Weber Stock News and Forecast: What is next for WEBR stock after it catches fire?

Weber stock (WEBR) was on fire on Thursday. Just in case you missed my ingenious reference, Weber is a barbeque grill maker. It sells some pretty nice units, and this author uses one in the summer months. That does not hide the fact that the last set of earnings were not good. With high short interest, reportedly over 50%, WEBR stock caught the attention of retail meme traders though who are looking to engineer a short squeeze. It remains to be seen whether the collapse in a similar strategy across BBBY stock tames the enthusiasm for WEBR. For now, it is smoking hot (see what I did there!) as the stock is up 7% in Friday's premarket.

Weber stock news

First, let us go back in time but not too far. Earnings were posted on August 15, and EPS missed while revenue was slightly ahead of forecasts. Despite revenue being ahead, it still declined by about 20% YoY, and the margin collapsed. Gross margin nearly halved on the back of foreign currency charges, supply chains and inflationary problems. Immediately after the earnings, Weber's management outlined plans to cut costs and suspend the dividend payment. Despite this, the stock began to trade notably higher and closed up 16% on Tuesday. Wednesday was a new day, and the fire appeared to be going out (stop me, editor, please!) as Citi downgraded WEBR. It closed 7% lower. As retail traders bailed out of BBBY, some appeared to turn their attention to WEBR stock. It trended on social media and closed Thursday up 27% but at one point was trading 40% higher on Thursday.

Weber stock forecast

A trend has emerged. Retail traders are looking at poorly performing companies with understandable heavy short interest. They then attempt a squeeze before it eventually comes back to earth. The actions are no different here, and in my opinion this has definite short potential. The key aim is always timing. When does it begin to turn? Getting short in the middle of a short squeeze can be painful.

Retail has a lot of firepower, so the key is to look for that firepower to start stalling. So far there are no signs of that, but given the high debt load of the company it seems inevitable that it will. Failure to break above Thursday's high at $11.64 is the first sign. The second is a close on Friday lower than the premarket spike or intraday spike. $12 is pretty decent resistance, so it may struggle to get squeezed above that level. 

WEBR daily chart