Jamba Juice (NASDAQ:JMBA) shares set a new three year high on Wednesday (5/22/13) as shares closed above the $3.00 mark. Recently, Jamba Juice shareholders have seen the stock price steadily rise. In fact, in just the past six months shares have risen over 33% from $1.99. Jamba, Inc., through its subsidiary, Jamba Juice Company, owns, operates, and franchises Jamba Juice stores. Its restaurants offer whole fruit smoothies, squeezed juices, hot oatmeal, breakfast wraps, bistro sandwiches and mini-wraps, California Flatbreads, frozen yogurt, and various baked goods and snacks.
Since the beginning of 2012, shares of Jamba Juice have more than doubled. Despite this ginormous increase, some analysts are expecting even further growth. On April 30th, the company reported first quarter 2013 earnings which included a quarterly comparable store sales increase of 3.6% for company-owned stores. The increase was driven by higher check totals and increased store traffic. Year-over-year, revenues increased by over $2 million dollars and losses have improved. The same store sales increase, revenue increase, and reduced loss are all strong signs for potential investors going forward. Analyst Kurt Frederick whom has an "outperform" rating on Jamba, sees a huge upside and plenty of room for growth in the company. Kurt Frederick predicts that, "earnings per share will grow steadily in the next few years, reaching 30 cents by 2016."
On Wednesday, May 22, 2013, Jamba announced a deal with point-of-sale giant National Cash Register (NYSE:NCR) who collaborated with PayPal to offer Jamba Juice guests an intriguing service. The new app allows for customers to order and make payment via PayPal with their smartphones. The interesting concept which allows for customers to place their order on a mobile phone and skip the line is showing early signs of positive feedback. It makes ordering easier and is expected to improve speed of service as well as offer a unique experience to Jamba Juice customers.
There have been many new product launches and offerings that are geared directly at Jamba Juice's core focus of promoting a healthy living style. Among the new launches was "Berry Me" - a focus on smoothies with fresh picked strawberries. This summer customers will be able to get their Jamba strawberry-packed smoothie made with whole fruit in the following flavors: Strawberries Wild®, Strawberry Surf Rider™ and Jamba Kids™ Strawberries Gone Bananas™." Additionally, Jamba offers healthier alternatives to competitor's kid's meals. The kid's meals include a choice of three smoothies and the choice of either a pizza swirl or a cheesy stuffed pretzel. Both the pizza swirl and pretzel offer 13 grams of protein and contain only 300 calories. Jamba offers its guests a boost to their smoothies with "Boost Me" protein boosts. As if that wasn't enough, Jamba's selection of juices is plentiful and each juice is fresh squeezed and loaded with nutrients and vitamins. Jamba's "on-the-go" selection is easily more nutritious than McDonalds's (NYSE:MCD), Wendy's (NYSE:WEN), or YUM Brands (NYSE:YUM) offerings on their "everyday value menus".
With Jamba's main focus and target involving an active and healthy lifestyle, it would only make sense that tennis great: Venus Williams, partnered with Jamba Juice. After Venus Williams` first store opening in Maryland she commented, "My partnership with Jamba Juice is an extension of that commitment in the fight against obesity and to promote a healthy active lifestyle." She added, "My goal is to help inspire our nation's youth to become more active and to make better dietary choices. As a recognized healthy, active lifestyle brand that offers simple menu solutions for eating right while engaging in healthy activities, Jamba Juice is a perfect fit to help me in that endeavor". Not only is Venus Williams goal to help deliver a strong message about the importance of eating healthier and being more active, but the tennis superstar has also begun franchising locations herself. In fact, she plans to open five more stores in the D.C. area over the next five years.
Jamba Juice has a solid platform and is poised for future growth. As of January 21st, 2013 Jamba Juice had 809 Jamba Juice stores consisting of 301 company-owned and operated stores and 473 franchise-operated stores in the United States, and 35 international franchise-operated stores. Additionally, the company also licenses its Jamba brand name to sell consumer packaged goods through retail channels, such as grocery, mass, club, and convenience stores, as well as online.
The balance sheet at Jamba Juice is underrated and investors should be paying close attention. In 2012, Jamba generated revenues of 230 million. Jamba currently carries no debt and has over 20 million in on hand cash. Additionally, on May 31st 2013, Jamba Juice will be implementing a one-for-five stock reverse stock split- making current owners have less shares but at higher prices. Let's say shares are trading at $3 on May 31st, and an investor owns 100 shares. After the reverse stock split, the same investor would own 20 shares at $15 per share. The one-for-five reverse stock split will be key in attracting more investors because some institutions are restricted to buying stocks under certain price levels.
Undoubtedly, Jamba Juice still carries plenty of risk. In fact, Jamba Juice lost money last year. Additionally, there is always the possibility that competitors like McDonald's, Wendy's, or YUM target the smoothie industry and take away sales, revenues, and guests from Jamba. These fast-food mega-companies have the cash to make serious marketing campaigns and serious expenditures that Jamba Juice simply cannot compete with. Starbucks (NASDAQ:SBUX) has also been a worry for Jamba, as they may look to take a deeper dive into the smoothie industry with the $1.7 Billion of cash they are currently sitting on.
While potential investors have much to be cautious and weary about, there is also a lot to be excited about. If Jamba Juice can continue to carve its own niche while withholding the pressure and competition from its peers- Jamba Juice offers some real potential for future growth.
Disclosure: I am long JMBA. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.