5 stocks to avoid after announcing disappointing results
The stock market rebounded slightly from its sharp drop last week. The Dow Jones Industrial Average gained 431.17 points to close the latest trading session at 32,654.59, while the S&P 500 and Nasdaq Composite jumped 2% and 2.7%, respectively, to end the session at 4,088.85 and 11,984.52.
Markets have sold off in recent weeks on fears of aggressive interest rate hikes by the Federal Reserve to rein in soaring inflation and a potential economic meltdown. According to FactSet, as of May 6, 2022, 87% of S&P 500 companies had released their first quarter results, including 79% reported EPS above estimates. Although that figure was above the five-year average of 77%, the S&P 500 had a six-week losing streak, the worst since 2011.
Despite positive above-average EPS surprises, some companies reported disappointing results. Recent results from Coinbase Global, Inc. (PIECE OF MONEY), Wayfair Inc. (O), Allbirds, Inc. (BIRD), Beyond Meat, Inc. (BYND), and Paysafe Limited (PSFE) disappointed investors. So we think it’s best to avoid these stocks now.
Coinbase Global, Inc. (PIECE OF MONEY)
COIN, based in San Francisco, is a fintech company that provides end-to-end cost-effective infrastructure and technology. The company offers the crypto-economy’s leading financial account for retailers, a marketplace with a pool of liquidity to transact crypto assets for institutions, and technologies and services that enable ecosystem partners build crypto-based applications and securely accept crypto-asset payments. .
On May 17, 2022, COIN announced that it would be slowing down its hiring due to the market downturn. The company had previously announced plans to triple its size. COIN President and COO Emilie Choi said the company would tone down hiring and instead focus on onboarding employees it has already hired.
COIN’s net revenue for its fiscal first quarter, ended March 31, 2022, decreased 27% year-over-year to $1.16 billion, below the estimate of 1 $50 billion from Wall Street. The company’s net loss was $429.65 million, compared to $771.46 million in net profit the previous year. Additionally, its loss per share was $1.98, compared to at PES from $3.05 a year ago. Its loss per share missed analysts’ estimate of earnings per share by 24 cents.
Analysts expect COIN’s EPS for the quarter ending September 30, 2022 to decline 211.1% year-over-year to $1.80. Its revenue for the quarter ending June 30, 2022 is expected to decline 44.3% year-over-year to $989.10 million. Over the past six months, the stock price has fallen 79.8% to close the last trading session at $70.
COIN’s weak fundamentals are reflected in its POWR Rankings. It has an overall D rating, which equates to a sell in our proprietary rating system. POWR ratings are calculated by considering 118 separate factors, with each factor weighted to an optimal degree.
It has an F rating for growth, stability, and sentiment. It is ranked No. 123 out of 157 stocks in the F-rated Software app industry. Click here to see other COIN ratings for value, momentum and quality.
Click here to view our Software Industry Report for 2022
Wayfair Inc. (O)
To win Boston, Massachusetts, is engaged in e-commerce. The company provides approximately 33 million million products for the home sector under various brands. It offers online selections of furniture, decor, housewares and home improvement products through its sites, including brands Wayfair, Joss & Main, AllModern, Birch Lane and Perigold.
For the fiscal first quarter ended March 31, 2022, W’s total net revenue decreased 13.5% year-over-year to $2.99 billion. The company’s adjusted EBITDA loss was $113 million, compared to adjusted EBITDA of $206 million in the same period last year. Additionally, its net loss was $319 million, compared to $18 million in net profit the previous year. Additionally, its adjusted loss per share was $1.96, compared to adjusted EPS of $1 a year ago, which was above analysts’ estimate of a loss of $1.56.
For the quarter ending September 30, 2022, W’s EPS is expected to decline 1,200% year-over-year to $1.54. Its fiscal 2022 revenue is expected to decline 5% year-over-year to $13.03 billion. Over the past year, the stock price has gained 81.7% to close the last trading session at $55.17.
W’s POWR ratings reflect this weak outlook. It has an overall D rating, which equates to a sell in our proprietary rating system.
It has an F rating for sentiment and a D rating for growth, momentum, stability and quality. Within the Specialized retailers industry, it is ranked No. 41 out of 44 stocks. To see the other note of W for value, Click here.
