The Federal Reserve is committed to hiking rates until inflation falls to its target level of 2%. The Fed's aggressive monetary policy tightening has raised the odds of a recession.
According to the Measure of CEO Confidence survey, 98% of CEOs are preparing for a U.S. recession in the next 12 to 18 months. Citadel CEO Ken Griffin said, "Everybody likes to forecast recessions, and there will be one. It's just a question of when and, frankly, how hard."
Amid such uncertain circumstances, market volatility is rife, as is evident from the CBOE Volatility Index's 85.7% year-to-date gains. Moreover, according to JPMorgan Chase CEO Jamie Dimon, the S&P 500 could fall significantly from its current level.
Given the backdrop, it could be wise to avoid fundamentally weak stocks Roblox Corporation (RBLX), Palantir Technologies Inc. (PLTR), Snap Inc. (SNAP), Blink Charging Co. (BLNK), and Astra Space Operations, Inc. (ASTR).
Roblox Corporation (RBLX)
RBLX develops and operates an online entertainment platform. The company offers Roblox Studio, Roblox Client, Roblox Education, and Roblox Cloud. It serves customers in the United States, the United Kingdom, Canada, Europe, China, the Asia-Pacific, and internationally.
RBLX's loss from operations came in at $170.27 million, up 19.1% year-over-year. Also, its net loss came in at $176.44 million, up 25.9% year-over-year. Moreover, its loss per share came in at $0.30, up 20% year-over-year.
Analysts expect RBLX's EPS to decrease 18.6% year-over-year to negative $1.15 in 2022. It missed EPS estimates in three of four trailing quarters. Over the past year, the stock has lost 52.2% to close the last trading session at $35.56.
RBLX's POWR Ratings reflect its poor prospects. It has an overall F rating, equating to a Strong Sell in our POWR Ratings system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
RBLX has an F grade for Stability and Sentiment and a D for Growth, Value, and Momentum. It is ranked last among 22 stocks in the Entertainment - Toys & Video Games industry. Click here to access the additional POWR Ratings for RBLX (Quality).
Palantir Technologies Inc. (PLTR)
PLTR builds and deploys software platforms for the intelligence community in the United States to assist in counterterrorism investigations and operations. The company operates in two segments: Commercial; and Government.
On September 19, 2022, Robbins Geller Rudman & Dowd LLP announced their class action lawsuit against PLTR, which alleges the company's top executives to be involved with violations of the Securities Exchange Act of 1934.
PLTR's net loss came in at $179.33 million, up 29.4% year-over-year. Moreover, its loss per share came in at $0.09, up 28.6% year-over-year. Also, its current liabilities came in at $665.74 million for the period ended June 30, 2022, compared to $660.10 million for the period ended December 31, 2021.
Street expects PLTR's EPS to decrease 61.5% year-over-year to $0.05 in 2022. It missed EPS estimates in three of four trailing quarters. Over the past year, the stock has lost 69.1% to close the last trading session at $7.53.
PLTR has an overall rating of D, equating to Sell in our POWR Ratings system. It has a D grade for Value, Stability, and Sentiment. It is ranked #21 out of 27 stocks in the D-rated Software - SAAS industry.
Click here to access the additional POWR Ratings for MPC (Value, Momentum, and Quality).
Snap Inc. (SNAP)
SNAP operates as a camera company in North America, Europe, and internationally. The company offers Snapchat, a camera application with various functionalities, such as Camera, Communication, Snap Map, Stories, and Spotlight.
SNAP's operating loss came in at $400.94 million, up 108.3% year-over-year. Also, its net loss came in at $422.07 million, up 178.3% year-over-year. Its loss per share came in at $0.26, up 160% year-over-year.
SNAP's EPS is estimated to decrease 84% year-over-year to $0.08 in 2022. Over the past year, the stock has lost 87% to close the last trading session at $9.99.
SNAP's POWR Ratings are consistent with this bleak outlook. The stock’s overall F rating equates to a Strong Sell in our rating system. Also, the stock has an F grade for Stability and a D for Growth, Momentum, Sentiment, and Quality. It is ranked #57 out of 63 stocks in the F-rated Internet industry.
Click here to access the additional POWR Ratings for SNAP (Value).
Blink Charging Co. (BLNK)
BLNK and its subsidiaries own, operate, and provide electric vehicle (EV) charging equipment and networked EV charging services in the United States and internationally. The company offers residential and commercial EV charging equipment enabling EV drivers to recharge at various locations.
On October 11, 2022, BLNK announced the launch of its entirely rebuilt Blink Network and its new Blink Charging Mobile App, also completely redesigned. However, increasing competition in this space could be challenging.
BLNK's loss from operations came in at $21.96 million, up 77.9% year-over-year. Also, its net loss came in at $22.62 million, up 68.1% year-over-year. In addition, its loss per share came in at $0.52, up 62.5% year-over-year.
BLNK's EPS is estimated to decrease 46.2% year-over-year to negative $1.93 in 2022. It has missed EPS estimates in three of four trailing quarters. Over the past year, the stock has lost 50% to close the last trading session at $14.36.
BLNK's overall F rating equates to a Strong Sell in our POWR Ratings system. It has an F grade for Value, Stability, and Quality and a D for Growth and Sentiment. It is ranked #87 out of 90 stocks in the Industrial - Equipment industry.
We've also rated BLNK for Momentum. Get all BLNK ratings here.
Astra Space Operations, Inc. (ASTR)
ASTR designs, tests, manufactures, launches, and operates space products and services. It also designs, tests, manufactures, and operates propulsion modules to enable satellites to orbit in space.
On October 7, 2022, ASTR received a delisting warning from the Nasdaq after its stock spent 30 consecutive days below $1 per share, violating the exchange's basic requirements. The stock continues to trade below $1.
ASTR's operating loss came in at $82.61 million, up 176.3% year-over-year. Also, its net loss came in at $82.30 million, up 163% year-over-year. In addition, its current liabilities came in at $61.27 million for the period ended June 30, 2022, compared to $40.73 million for the period ended December 31, 2021.
Analysts expect ASTR's EPS to decrease 29.3% per annum for the next five years. Over the past year, the stock has lost 94.1% to close the last trading session at $0.53.
ASTR’s POWR Ratings reflect its poor prospects. The stock has an overall F grade, equating to a Strong Sell in our proprietary rating system. Also, it has an F grade for Stability and a D for Growth, Sentiment, and Quality. It is ranked #30 out of 31 stocks in the D-rated Airlines industry.
Click here to access the ASTR ratings for Value and Momentum.
RBLX shares rose $0.19 (+0.45%) in after-hours trading Monday. Year-to-date, RBLX has declined -58.70%, versus a -21.87% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.
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