Build-A-Bear Workshop heads even lower

Today Build-A-Bear Workshop, Inc (NYSE:BBW) is down 9% and shares are getting closer to a new low, hanging out around $9 a share. Bad news has driven this stock down 68% over the last year and if you're hoping to catch a rebound, better think again.

This stock has 'Fad' written all over it an Wall Street isn't going to let that go anytime soon. 

On May 8th BBW said it expects to open 20 stores in the U.S. in 2008, with 5 new stories opening in Ireland, France and the U.K. In 2007, the company opened 35 new stores in the U.S., and 11 new stores in Ireland, France and the U.K. The company said it was slowing store growth because of 'near-term challenges in the retail environment.'

The 52-week run on BBW is a perfect example of how not to impress Wall Street.  As of last month 19.9% of the float on Build-A-Bear was short, and the Masters expect that number to increase. 

Today another downgrade came in from Credit Suisse and its pushing down shares again.  Last month BBW reported Q1 profit fell 21 percent to $6.4 million, or 32 cents per share. The results include a charge of a penny per share associated with reviewing strategic alternatives. Analysts polled by Thomson Financial expected a profit of 27 cents per share.

Revenue rose 6 percent to $123.8 million from $116.8 million. Analysts expected revenue of $121 million.

Stifel Nicolaus & Co. analyst David Schick wrote in a client note that results were helped by expense control in a difficult retail environment.

"A slower growing, Internet-focused Build-a-Bear could get meaningful multiple expansion over time; however, there is not enough evidence of this emerging in the near term," he wrote. He kept his "Buy" rating and $17 price target on the stock.

But believe us Masters, the stock is at $9 because that's where it should trade and the powers that be aren't going to let this stock rebound unless something big happens.

BBW shares are headed toward a new 52-week low and when that occurs, wait just a tad longer.  If they have anything good on the horizon, you can think about making a position but until that time, don't touch it.

Disclaimer: No positions in BBW.