SURGW - SurgePays Stock: Don't Double Down (Rating Downgrade)
2024-03-26 04:38:09 ET
Summary
- My previous thesis on SurgePays, Inc. stock was based on its favorable valuation and growth opportunities. However, it hasn't aged well.
- This article discusses the reasons for SURG's heavy dip and potential areas where I was wrong. As a result, I do not recommend to double down here on SURG.
- But even if we imagine SURG's EPS dropping to $0.5 instead of the $1 estimated for 2024, the implied P/E ratio will be ~9x, which still makes SURG relatively cheap.
- As soon as the ACP program is approved and funded again - I think that will happen one day - the stock should theoretically respond with strong growth. The only question is when investors should expect the approval.
- I'm downgrading the stock to "Hold" today, continuing to hold a deeply unprofitable position in the model portfolio until better times.
Intro & Thesis
In early February, I wrote an article about SurgePays, Inc. ( SURG ) stock in which I made the case for buying this stock based on its favorable valuation and growth opportunities. Unfortunately, my thesis has aged badly in a short period:
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SurgePays Stock: Don't Double Down (Rating Downgrade)