Click here to view our 2022 Retail Industry Report
Allbirds, Inc. (BIRD)
BIRD manufactures and sells shoes and clothing for men and women. It offers footwear such as running shoes, everyday sneakers, high-top shoes, slip-on shoes, boat shoes, flat shoes, waterproof shoes, and sandals. The New York-based company’s apparel products include activewear, tops, bottoms, dresses, sweaters, underwear and socks.
BIRD’s net loss increased 61.7% year over year to $21.87 million for the first quarter ended March 31, 2022. The company’s adjusted EBITDA loss increased by 77.9% year over year to $12.21 million. Additionally, its loss per share was $0.15, which was higher than analysts’ estimate of a loss of $0.12.
Analysts expect BIRD’s EPS for its 2022 fiscal year to remain negative. Its EPS is expected to decline 15.2% per year over the next five years. Over the past six months, the stock price has fallen 80% to close the last trading session at $4.93.
BIRD’s POWR ratings are consistent with this bleak outlook. It has an overall F rating, which translates to a strong sell in our proprietary rating system.
It has a D rating for Growth, Value, Stability, Sentiment and Quality. It is ranked #67 of 68 stocks in the Fashion & Luxury industry. Click here to see BIRD’s rating for Momentum.
Beyond Meat, Inc. (BYND)
BYND in El Segundo, California, is a food company that offers plant-based meats. The Company’s product offerings include Beyond Burger, Beyond Sausage, Beyond Beef, Beyond Meatballs, Beyond Breakfast Sausage Patties, Beyond Breakfast Sausage Links, Beyond Beef Crumbles and Beyond Italian Sausage Crumbles. It sells plant-based products on all three major platforms of beef, pork and poultry.
For its first fiscal quarter ended April 2, 2022, BYND’s operating loss widened 296.1% year-over-year to $97.62 million. The company’s net loss increased 268.4% year over year to $100.45 million. Additionally, its loss per share widened 267.4% year-over-year to $1.58, better than analysts’ expectations of a $0.98 loss. Additionally, the company’s revenue increased 1.1% year-over-year to $109.46 million, but fell short of the consensus estimate of $111.60 million.
For the quarter ending June 30, 2022, BYND’s EPS is expected to decline 267.7% year-over-year to $1.14. In addition, its EPS for its 2022 and 2023 financial years should remain negative. It has failed to beat street EPS estimates in each of the past four quarters. Over the past nine months, the stock price is down 77% to close the last trading session at $26.96.
BYND’s weak fundamentals are reflected in its POWR ratings. According to our rating system, it has an overall rating of F, which translates to a strong sell.
It has an F rating for Growth, Value, Stability, Sentiment and Quality. Within the Food manufacturers industry, it is ranked last among 87 stocks. To see BYND’s alternate rating for Momentum, Click here.
Paysafe Limited (PSFE)
Based in Hamilton, Bermuda, PSFE is a specialist payment platform. The company aims to enable businesses and consumers to connect and transact through various payment processing capabilities, digital wallet and online payment solutions. Its products include Direct Debt, Digital Wallets, In-App Payments, Online Payments and Publisher Marketplace. It serves the education, field services and financial services sectors.
PSFE’s revenue for its fiscal first quarter, ended March 31, 2022, decreased 2.5% year-over-year to $367.67 million. The company’s net loss rose 1,831.1% year-over-year to $1.17 billion. Additionally, its adjusted EBITDA declined 8.1% year-over-year to $103.96 million.
Analysts expect PSFE’s EPS for its fiscal year 2022 to decline 705.3% year-over-year to $1.21. The company’s revenue for the quarter ending June 30, 2022 is expected to decline 2% year-over-year to $376.52 million. Over the past year, the stock price has fallen 77.5% to close the last trading session at $2.48.
PSFE’s POWR ratings reflect its poor outlook. The stock has an overall D rating, which translates to a sell in our proprietary rating system.
It has a D rating for stability and quality. It is ranked No. 43 out of 48 stocks in the D rating Consumer Financial Services shares. Click here to see PSFE’s additional ratings for Growth, Value, Momentum and Sentiment.
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COIN shares fell $2.80 (-4.00%) in premarket trading on Wednesday. Year-to-date, COIN is down -73.37%, compared to a -14.84% rise in the benchmark S&P 500 over the same period.
Ever since he was in elementary school, Dipanjan had been interested in the stock market. This enabled him to obtain a master’s degree in finance and accounting. Currently, as an investment analyst and financial journalist, Dipanjan is particularly interested in reading and analyzing emerging trends in financial markets. After…