News

Ranpak Holdings (NYSE: PACK), a small company that provides packaging systems and materials to e-commerce companies and more, is often overlooked. But investors were certainly looking its way today. As of 2:20 p.m. ET, Ranpak stock was up a whopping 51% following the release of its financial results.

An exciting day for Ranpak shareholders

Ranpak released financial results for the fourth quarter of 2023 yesterday afternoon. Q4 net revenue was up 14% year over year and up more than Wall Street expected. The company leases its packaging machines, and machine placements were up 1.5%. And higher volume led to higher revenue for its consumable-packaging materials.

Profits also improved for Ranpak. The company had Q4 adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of over $24 million, which was its best quarter in 2023. Moreover, its full-year net loss shrank to $27.1 million compared to a net loss of $41.4 million in 2022.

The financial results were enough to motivate a couple of analysts to rethink their assumptions about Ranpak. Both Ghansham Panjabi of Baird and Greg Palm of Craig-Hallum raised their price targets for Ranpak stock today in light of Q4 results, according to The Fly.

Expect more growth in 2024 for Ranpak

For 2024, Ranpak's management expects to grow net revenues by 6% to 12%, which would result in $370 million to $390 million on the top line. And for adjusted EBITDA, management expects to grow by 5% to 16%, which would result in adjusted EBITDA of $80 million to $89 million.

That's a broad range of outcomes for Ranpak in 2024, and it reflects uncertainty on management's part, which is something for investors to be mindful of. Moreover, while Q4 results were respectable, I'm a little surprised to see the stock up as much as it is.

For Ranpak, this could be a case of a small stock popping more than usual because volume is typically low -- a sudden spike in interest can trigger big moves. Therefore, I wouldn't be surprised if shares pulled back in coming days and weeks. But for patient, long-term investors, Rankpak stock could still find upside if it can keep building on its successes in 2023.

Should you invest $1,000 in Ranpak right now?

Before you buy stock in Ranpak, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Ranpak wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.

*Stock Advisor returns as of March 11, 2024

Jon Quast has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.