XpresSpa (XSPA) Stock: What’s Next Following The JFK Contract

XpresSpa Group Inc (NASDAQ: XSPA) has been a hot topic of discussion over the past couple of months. As COVID-19 continued to spread around the world, and economies were locked down, the company made a big move.

It announced that it would be temporarily convert its airport spa real estate into testing centers. Recently, we received word from the company surrounding an agreement with JFK airport that would lead to the launch of a pilot testing location in one of the busiest airports in the nation.

However, this is just the tip of the iceberg, there’s a lot to look forward to in my opinion. Here’s how I see it.

Stop wasting your time! Start finding winning trades in minutes with Trade Ideas!

Addressing An Angry XSPA Bear

Before I get too deep into this article, I want to address a reader that I know is going to send me an email as soon as I click publish. The reader sends me warnings every time I publish an article, stating that he is going to report me to the SEC and that XpresSpa will never convert its real estate into testing facilities. So, before we get into what’s next, I want to address this reader and others with this opinion that have not emailed me:

First and foremost, I am happy to speak with the SEC as I am doing nothing wrong. I am a reporter, not a financial advisor and nothing on my website should be considered a recommendation to buy a stock. Your financial advisor should make those recommendations since he, or she, knows your specific goals and unique situation. If you read the disclaimer at the bottom of this and every page of my website, you’ll see that.

With that out of the way, I also disagree with this reader in the idea that XSPA will “NEVER” be able to convert its spa facilities into testing sites. In the last message, he pointed that the pilot location in the JFK airport is a standalone location, not a remodel. Which is correct.

However, when pilot launches work well, we tend to see a general acceptance of the product, service, or idea, leading to its spread. So, to say that the company will never be able to convert its spa facilities into testing locations, well, that’s just a bit over pessimistic my friend.

What’s Next For XSPA Stock

With that out of the way, in my opinion, XpresSpa is a stock that’s hard to ignore based on its work to temporarily remodel and refocus, becoming a COVID-19 testing company. Here’s why:

First and foremost, while COVID-19 is still far from behind us, consumers are getting sick of staying home. The economic shutdown can’t last forever. People need to work, people need to communicate, people need to get out of their homes.

Considering this, key tourist destinations are starting to reopen. In fact, as I write this, I’m watching ABC News Live, who just reported that Disney theme parks, casinos, hotels, and other hot tourist destinations are beginning to open.

So, what does this have to do with XSPA stock? EVERYTHING!

As these hot tourist destinations open, we’re going to naturally see more traveling. That family in New York will travel to Florida to visit Disney World. That newly wed couple in Florida is going to travel to vegas for their honeymoon. Travel is a natural implication of the opening of tourist destinations. Unfortunately, it also poses a very real danger as COVID-19 continues to infect thousands of new patients each day.

So, how do we reopen and stay safe. Well, that’s still up for debate, but what we do know is that testing is a great first step. That’s where XSPA comes in.

Having testing locations in airports is a very compelling idea. What if that family in New York could be tested and cleared before traveling to Florida, or that couple in Florida could get tested in cleared before traveling to Vegas? Of course, ensuring that consumers are clear before traveling on an airplane could greatly help in the fight to reduce the spread of the novel coronavirus.

So, what’s next?

First and foremost, testing demand is likely to rise as the United States begins to reopen. Since we can’t meet testing demand as it stands now, that’s a good sign for XpresSpa. In fact, even regulatory agencies may get involved in the push to make the company’s plan come to fruition due to a national public health need.

I expect that the pilot test will go well. Geared toward airport workers and others associated with JFK, if all goes well, we will likely see a more mass rollout, at least in this single airport, making these tests available to travelers. In my view, XSPA has a very strong chance of success here, which could lead to a domino effect.

With JFK being one of the largest airports in the world and the largest airport in New York, if all goes well there, it will serve as a compelling case study for what other airports should be doing. Considering that XSPA is the pioneer in this idea, it will likely be involved in the spread of airport COVID-19 testing across the United States.

As such, the company will be able to get through one of the hardest times in history for the spa industry, and could see revenue increase as demand for COVID-19 testing continues to grow.

My final prediction… The bears will lose their shorts and I will continue to get emails warning against what I continue to believe a great idea!

Before I close, I want to make one more thing clear. While consistent messages from a single bearish investor prompted me to write this article, I have received several emails from XSPA bulls, thanking me for covering the story and sharing my opinions with regard to the potential of the company’s temporary transition. To all of those readers, thank you for your support! I look forward to hearing from you again some time.

Stop wasting your time! Start finding winning trades in minutes with Trade Ideas!

Don’t Miss The Next Big Story

Join our free mailing list below to receive real-time news alerts!