Bear of the Day: Jamba (JMBA)

Sometimes a restaurant just knocks it out of the park. The stars align, their timing is right, and everything works out like it’s supposed to. Those times are very rare indeed. Sometimes you’re just in the right place at the right time. As a first-mover in a new, health-conscious juice craze, Jamba (JMBA) had it all figured out. But somewhere along the way, things went south.

That’s why today I’m naming Jamba as today’s Bear of the Day. If you don’t know Jamba, the company owns, operates, and franchises Jamba Juice stores. Its restaurants provide specialty food and beverage offerings, such as whole fruit smoothies, fresh squeezed juices and juice blends, and whole fruit and soymilk or fresh Greek yogurt, as well as various food items, including hot oatmeal, hot beverages, breakfast wraps, sandwiches, Artisan Flatbreads, baked goods, and snacks. The company also licenses its Jamba brand name to sell consumer packaged goods through retail channels, such as grocery stores, warehouse clubs, and convenience stores, as well as online. 

The reason for the Zacks Rank #5 (Strong Sell) is the negative earnings estimate revisions from analysts. Analysts have come out and dropped their EPS numbers for the current quarter and next year., The bearish sentiment has cut the current quarter Zacks Consensus Estimate from breakeven to a 4 cent loss and shrank next year’s number from a 42 cent gain to a 38 cent gain.

Looking at the stock price, shares have been in a steady decline since topping out over $16 in Spring 2015. Since then, a series of disappointing earnings reports have led to selling. After a beat early in 2015, the stock missed earnings six out of the last seven quarters. As you can imagine, it’s been tough finding buyers who are willing to step in and take the risk. Yesterday’s action marked another 52-week low for the stock. If you are on the outside looking in, I’d wait to see some positive estimate revisions before rolling the dice here.

Investors looking for other ideas in the industry should check out a few Zacks Rank #1 (Strong Buy) stocks. These include Bravo Brio (BBRG), Diversified Restaurant Holdings (SAUC) and Papa Murphy’s (FRSH).

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Diversified Restaurant Holdings, Inc. (SAUC): Free Stock Analysis Report
 
Jamba, Inc. (JMBA): Free Stock Analysis Report
 
Papa Murphy's Holdings, Inc. (FRSH): Free Stock Analysis Report
 
Bravo Brio Restaurant Group, Inc. (BBRG): Free Stock Analysis Report
 
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