RMNI Stock Forecast: Latest Price
RMNI Stock Forecast: Bull Case
Increased Share Repurchase Program and Loan Prepayment- In the early week of June 2022, Rimini Street Board of Directors announced an increase in stock repurchase program. Earlier it was $15 million over two years which has been increased upto $15 million over the next four years. Rimini Street Inc is a provider of enterprise software products and services worldwide and third party support provider for Oracle and SAP software products and also partner of Salesforce Inc.
Also another positive news being the company prepaid $5 million of indebtedness before time for its long term loan on May 31st 2022, with no penalty. With this company’s outstanding loan balance is only $81.6 million as of June 2022.
Announcement of new clients – As of March 31st 2022, company has 2884 active clients which is up by 13.1% YoY. Recently, company announced new client in the form of SK Networks, which decided to make Rimini Street its Oracle maintenance partner. Any client addition is a source of revenue in the long term. Also, last year company announced last year that it became an approved supplier of New Zealand Government Marketplace through a Marketplace Agreement. With this, agencies can now can now procure Rimini Street services more easily without negotiating their own contract terms and pricing.
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RMNI Stock Forecast: Bear Case
Dismal Q1 FY 2022-23 financial results- Rimini Street came up with the first quarter earnings report in May 2022 and the investors had a bad reaction to the earnings report and stock tumbled 20% in a single day. Company reported revenue of $87.9 million, which missed street expectations of $88.2 million. On the other hand, company reported EBITDA of $10.7 million and a loss per share of $0.13, which was much lower than $0.06 million in the same quarter a year ago and an estimate of $0.04 per share loss by analysts.
Analysts also reacted negatively and Richard Baldry of Roth Capital slashed the rating from buy to neutral and slashed the target price from $15 to $8.
RMNI stock forecast: Conclusion
Rimini Street Inc is adding new clients and is doing its part in bits and pieces, but the same is not sufficient. We note that in last one-year stock is down by about 19%, as investors continue to punish hard the companies not performing well on the financial grounds.
The recent first quarter was company’s slowest growth since the pandemic began and revenue was almost flat seen on sequential basis. Rimini Street needs to outpace the industry in terms of revenue growth and profitability to turn its stock price in the green territory.
Question and Answers
1. RMNI Stock Forecast 2025
Ans – Rimini Street is support provider for Oracle and SAP and is also in partnership with Salesforce Inc. Looking at the horizon of three years down the line, there are so many growth opportunities for Rimini Street. There has been improved operations and the company has expanded operations into various geographical fronts like we saw the example of agreement with the New Zealand government a year ago in the article and has cleaned up its balance sheet over last couple of years. Prepayment of term loan and announcement of extended share repurchase program tells a lot about the confidence of directors in the company.
I still believe that there is mismatch in the company’s fundamentals and share pricing and this may be due to SPAC model of debuting on the share market. SPAC model is not sustainable for the longer term, even if it does provide short term gains to the investors. The another headwind for the Rimini is the stock dilution, which they have done time and again in the last couple of years.
Recently, company is reported selling 7 million shares at $4.50 per share. The price reported is much lower than the current share price. The good thing is that proceeds of $28.9 million including fees of the sale will be used by the company to further strengthen the business.
There is bright future ahead for the Rimini Street Inc as it partners with companies such as Salesforce and government agencies across borders. Rimini Street can create large value for its customers and in the process for itself. But the company has to come out of woods of short term headwinds like stock dilution and flat growth in the bottom line.
RMNI stock is currently consolidating the zone of $15-5 and the future journey will be based on the approach of the management to deal with the short term volatility.
There is lot more opportunities in front of Rimini and RMNI stock can prove to be a multibagger by year 2025, if the stock can sail through the short term bearish sentiments.
2. RMNI stock forecast: Stock Buy or Sell
Ans – There are few positives and negatives about Rimini Street Inc as a company, but there are more negatives for RMNI stock rather than positives. One of the biggest and foremost is that it has become a penny stock lately. With the recent downfall, stock is only a notch higher than $5. It is trading at $5.98 (as of 11.06.2022). Apart from dismal performance in the financial quarter results, this is another issue with the RMNI stock which cannot be ignored.
The penny stocks are not meant for the retail investors and are only for speculations by the F&O traders. Even if stock does well on the financial front, it has to come out of penny stock zone to make it a buy for retail investors.
In the current global market scenario with inflation fears ramping up and rocking the stock market, it seems that Rimini Street will become a far riskier investment for retail investors. So it will not be wise decision to start fresh buying. At the same time, it is way below its all-time high of $15 and it is punished due to bad global sentiments. Going forward, it can give handsome returns if the sentiment tide turns around. So, it will be wise enough not to sell either, but keep a close watch on the stock and the decision can be changed as and when the stock price falls below $5.
Note: Crowdwisdom360 collates Predictions and data from all over the net and has no in-house view on the likely trends in the Stocks or Crypto Coins. Please consult a registered investment advisor to guide you on your financial decisions.