OLLI Stock Forecast & Price Target

Ollie's Bargain Outlet Holdings Inc. has demonstrated strong profitability, as evidenced by an increase in operating cash flow and operating margins by 100 and 80 basis points, respectively. The company has accelerated its annual recurring revenue growth alongside a robust 25% revenue growth, highlighting its resilience in a competitive retail environment. Furthermore, the company maintains a strong financial position, which is expected to support its growth strategy and expand its market presence across the Eastern United States.

The negative outlook on Ollie's Bargain Outlet's stock is primarily influenced by a projected decline in FY'25 EBITDA by 9% to $496 million following disappointing third-quarter results and weak fourth-quarter guidance. Additionally, forecasts indicate a further 20% drop in FY'26 EBITDA as the company faces ongoing challenges, including decreases in commodity index assets under management and a lack of e-commerce presence, which could exacerbate supply chain disruptions and increase costs. Furthermore, the anticipated adverse impact on performance metrics, along with deteriorating market conditions, signals potential long-term challenges for the company.