XpresSpa Group Inc (NASDAQ: XSPA) is screaming for the top in the market this morning. However, without any press releases or SEC filings out there, many are wondering why.
The gains seem to be continued excitement about the fact that the company continues to expand its in-airport COVID-19 screening platform. Here’s what’s going on:
Skip to What You Want to Read
- What Is XpresSpa Group?
- Why Airport Screening Is Exciting to Investors
- Risks to Consider Before Buying XSPA Stock
- Final Thoughts
What Is XpresSpa Group?
XpresSpa started as a comfort play, but has quickly become a medical play as a result of the COVID-19 pandemic. The company operates a long line of spa facilities in airports, giving consumers a way to relax as they prepare for their flight.
However, as COVID-19 started to take hold in the United States, these types of businesses were shut down. Instead of tucking its tail between its legs and throwing its hands in the air, XSPA decided that it would grab the bull by the horns and quickly shift its business model.
As a result, the company devised a plan to perform COVID-19 screenings in airports. Not only would these screenings be in high demand, the fact that they would happen in airports meant that the company would play a major role in reducing the spread of the virus.
Why Airport Screening Is Exciting to Investors
At first, everyone said it couldn’t be done. XSPA would never be able to launch COVID-19 screening centers in airports. Airport officials would never have it.
Well, those naysayers were wrong, and in a big way.
In fact, XSPA launched a brand known as XpresCheck. After launching the brand, the company began announcing that it would be launching facilities in airports. In fact, it is now in multiple high-traffic airports across the United States.
That’s overwhelmingly exciting news.
After all, not only were the naysayers wrong, the company is now beginning to screen consumers in the facilities that the naysayers said would never go up, driving revenue in the process.
However, the story gets more exciting.
The fact of the matter is that while there are vaccines, COVID-19 is likely to be around for quite some time. Not to mention, the pain felt across the United States and around the world means that demand for testing will likely ride on highs for some time to come.
So, what we’re talking about here is a company that turned lemons into lemonade and is now ready to drink from the fruits of its labor. We’re talking about a revenue story that’s just starting to generate revenues and the potential for massive revenues as the in-airport testing model continues to spread across the United States.
All in all, we’re talking about a very real opportunity with XSPA.
Risks to Consider Before Buying XSPA Stock
If you’re planning on investing in XpresSpa, or any other stock for that matter, you’re going to have to be willing to accept risk. It’s all part of the investing process. When it comes to XSPA, the most significant risks to consider include:
- Speculation. While XpresSpa has launched several XpresCheck facilities in airports across the United States, the sales results from these facilities are yet to be seen. If demand isn’t quite what investors expect, the stock could see significant declines.
- Profitability. XPSA is not a profitable company. As a result, it is dependent on the funds it has in the bank. Should these funds dry up, a dilutive offering may be ahead, leading to declines.
- Penny Stock. As a penny stock, XSPA is subject to high levels of volatility. This volatility makes buying and selling decisions more difficult and could lead to significant losses over a very short period of time.
The bottom line here is simple. Yes, there are risks to consider when it comes to an investment in XSPA. However, I never count out a company that decides to turn lemons into lemonade and begins to achieve success through that decision.
At the moment, XSPA is on the verge of generating revenues from its in-airport COVID-19 testing facilities and will likely continue to do so. All in all, this is a stock that’s well worth watching.