Bear of the Day: Gorilla Tech (GRRR)

You ever watch one of those stocks where the name promises something big and fierce, but the chart looks more like a sleepy house cat? That’s the situation with Gorilla Technology (GRRR) and why it’s today’s Bear of the Day.

In a market that’s rewarding companies with clear earnings trends, expanding margins, and transparency in operations, Gorilla Tech sits on the other end of the spectrum. Analysts have been slashing their earnings estimates, taking this stock out of the running for any near-term leadership. When you start seeing revisions moving in the wrong direction, and multiple of them, that’s when the Zacks Rank steps in and waves a giant red flag.

Over the last week, analysts have cut earnings estimates for both the current year and next year. The bearish sentiment has dropped our Zacks Consensus Estimate for the current year from 97 cents to 84 cents while next year’s number is off from $1.20 to 93 cents. That’s the reason why the company has retreated down to a Zacks Rank #5 (Strong Sell).

Two earnings misses in a row have this stock retreating. The most recent quarter, EPS came in 2 cents shy of expectations. The quarter before that, the company missed by 33 cents with a disappointing 20 cent loss on expectations of a 13-cent profit.

Gorilla Technology Group Inc. Price and Consensus

Gorilla Technology Group Inc. price-consensus-chart | Gorilla Technology Group Inc. Quote

The good news for bulls though, is that the PE has now contracted to the point where it’s beginning to look more like a value play. Trading at 15.6x earnings is cheap compared to the broad market average of 24.24x.

Gorilla is in the Technology Services industry which ranks in the Top 31% of our Zacks Industry Rank. There are several names within the industry which are in the good graces of our Zacks Rank. These include Zacks Rank #1 (Strong Buy) stocks GigaCloud (GCT) and LiveRamp (RAMP).

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This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research