Urban One Inc (NASDAQ:UONE) has seen a volatile year of trading, with the stock reaching a 52 week high of $54.16 and a low of $0.95. The stock rose to popularity in the Robinhood community after UONE rose 2000% over a months period of trading. The media giant, founded by Cathy Hughes aims to tailor their content to the African American community. According to UONE, the company receives 20 million unique visitors and has reached 82% of the African American community. The black lives matter movement had a role to play with UONE’s historic surge. The BLM protest deflected its message into the US market, with investors buying African American owned companies such as Broadway Financial Corporation (BYFC), which surged over 3000%.Today we will breakdown why UONE is up 90% and how the future looks for UONE investors.
Why is Urban one stock up 90%
Unlike other companies which are traded heavily on press release news, UONE is no stranger to market volatility with no news associated. The strong shift in volume over the past 2 days of trading suggest investors and institutions are buying in for value. Between July and August, the company found equilibrium at $14 before plunging below $4 the month after.
With no related news linked to the surge, we can conclude investors have made a move to acquire UONE as it bottomed out at $3.40. From that price, the upside potential is bullish with average 12 month price targets sitting at $6. Furthermore, the movement towards purchasing more African American owned businesses is likely a contributing factor for the remainder of 2020.
Urban One outlook for investors
Urban one has produced stable revenue returns, averaging $450 million over the past 5 years. However, UONE Q2 results suggested 37% decline in revenue in comparison to 2019 results. Although expected, the poor Q2 earnings will impact the annual results. With an increase in investor interest, the UONE executive management will have a large task ahead to meet shareholder expectations.
“Our cost saving measures remain in place, liquidity is strong with $70 million of cash on the balance sheet, and I firmly believe that Urban One will continue to successfully navigate our way through these unprecedented times.” Alfred C. Liggins III, CEO
We await UONE’s Q3 earnings to assess how they have adapted to the ever changing COVID-19 environment. The UONE stock will likely remain volatile as volumes continue to fluctuate through the remainder of 2020. With minimal price targets from analysts, the long term future of the stock is highly up for debate.
The information above is not financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.