WeRide Inc (NASDAQ: WRD) is seeing massive interest from global investors today after announcing what can only be described as a sizable share repurchase programme given its overall scale.
In its press release this morning, the robotaxi specialist confirmed that its board has authorised buybacks worth up to $100 million for the next 12 months.
WRD shares rallied nearly 30% in response to the buyback announcement on Wednesday.
Why is WeRide’s stock buyback announcement significant?
WeRide’s stock repurchase programme is a meaningful development for its investors as buybacks will reduce the total number of WRD shares outstanding.
This would see the autonomous driving technology firm’s earnings being distributed among fewer shares moving forward, leading to a higher EPS that often contributes to driving the stock price up.
Additionally, the share repurchase initiative “reflects our confidence in our business fundamentals, financial health and long-term outlook,” said Jennifer Li, the Chief Financial Officer at WeRide, in a press release today.
Despite a sharp rally on Wednesday, WeRide shares are still down some 75% versus their year-to-date high in mid-February.
WRD shares present a compelling investment opportunity
Investors should note that WeRide Inc deciding in favour of a sizable buyback programme may signal its board’s belief that WRD shares are undervalued at current levels. According to CFO Li:
“The initiative underscores our commitment to delivering value to shareholders and demonstrates our conviction that WeRide’s stock represents a compelling investment opportunity.”
She touted the firm’s solid technology and robust commercial capabilities that position WRD to not only invest in its growth but also return capital to its shareholders.
The buyback announcement arrives shortly after WeRide announced an expanded deal with Uber that will bring its commercial robotaxi services to another 15 cities globally.
As part of that agreement, the ride-hailing giant also committed another $100 million in equity investment to WRD. Note that WeRide stock does not currently pay a dividend, though.
Is it already too late to invest in China-based WeRide Inc?
WeRide Inc. has been expanding aggressively, with its robotaxi services operating in more than 30 cities across 10 countries already.
Given its strong financial health and confidence in long-term growth, the company’s stock buyback announcement signals a commitment to delivering value to shareholders while maintaining its momentum in the autonomous mobility space.
Investors should note that WRD shares have soared more than 50% in recent weeks. Still, Wall Street remains bullish as ever on the self-driving stock.
Data from Barchart suggests analysts currently have a consensus “strong buy” rating on shares of the Guangzhou headquartered firm. More importantly, the mean target of $22 indicates potential in this Chinese autonomous driving stock to roughly double from here over the next 12 months.
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