Investors in GNC Holdings (NYSE: GNC) have been on a roller coaster ride from an all-time high of $60.56 in 2013 down to current levels of $7.40. Former CEO Michael Archbold hoped to quell fears of slowing demand for specialty retail through a debt-fueled share repurchase initiative that, combined with a large write-down in Q4 2016, has landed the company in the dreaded "negative book equity" zone. Many short sellers have already made a killing on the stock, helping push the price down to the lowest levels in its history.
Source: Yahoo Finance, Author model
The million-dollar question, of course, is whether this historic low for GNC's stock is a bottom or just another stair step on its way even lower. A consensus target price in the ballpark of $9 a share (Nasdaq) indicates that sell-side analysts on Wall Street have at least some faith in Mr. Moran's turnaround story, and associates at stores across North Carolina seem to agree. Large insider purchases over the past few months also suggest management's confidence in the "One New GNC".
