Each week, The Fly will announce the newest downgrades to Strong Sell in StockNews.com's POWR Ratings algorithmic model.
This Fly exclusive recap identifies stocks with over a $1B market capitalization that have been downgraded this week to the Strong Sell, or "F," rating in the service's proprietary model that analyzes 118 different factors, each of which contribute a little to the stock's predicted likelihood of underperformance. A bell curve distribution of StockNews.com's ratings shows that only the top 5% of the over 5,000 stocks rated by the system are assigned a "Strong Buy," or "A," rating while the bottom 5% are assigned a Strong Sell. The F-rated stocks would have tumbled an average of 18.98% a year since 1999, according to StockNews.com.
This week's downgrades to Strong Sell as determined by the POWR Ratings algorithm:
Learn more about the POWR Ratings
The Fly's recent reporting on these stocks includes:
Snap reported Q1 results on April 21, after which Barclays analyst Ross Sandler lowered the firm's price target to $42 from $77 and kept an Overweight rating in a post-earning research note titled "Could Have Been A Lot Worse." Sandler said Snap reported revenue broadly in line with consensus, EBITDA $40M above, and guided more or less in line with expectations. There doesn't seem to be any further deterioration from the Ukraine war, but the company is leaving room in the guidance should it materialize, Sandler added.
Meanwhile, Morgan Stanley analyst Brian Nowak lowered the firm's price target on Snap to $55 from $59 and kept an Overweight rating following the company's Q1 report and Q2 revenue guidance that he says was about 5% lower than expected. Though Snap's execution on ads and engagement remains strong, its cautious macro guidance sets the table for growing uncertainty about the state of the ad markets, Nowak said. However, he adds that based on last night's call, he now believes he previously overstated Snap's risk to IP signal loss and he now sees fingerprinting as a smaller risk than he previously thought.
On April 28, Snap hosted its 2022 Partner Summit, after which Evercore ISI analyst Mark Mahaney said he continues to be impressed by Snap's product innovation. He came away from the event with "even greater appreciation" for its leading position in AR technology as well as the potential "commercial unlock," particularly in Social Commerce. Snap disclosed 600M MAUs, or monthly active users, up 100M or about 20% from last year's Summit and "solidly ahead" of Pinterest (PINS) and Twitter (TWTR), noted Mahaney, who has an Outperform rating and $47 price target on Snap shares.
On April 25, Stephens analyst Mason Carrico initiated coverage of Natera with an Overweight rating and $54 price target. He views Natera as a leader in cell-free DNA, or cfDNA, testing and forecasts the Women's Health business growing by greater than 20% over the next two-plus years as NIPT adoption expands in the average-risk pregnancy market, Carrico tells investors. Though he sees Natera as unlikely to displace the market leader in transplant, he views its Prospera as a competitive transplant offering that will capture a portion of the unpenetrated transplant monitoring market, the analyst added. He is taking "a longer-term view" and believes positive coverage decisions and ramping Signatera revenue will lead to multiple expansion for Natera, Carrico added.
On April 26, Natera announced the RenaCARE, or Renasight Clinical Application, Review and Evaluation, study - a real world, prospective, multi-center clinical study to assess the clinical utility of the Renasight genetic testing panel. The study has already enrolled 1,600 patients across 25 sites, representing leading academic and private nephrology clinics in the U.S., and will enroll up to 2,000 patients. It is expected to complete enrollment in the second quarter of 2022 with a publication expected to be submitted in late 2022, the company said.
On April 28, Lithium Americas announced that it has entered into an agreement to acquire shares of Green Technology Metal - a North American focused lithium exploration and development company with hard rock spodumene assets in north-west Ontario, Canada - in a share placement for total consideration of $10M. The company's investment in GT1 is part of a share placement of approximately $40M. Upon closing of the share placement, Lithium Americas expects to own approximately 5% of GT1.
On April 28, JPMorgan analyst Bill Peterson initiated coverage of Archer Aviation with an Overweight rating and $7 price target. Archer is an emerging transportation company developing an electric propulsion vertical takeoff and landing aircraft intended for direct sales to commercial customers as well as part of a network Archer and its partners operate, Peterson noted. The analyst believes the company is taking a "pragmatic approach" to aircraft design and commercialization. With a stronger balance sheet than those of most peers, Archer is well positioned to execute on its strategy and is undervalued relative to peers, contends Peterson.
On April 28, Loop Capital analyst Mark Schappel lowered the firm's price target on E2open to $12 from $16 to reflect the pullback in the broader software sector and the supply chain space, but keeps a Buy rating on the shares following the release of quarterly report the day prior. The company's Q4 results were "positive," with 10% organic subscription revenue growth and estimated 11.4% growth this year, the analyst said. Schappel added that he is positive on E2open's large total addressable market that's in the midst of a multi-year replacement cycle as well as its differentiated collaborative cloud-based supply chain product.
Snap
+0.54 (+1.87%)
Natera
-0.11 (-0.30%)
Lithium Americas
-0.2 (-0.77%)
Archer Aviation
+0.075 (+1.62%)
AST SpaceMobile
-0.275 (-3.49%)
E2open
-0.01 (-0.13%)
NeoGenomics
-0.005 (-0.05%)
SES AI
+0.065 (+1.00%)