Why ATI Physical Therapy's Shares Jumped 26.1% in August
Shares of ATI Physical Therapy (NYSE: ATIP) climbed 26.1% in August, according to S&P Global Market Intelligence data. The company, which just went public in June with an initial public offering (IPO) via a special purpose acquisition company (SPAC), opened at $3.36 a share on Aug. 2, the first trading day of the month, and closed at $4.30 a share on Aug. 31. The big jump for ATI's stock came early in the month. On Aug. 3, it opened at $3.74 and closed at $4.50.
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The stock's improvement in August had a lot to do with a reaction to an overreaction. Investors were overly concerned when ATI downgraded its forecast in its second-quarter earnings report on July 26, saying it expected yearly revenue to be between $640 million and $670 million, compared to earlier predictions of $731 million. It also said it expected adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) to be $60 million to $70 million, when it had earlier said it was expected to be $119 million. On top of that, the company said it was having difficulty with a labor shortage, which would slow its rate of opening new clinics.
Source Fool.com
