Are Office Depot Inc. (NASDAQ:ODP) Shares Headed For A Correction?

Office Depot Inc. (NASDAQ: ODP) was one of the biggest movers in the recent trading session, with the company’s stock currently changing hands at 0.03 points up or 1.24% higher on the previous close. So what do we make of this stock that is clearly one of the hottest on the market now? The ODP stock is trading at $2.45 from a close of $2.42 on 01/15/20. The day’s price range saw the stock hit a low of $2.39, while the highest price level was $2.46 during the intraday trading.

Is the ODP stock going to continue the plunge or will it steady in coming sessions to climb above its 5-day high price of $2.48. Office Depot Inc. (NASDAQ: ODP) has a 52-week price range of between $1.23 and $3.82. Notably, the reduced performance in the current session comes on the back of condensed market activity for the stock, as its daily trading volume to 3709236, compared to its 3-months daily average volume of 6.54 million. In comparison, the average volume for the last 50 days stands at 6,973,380.

What about the stock’s price forecasts? ODP had 4 analysts who offered their 12-month price predictions for the Office Depot Inc. shares. The group has given the stock a consensus price target of $1.60, with the lowest forecast being put at $1.40. The highest estimate by the 4 analysts is $1.80. The median price target estimate of $1.60 for the stock represents a -53.13% fall in value from the previous price of $2.45. Looking at the 52-week price ranges, the stock’s current price level is 99.19% from its 52-week high price and -35.86% down from its 52-week low in the same period.

Office Depot Inc. shares have plunged 0.00% over the past week, but its 1-month performance is in the red at -0.20%. Its performance in the current quarter is up 29.97%, while that figure shoots to 21.29% over the past half-year period. Further, we see that the stock’s 12-month charts show that it has lost by -17.79%, with the year-to-date prices down by -10.58%.

The company has a market cap of 1.38 billion and a return on assets (ROA) of 0.40%. In gauging how profitable company analysts and investors look at the respective company’s ROA, with returns above 5% generally regarded as good. Also important is the company’s return on equity (ROE), with ODP’s at 1.40% indicating that the management is able to generate impressive income with whatever equity at their disposal. If you put your money on this stock, then a forecast ROI is at 4.90%.

But what do Wall Street analysts tracking this stock recommend, given that it has 561.53 million shares outstanding? 4 analysts polled have a consensus recommendation rating of 1.50, indicating that ODP is a Underweight stock at the moment. This mean rating was at 1.50 a month ago. BofA/Merrill called it a Underperform stock on August 20, 2019, while BofA/Merrill rated it a Underperform in its note released on May 09, 2019. Of the 4 analysts, 0 analysts rate the ODP stock as Overweight, while 1 of them rated it as a Hold. 0 analysts rate Office Depot Inc. as a Buy, while 1 suggested its Underweight. Only 2 analyst advised investors to sell.

Let’s glean at the company’s earnings forecasts for the current quarter and annual growth estimate for the next 5-year period. The analyst forecasts for this stock’s earnings per share (EPS) for the current quarter (Dec 2019) ranged from a low of $0.08 per share to $0.09 per share. The average estimate by the 3 analysts for the ODP shares was $0.09 a share, while the company’s last-quarter results returned an EPS of $0.08. Looking at the current EPS trends, seven days ago, ODP had its Dec 2019 estimates at $0.09 per share while the stock’s EPS was forecasted at the $0.09, a month ago. The annual earnings per share growth for the next five years is estimated to be 11.90%, which compares to the 0.10% recorded in the past five-year period.

Let’s briefly check out revenue growth estimates for the company, which is put at -1.70% in the current quarter. However, the next quarter should see net revenue growth of over -3.80%, with analysts forecasting the company’s 12-month growth estimates at -2.80%. 3 analysts have forecast that Office Depot Inc. will see its revenue growth net between $2.58 billion and $2.67 billion for the current quarter. The next quarter should see revenue returns of between $2.65 billion and $2.65 billion.The average revenue for the quarter is expected at $2.62 billion, while for the next quarter, it jumps to $2.65 billion. Sales growth for the year are estimated at -2.80%.