What Happened?
Shares of financial guidance platform NerdWallet (NASDAQ: NRDS) jumped 4% in the afternoon session after the company announced an increase in its share repurchase authorization from $25 million to $75 million.
The decision, approved by NerdWallet's board of directors, triples the size of the existing buyback program. Share repurchases, or buybacks, reduce the number of a company's shares on the open market. This can increase the value of the remaining shares and often boosts earnings per share (EPS). Such a move is typically viewed positively by investors as it can signal that the company's management believes its stock is undervalued and is confident in its financial future.
After the initial pop the shares cooled down to $10.96, up 3.9% from previous close.
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What Is The Market Telling Us
NerdWallet’s shares are quite volatile and have had 18 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 6 days ago when the stock dropped 3.5% on the news that a government report showed significantly weaker job growth over the past year than initially reported, fueling concerns about the health of the economy.
The Bureau of Labor Statistics announced a preliminary annual revision indicating that the U.S. economy created 911,000 fewer jobs in the 12 months ending March 2025 than previously stated. This significant downward adjustment means the economy added only about half the number of jobs initially reported during that period.
While the revision is a routine process and doesn't reflect current conditions, it has amplified fears of a faltering labor market. Compounding these concerns, a recent Federal Reserve Bank of New York poll revealed that workers' confidence in finding a new job has fallen to its lowest level since the survey began in 2013, raising fears of a potential recession.
JPMorgan Chase CEO Jamie Dimon added that the U.S. economy is "weakening," though he stopped short of predicting a recession. "Whether it's on the way to recession or just weakening, I don't know," he said. Dimon's remarks are closely watched, given his influence as head of one of the nation's largest banks.
NerdWallet is down 18.8% since the beginning of the year, and at $10.96 per share, it is trading 31.5% below its 52-week high of $16 from November 2024. Investors who bought $1,000 worth of NerdWallet’s shares at the IPO in November 2021 would now be looking at an investment worth $387.28.
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