Shares of Gorilla Technology Group Inc. GRRR witnessed a 3.6% climb on Monday after a 30.4% drop last Friday. The company had to take several actions to address shareholder concerns and market volatility. These efforts were aimed at stabilizing market sentiment, strengthening investor trust and demonstrating the company’s long-term growth potential. It is to be seen how the investor community reacts to these clarification efforts.
GRRR expanded its share buyback program from $6 million to $10 million, emphasizing its belief that the stock is undervalued and aiming to boost investor confidence. Earlier, it was planning to boost the program to $9 million. It has already utilized $3.8 million of its $6 million share repurchase program.
Gorilla Technology highlighted its strong financial position, including $47 million in cash reserves, and addressed misconceptions about its cash flow, pointing out significant upcoming payments and a robust project pipeline. It reiterated its project pipeline of more than $2 billion spanning multiple years, setting the stage for consistent revenue streams and long-term growth.
The company clarified that the recent stock dilution was due to previously disclosed conversions of preferred shares and warrant exercises, not new equity issuance. It refuted allegations that it relies heavily on a single client, emphasizing a diverse and growing pipeline of contracts across multiple sectors and regions.
The company outlined progress on major projects, including smart city developments and AI contracts, while reporting a strong project backlog of $93 million. Gorilla Technology is committed to moving to quarterly financial reporting in 2025 and explained limitations in private share buybacks due to securities laws.
GRRR stated it had gathered evidence suggesting its stock might be subject to illegal market manipulation activities and has repeatedly reached out to the U.S. Securities and Exchange Commission to address these concerns but has seen little progress in the investigation so far. It will likely continue to push regulators with evidence to investigate activities that could harm shareholders.
GRRR Price Performance
Shares of Gorilla Technology have gained 127.3% in the past year, outperforming the industry’s 45.4% increase.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Gorilla Technology currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Business Services space are Coinbase Global, Inc. COIN, First Advantage Corporation FA and GigaCloud Technology Inc. GCT. While Coinbase currently sports a Zacks Rank #1 (Strong Buy), First Advantage and GigaCloud carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Coinbase’s current-year earnings of $5.59 per share indicates a massive jump from the year-ago level of 37 cents. COIN beat earnings estimates in three of the trailing four quarters and met once, with the average surprise being 341.4%. The consensus estimate for current-year revenues is pegged at $5.85 billion, implying 88.1% year-over-year growth.
The Zacks Consensus Estimate for First Advantage’s current-year earnings is pegged at 88 cents per share, which remained stable over the past month. FA met earnings estimates in two of the trailing four quarters, beat once and missed on the other occasion, with the average surprise being 0.2%. The consensus estimate for current-year revenues implies 14.4% year-over-year growth.
The consensus estimate for GigaCloud’s current-year earnings is pegged at $3.10 per share, signaling a 34.8% year-over-year increase. It beat earnings estimates in three of the trailing four quarters and missed once, with the average surprise being 38.1%. The consensus estimate for GCT’s current-year revenues implies 64.1% year-over-year growth.
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