• BBBY shares are up more than 11% in Monday premarket.
  • Bed Bath & Beyond stock has gained 153% in the past month.
  • Loop Capital gives a price target of $1.

Bed Bath & Beyond (BBBY) stock has gained more than 11.6% to $14.45 in Monday's premarket three days after Friday's surprise 21.8% advance. The wheels keep turning on this one with the meme stock story set to continue this week. The meme stock looks to be on the cusp of bankruptcy, but do not tell the its retail supporters that. They have been successful in pushing the home goods retailer up 153% in the past month due to a short ratio near 42%.

Also read: Exxon Mobil Deep Dive: Falling oil prices lead to $94 price target

BBBY stock news

Bed Bath & Beyond looks to be in bad shape. That is if you ignore its recent share price action. BBBY stock surged again on Friday by nearly 22% to $12.95. This price surge is owed entirely to retail traders aiming for a short squeeze. 

Friday's price spike came even as Loop Capital's Anthony Chukumba reiterated his sell rating and price target of $1. Chuckumba said Bed Bath & Beyond appeared to be heading for the same death spiral as Sears and Borders before it.

The retailer lost about $224 million in operating income during the fiscal first quarter and had just $107 million in cash in the bank. Chukumba said this may force suppliers to tighten payment options for the retailer, which could make the situation even worse. Raising more equity may be the only option, which would of course send the stock price down harshly.

Bed Bath & Beyond is set to deliver fiscal second quarter 2023 earnings on September 28. Wall Street is expecting GAAP earnings per share of $-1.59 on revenue of $1.5 billion. This is much better than the $-4.49 GAAP EPS results delivered in late June. Due to that poor quarter, then CEO Mark Tritton was fired from his job, and board member Sue Gove became interim CEO.

Besides Gove, BBBY has hired a new chief accounting officer and a new head of investor relations. The general strategy seems to end the retailer's white labeling strategy and go back to carrying popular name brands. Stores these days, which shows a 23% decline in comparable sales in fiscal Q1, are offering near constant discounts.

The photo showcases a Bed Bath & Beyond store with some items on sale for 50% off.

BBBY stock forecast

BBBY stock has impressively made it above the 100-day moving average. Friday's massive jump put it back in league with the August 8 high. Now with the premarket pushing ahead above $15, bulls may make a run at the $17 resistance zone from the first half of April. The Relative Strength Index (RSI) is well above the overbought line, so expect this one to plummet when the rally ends. When it does, expect BBBY to drop back to the 50-day moving average, which is currently at $6.53.

BBBY stock price chart

BBBY daily chart

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