What Happened?
Shares of outdoor lifestyle and recreational products company Solo Brands (NYSE: DTC) fell 54.2% in the afternoon session after the company reported disappointing fourth-quarter 2024 results, which missed Wall Street's estimates on most of the key metrics we track, including sales, operating profits, and earnings.
But the real gut punch was management's warning in their 10-K: there's "substantial doubt" about their ability to keep things running as a going concern. That's the kind of language that keeps investors on edge. They were looking at refinancing options and pushing for operational improvements in 2025, but details were not clear.
Overall, this was a challenging quarter that revealed key uncertainties that the market doesn't like.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Solo Brands? Access our full analysis report here, it’s free.
What The Market Is Telling Us
Solo Brands’s shares are extremely volatile and have had 46 moves greater than 5% over the last year. But moves this big are rare even for Solo Brands and indicate this news significantly impacted the market’s perception of the business.
Solo Brands is down 79.1% since the beginning of the year, and at $0.24 per share, it is trading 90.3% below its 52-week high of $2.50 from July 2024. Investors who bought $1,000 worth of Solo Brands’s shares at the IPO in October 2021 would now be looking at an investment worth $13.74.
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