In the realm of traders and investors, few names are more contentious than XpresSpa (NASDAQ:XSPA). It’s not unusual to witness heated discussions surrounding XSPA stock as this is sometimes considered a love-it-or-hate-it type of investment.
The problem with heated emotions is that they can cloud our judgment. Analyzing XSPA stock effectively requires a cool head and an objective mind-set.
A non-biased view of XpresSpa reveals that it’s been trading at an unusually low price lately. The bears will consider this to be a negative sign, but it could also be an opportunity for contrarian investors seeking a good value.
When a stock has been beaten down more than is necessary, that’s not the time to cut and run. If XpresSpa’s business model remains intact, then XSPA stock could deliver a surprising run-up in the near future.
XSPA Stock at a Glance
There’s one thing that prospective investors should be aware of when it comes to XSPA stock. This one is capable of moving far and fast. As evidence of this, note that XSPA’s 52-week range is 15 cents to $8.82.
Without a doubt, the onset of the novel coronavirus had a profound impact on the XSPA stock price this year. Remember, XpresSpa was previously known as a provider of spa services in airports.
Since airport traffic declined after the Covid-19 outbreak, XpresSpa’s business took a major hit and accordingly, XSPA stock holders suffered substantial losses in March.
Then, the company made a smart move by pivoting its business model towards providing Covid-19 testing services in airports. With that, a surge in the XSPA stock price ensued in June.
It’s fair to say that the XSPA share price went too high, too fast at that time. It’s also conceivable that the retracement has been overdone, with XSPA stock falling below $1.50 in December. Does this price decline mean that XpresSpa’s business is actually in trouble?
Need for Testing Will Persist
As the world grapples with another wave of Covid-19 infections, the overall stock market remains elevated because investors are pricing in the imminent distribution of vaccines.
This is undoubtedly a major factor in the price decline of XSPA stock. However, let’s not assume that the need for Covid-19 tests will simply disappear.
In a business update, XpresSpa evaluated the vast market for the company’s testing services:
There are approximately 30 major U.S. airports with an average of 30,000 employees who support airport activity (“Large Hubs”) airports and an average of 22 million annual travelers. There are also another 30 secondary U.S. airports with an average of 15,000 employees who support airport activity (“Medium Hubs”) airports with an average of 5 million annual travelers.
XpresSpa is making it a priority to address the testing needs of not only these 60 U.S. airports, but also various international airport locations.
Expanding Its Presence
Moreover, by Oct. 9, XpresSpa already had XpresCheck Wellness Centers established at JFK International Airport, Newark Liberty International Airport and Boston Logan International Airport.
If XpresSpa’s business model were really in trouble, then the company probably wouldn’t be expanding. Yet, the company recently announced that it’s opening an XpresCheck testing facility at Phoenix Sky Harbor International Airport.
On top of that, XpresSpa disclosed that it’s constructing an XpresCheck testing facility at Denver International Airport. Clearly, this is a business that’s moving forward irrespective of a possibly soon-to-be-available Covid-19 vaccine.
A low stock price is only really a bad sign when the underlying business is failing.
That doesn’t appear to be the case when it comes to XSPA stock. With XpresSpa’s footprint extending to more and more airports, there’s no compelling reason to bet against the company now.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation.