One of the most impressive five-day charts in the market right now belongs to Accolade (NADSAQ:ACCD). After falling approximately 50% in Friday’s session, shares of ACCD stock have rebounded in dramatic fashion today on an analyst upgrade. Currently, Accolade investors are seeing an increase of more than 20% in late-afternoon trading.
Last week’s move came on the heels of a rather disappointing earnings miss. The company reported a loss which grew to $34.6 million this past quarter, or 51 cents per share. Analysts had expected a loss of 40 cents per share.
While the company did beat on the top line, this sort of earnings disappointment is something the market doesn’t appear to be in the mood to congratulate. As interest rates rise, valuations of high-growth stocks have taken a hit. Accordingly, this risk-off market is one which is hitting tech companies like Accolade the hardest.
Additionally, in this earnings report, Accolade noted it would be losing one of its large customers at the end of this year.
With this backdrop, let’s look at why Accolade is rebounding nicely today.
Why Is ACCD Stock Up Today?
Sometimes, a harsh selloff can become a reason for investors to get interested. At least, that’s what Wells Fargo analyst Stan Berenshteyn pointed out in a recent report.
This analyst upgraded his view on ACCD stock to “equal weight” from “underweight,” while also cutting his price target to $6 per share from $9. This price target cut follows other similar cuts from analysts following the company’s earnings. However, Berenshteyn’s rather constructive view on Accolade provides some light at the end of the tunnel for bulls.
In the view of this analyst, there’s a rather compelling risk-reward argument to be made for ACCD stock. That’s an intriguing view for growth investors looking to scrape the bottom of the barrel during this selloff.
That said, with multiples coming down, it’s entirely possible the selling pressure with this stock isn’t over. Today, some investors appear to believe they’ve found a stock worth buying up at these levels. Time will tell if they’re right.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
