WeRide Inc. (NASDAQ:WRD) has seen a massive amount of interest today from investors around the world after it announced what could only be called a large share repurchase program given its size.
The robotaxi company confirmed in a press release issued this morning that the board of directors has approved buybacks up to the value of $100 million over the next twelve months.
WRD’s shares rose nearly 30% following the announcement of the buyback on Wednesday.
What is the significance of WeRide stock purchase announcement?
WeRide’s stock-repurchase program is an important development for investors, as the buybacks reduces the number of WRD outstanding shares.
The earnings of the company would be distributed over fewer shares in the future, thus resulting in a higher Earnings Per Share (EPS), which often drives the stock up.
In a statement released today, Jennifer Li, Chief Financial Officer of WeRide said that the initiative to repurchase shares “reflects our confidence” in the company’s business fundamentals and financial strength.
WeRide’s shares have fallen 75% since their mid-February high for the year.
WRD shares are a great investment.
Investors are advised to note that WeRide Inc’s decision in favor of a large-scale buyback program may indicate that its board believes that WRD stock is undervalued. Li, CFO:
The initiative demonstrates WeRide’s commitment to deliver value to its shareholders, and our belief that the stock is a great investment.
She praised the solidity of WRD’s technology and its commercial abilities, which she said would allow it to invest not only in growth but also to return capital to shareholders.
WeRide’s announcement of the buyback comes shortly after WeRide has announced an expansion deal with Uber, which will see its robotaxi service available in 15 additional cities worldwide.
WRD also received another $100,000,000 in investment from the ride-hailing company as part of this agreement. WeRide does not pay dividends at the moment.
Has it become too late to invest into WeRide Inc.?
WeRide Inc. is expanding rapidly, and its robotaxi service operates in over 30 cities throughout 10 countries.
The company announced its stock buyback in light of its financial strength and its confidence in its long-term growth. This commitment signals to deliver value to its shareholders, while keeping its momentum within the autonomous mobility sector.
WRD’s shares are up more than 50 percent in the last few weeks. Wall Street is still as bullish on self-driving stocks.
Barchart data suggests that analysts have currently a “strong buy rating” on the shares of this Guangzhou-based firm. The mean price target is $22, which indicates that this Chinese stock could double in value over the course of the next year.
The post Why WeRide Board see WRD Shares as Undervalued? may be updated as new information is revealed.
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