IMAC Holdings (NASDAQ:IMAC) stock spiked dramatically after their successful pilot program for a new retail concept: The Back Space. The project is located in select Walmart (NYSE:WMT) stores and has the potential for wide-scale expansion. The company believes it will triple its number of stores and be in at least 20 more locations by the end of this year. In addition, IMAC is considering opening more stores over the next three years to expand its business. Chief Operating Officer Dr. Ben Lerner stated:
“We are excited to guide our prospective franchisees with the experience gained during our ten-store pilot program. […] we learned that our price point resonates well with consumers during the pilot, and a potential price increase could yield increased revenue without diminishing the consistent desire for care.”
The company has centers that provide healthcare services, such as chiropractic adjustments, percussion tool therapies, and spinal wellness. Services are offered as walk-in services or as appointments. Appointments are priced at $25 a session. You can also purchase memberships for $65 a month, which is usable at any location.
The announcement comes just one week after IMAC Holdings reported mixed earnings. Revenue increased 12%, from $12.8 million in 2020 to $14.4 million in 2021. However, operating loss jumped to $10.1 million versus a loss of $6.5 million in 2020. Cash balances were at $2.6 million at the end of 2020. But by the end of December 2021, they had grown to $7.1 million.
Is IMAC Stock a Buy?
Investing in IMAC is a risk since the company hasn’t yet demonstrated the ability to generate consistent profits. Investors need evidence that this company has the potential to earn sustainable profits to make it a buy. Regenerative rehabilitation is a rapidly growing industry. With this explosive growth, there is an increasing need for investors to keep an eye on this trend.
The market for regenerative therapy with new technology will grow tremendously over the next decade. From 2020 to 2030, it is projected to rise from $13 billion to $172 billion. This growth is attributable to the rising number of patients with various injuries, the aging population, and the increasing demand for surgical procedures requiring regenerating tissue.
Therefore, the market is there to exploit. However, IMAC is essentially a penny stock. Those who invest in it need to get accustomed to volatility. By any standard, today’s price action is unprecedented. Hence, it is better to sell and take profits rather than buy more in the hopes of another rally.
On the publication date, Faizan Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.