The Bubs Australia Ltd (ASX: BUB) share price faced a difficult 12 months amid COVID-led channel disruptions. This caused volatility across the sector as investor confidence continued to weigh down the company’s shares.
At the time of writing, the infant formula company’s shares were edging 1.05% into the green at 48 cents apiece. It’s a sharp contrast from when Bubs shares were trading around the $1.40 mark before the pandemic began.
How is Bubs performing to date?
In its annual general meeting presentation released on 30 November, Bubs highlighted a turnaround to accelerated growth.
Responding to rapidly changing market dynamics, Bubs quickly adapted and returned the business to strong revenue margins in Q1 FY22.
As such, the first three months of the new financial year brought in revenues of $18.5 million. This represented a 45% increase on the previous quarter and a 96% lift on the prior corresponding period.
Bubs attributed the record sales volume to its growing brand awareness and market expansion. Strategic focus was placed on providing resilience, diversification of its customer base, and efficiencies across the entire business.
What’s ahead Bubs shares?
As my Foolish colleague Tristan pointed out late last month, Bubs has received a “buy” rating from multinational investment bank Citi.
Its team of analysts put a 12-month price target for the infant formula company at 58 cents per share. This implies an upside of around 22% based on the current Bubs share price.
The broker noted the robust recovery with Bubs’ operational action plan currently ahead of schedule. Key priorities include specialty dairy focus, margin improvement, daigou 2.0, and rebalancing inventory levels.
Bubs share price summary
It’s been a challenging year for Bubs shareholders, with the company’s shares falling around 15% over the past 12 months.
Since hitting a low of 31.5 cents in May, the company’s shares have continued their rollercoaster ride.
Based on valuation grounds, Bubs commands a market capitalisation of around $294 million.
The post Can the Bubs (ASX:BUB) share price bounce back in 2022? appeared first on The Motley Fool Australia.
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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended BUBS AUST FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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