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:
On September 15, Stifel analyst Michael Hoffman initiated coverage of PureCycle Technologies with a Buy rating and $15 price target. The global demand for polypropylene is 178 billon pounds with an expected five-year 3.8% CAGR, the analyst tells investors. Hoffman is positive on PureCycle as an "attractive" sustainability investment that offers a first mover advantage while also supporting global consumer packaging companies' efforts to meet expanding polypropylene recycled plastic content commitments.
Earlier this week, Marqeta announced that its board of directors has unanimously authorized a share repurchase program of up to $100M million of Marqeta's Class A common stock. "The share repurchase program demonstrates the confidence Board and management team have in the strength of our business and future growth prospects. We see a specific moment-in-time opportunity for us to execute a share buy-back program as we do not believe our current valuation reflects our performance or our long-term market opportunity. Our strong balance sheet with $1.7 billion in liquidity enables us to execute this program while continuing to invest in both organic and inorganic opportunities to grow the business," said Jason Gardner, Founder and CEO of Marqeta.
Baird analyst Ben Kallo lowered the firm's price target on Li-Cycle to $8 from $11 and keeps a Neutral rating on the shares after the company reported negative revenue as a result of fair market value changes in contracts. He said management expressed optimism surrounding future financing options, including the potential for government grants and benefits from the Inflation Reduction Act, but he remains on the sidelines while looking for more information surrounding the competitive environment, ramp and success of the hub, and stability of contracts.
In addition, on September 14 Li-Cycle filed to sell 96.58M shares of common stock for holders.
Guggenheim analyst Curry Baker raised the firm's price target on DraftKings to $34 from $31 and keeps a Buy rating on the shares after updating the firm's model to reflect favorable week one outcomes in the NFL, strong download and relatively better DAU performance based on third-party app data, the company's ongoing focus on cost controls and a more rational promotional environment.
Earlier this week, DraftKings (DKNG) announced that Amazon (AMZN) has selected DraftKings as a sponsor for Thursday Night Football on Prime Video. "The multi-year collaboration between DraftKings and Amazon will deliver fans engaging pregame content and unique betting offers every Thursday throughout the NFL season, beginning September 15," the company stated. As part of the multi-year agreement, TNF will contain DraftKings integrations in the live pregame, including odds and additional sports betting insights. DraftKings and Amazon will also collaborate on TNF-themed offerings, including same-game parlays, which will be available on the DraftKings Sportsbook app.
Cowen analyst J. Derrick Wood lowered the firm's price target on Braze to $50 from $54 and keeps an Outperform rating after stating that they reported a mixed Q2, with revenue growth above consensus but billings growth below the Street due to customers requesting invoice flexibility. He believes the company is facing some macro headwinds, resulting in longer sales cycles and ramp-to-productivity.
Meanwhile, Canaccord analyst David Hynes said Braze delivered healthy growth again and while management was upbeat with respect to market leadership and longer-term trends, like others selling large deals, macro headwinds are impacting deal cycles, particularly with new business and to a lesser extent expansion activity. He said shares could be brittle in the near-term, particularly if another round of risk-off more significantly impacts high valuation, high loss stories, he continues to think the opportunity here is too compelling not to own at least a starter position in Braze. Hynes maintains his Buy rating and $47 price target on Braze shares.
On September 12, Braze reports Q2 results and raised its FY23 EPS view to (79c)-(77c) from (82c)-(78c) while increasing its FY23 revenue view to $347M-$350M from $345M-$349M. "We delivered a strong quarter of 55% revenue growth while continuing to provide best-in-class omni-channel customer engagement for our customers. We continue to execute on our long-term strategy, introducing new, enhanced and differentiated products, and expanding our engineering and go-to-market presence. Despite macroeconomic headwinds and the challenges they present, we remain confident in the durability of our business and the overall promise of our customer engagement platform and a massive addressable market," said Bill Magnuson, cofounder and CEO of Braze.
GameStop
-0.34 (-1.19%)
Joby Aviation
-0.215 (-3.74%)
Braze
-0.11 (-0.31%)
Li-Cycle
-0.17 (-2.71%)
PureCycle Technologies
+0.295 (+2.98%)
Marqeta
-0.42 (-5.36%)
Cano Health
-0.4 (-5.69%)
Confluent
-1.655 (-6.24%)
Asana
-1.335 (-5.22%)
DraftKings
-0.68 (-3.54%)
NexGen Energy
-0.145 (-3.40%)
Royal Caribbean
-0.525 (-1.03%)
Carnival
-0.18 (-1.65%)
ChargePoint
-1.17 (-6.08%)
Celldex
-1.56 (-5.15%)
GDS Holdings
-1.43 (-6.22%)
Sigma Lithium
-0.71 (-2.61%)
New York Mortgage
+0.01 (+0.36%)