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Advantage Solutions Inc (ADV) stock plunged in the premarket; here’s why

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In the premarket, Advantage Solutions Inc. (ADV) stock plunged by -6.52% to the price of $11.75 at the time of writing. ADV stock closed the previous session at $12.57 which is a loss of -2.33%. The ADV stock volume traded 0.26 million shares. The average volume of the stock traded for the past 3 months is 565.22k. For the past year, ADV stock soared by 13.24%. However, in the past week, it dropped down by -3.01%.

The operational background of Advantage Solutions Inc

Advantage Solutions is a sales and marketing services company that specifically focuses on outsourcing its expertise its sales and marketing services to clients. The company is deployed strategically in certain markets of Asia, Europe, Australia and Africa – here it employs its global scale services for the needs of MNCs. The company itself is headquartered in California and has offices spanning across North America.

This company has certain clients that belong to the consumer goods manufacturing and retail companies. ADV stock is an expert in its field and brings along high-quality insights along with high-class execution. The company executes multi-channel services that are inclusive of retail merchandising, e-commerce, business intelligence, and full suite of sales and marketing services through which it helps grow the customer demands and increase efficiency of operations along with other customized channels.

The recent activities that took place in the company

On 19th April 2021, Advantage Solutions Inc. announced that will release its first-quarter 2021 earnings report update which will take place after the market’s trading session closed on Monday on the date of 10th May. Afterwards the company will hold a conference call which will take place after 5 pm on Monday the same day.

On 19th March 2021, Advantage Solutions Inc. sent its team of management that had participated in the Summit of Jefferies Virtual Business Services. This Jefferies Virtual Business Services will as the name suggest, take place virtually.

Financial report for the fourth quarter and full 2020

Prior to the first quarter 2021’s earnings report, ADV stock released its financial report for the fourth quarter and full-year which ended on 31st of December 2020.

The company overall faced a decline in its revenues. This was majorly due to the pandemic which caused a significant sector of the company’s business to be suspended or partially operating. However, there is some bright news as the company adjusted its operational strategy which allowed EBITDA to exceed the company’s expectation which had been set to $480-485 million after being revised from 475 million estimates. Now the actual adjusted EBITDA has delivered 487 million for the year 2020.

The highlight of the fourth quarter 2020 was such that the revenues had declined by $162.5 million to 850.4 million compared to the fourth quarter of 2019. Along with the adjusted EBITDA which was 132.5 million for Q4 2020 (decline of 8.2% from Q4 2019), the net loss was $138.9 million for the fourth quarter of 2020 compared to $153.7 million in 2019 Q4.

Expectation for the adjusted EBITDA 2021

As the restrictions of the pandemic and news of vaccine development has allowed the business to steadily return to full operation, the company has adjusted its EBITDA for the year 2021 to $515-$525 million compared to just $515 previously defined.

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