Olo Inc. (NYSE: OLO) turned heads early Thursday with a striking premarket performance. After a sluggish regular trading session on Wednesday, where the stock slipped 1.2%, Olo’s shares soared by 24% before the market opened, jumping from $4.78 to $5.72. This significant surge underscores a strong investor reaction to the company’s latest financial results.
Positive Olo Earnings Report Drives Surge
The dramatic premarket increase follows Olo’s Q2 earnings report, which hit all the right notes. The company reported earnings of $0.05 per share, right on target with analysts’ expectations. This was an improvement from last year’s $0.04 per share and consistent with the company’s forecast from the previous quarter.
Revenue for the quarter reached $70.5 million, surpassing the Zacks Consensus Estimate by nearly 4%, and marking a solid increase from $55.25 million a year ago. Despite these strong results, the business has struggled to exceed consensus EPS estimates in recent quarters.
Legal Settlement Adds Context
The positive financial news comes amidst a backdrop of recent legal developments. Earlier this year, Olo agreed to settle a $9 million lawsuit with shareholders over allegations that the company misrepresented its relationship with Subway.
The lawsuit, which began last August, claimed the company had downplayed the risk of Subway ending its partnership, which significantly impacted the company’s stock value. While it has maintained its stance of no wrongdoing, the settlement aims to close this chapter and shift focus back to business growth.
Conclusion
The stock’s premarket jump reflects renewed confidence among investors, but future performance will hinge on how the company addresses ongoing concerns and capitalizes on its recent earnings success. With the legal settlement behind them and a solid earnings report in hand, the company is positioned to potentially regain its footing and drive forward in a competitive market.
