance, as well as anything management has to say about a prospective sales recovery as more Americans receive COVID-19 vaccines.

Given the share price volatility we're seeing ahead of the report and the attention Express is getting from WallStreetBets traders, expect the stock to swing big one way or another on Wednesday.

 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Express, Inc. Stock Quote
Express, Inc.
EXPR
$3.40 (-5.56%) $0.20
GameStop Corp. Stock Quote
GameStop Corp.
GME
$99.19 (8.43%) $7.71
AMC Entertainment Holdings, Inc. Stock Quote
AMC Entertainment Holdings, Inc.
AMC
$13.08 (2.51%) $0.32
Koss Corporation Stock Quote
Koss Corporation
KOSS
$6.31 (5.17%) $0.31

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
327%
 
S&P 500 Returns
116%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/20/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.