The hotter-than-expected August inflation report caused a massive market sell-off last week as investors became concerned over the potential for an aggressive Fed stance. The major benchmark indexes witnessed their worst week since June, with the S&P 500 and Nasdaq Composite losing 4.8% and 5.5%, respectively.
Kathy Bostjancic, the chief U.S. economist at Oxford Economics, believes that the economy is poised to enter a mild recession in the first half of next year. Moreover, shipments company FedEx’s withdrawal of its full-year guidance on concerns over soft global shipment volumes makes investors concerned about a global recession.
Since the possibility of at least a 75-basis-point rate hike this week will keep the market under pressure, speculative stocks Lucid Group, Inc. (LCID), SoFi Technologies, Inc. (SOFI), Bed Bath & Beyond Inc. (BBBY) are best avoided now, given their weak fundamentals.
Lucid Group, Inc. (LCID)
LCID, a technology, and automotive company, designs, engineers, and builds electric vehicles, EV powertrains, and battery systems.
LCID’s loss from operations increased 124.6% year-over-year to $559.20 million for the second quarter ended June 30, 2022. Its total costs and expenses increased 163.6% year-over-year to $656.54 million. In the same period, the company’s net loss and net loss per share came in at $220.43 million and $0.33, respectively.
Analysts expect LCID’s loss per share to increase 22.1% year-over-year to $0.32 for the quarter ended September 30, 2022. Also, its EPS is expected to be negative $0.85 in the ongoing fiscal year.
The stock has declined 57.5% year-to-date to close the last trading session at $16.18.
LCID’s weak fundamentals are reflected in its POWR Ratings. It has an overall F rating, equating to a Strong Sell in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
It also has an F grade for Value, Stability, and Quality. The stock is ranked #54 out of the 65 stocks in the D-rated Auto & Vehicle Manufacturers industry.
Click here to see additional ratings of LCID for Growth, Momentum, and Sentiment.
SoFi Technologies, Inc. (SOFI)
SOFI is a digital financial services company that operates through three segments- Lending; Financial Services; and Technology Platforms.
SOFI’s net loss for the fiscal second quarter ended June 30, 2022, came in at $95.84 million, declining 42% from the year-ago period, while its loss per share decreased 75% year-over-year to $0.12. Also, for the half-year ended June 30, 2022, the company’s total liabilities increased 6% to $7.16 billion.
Its EPS is expected to come in at negative $0.32 for fiscal 2022. SOFI’s shares have declined 61.7% year-to-date to close the last trading session at $6.
It’s no surprise that SOFI has an overall F rating, which translates to Strong Sell in our POWR Rating system.
It also has an F grade for Stability and Quality and a D for Growth and Value. It is ranked #105 of 106 stocks in the F-rated Financial Services (Enterprise) industry.
To see the additional POWR Ratings for Momentum, and Sentiment for SOFI, click here.
Bed Bath & Beyond Inc. (BBBY)
BBBY is an omnichannel retailer offering a range of domestic merchandise, including bed linens, bath items, kitchen textiles, home furnishing items, and other products.
In the fiscal first quarter ended May 28, 2022, BBBY’s net sales decreased 25% year-over-year to $1.46 billion. Its gross profit declined 44.9% year-over-year to $349.31 million, while its operating loss widened 371.9% from the year-ago value to $339.16 million. BBBY’s net loss increased 602% year-over-year to $358 million, while its loss per share came in at $4.49, up 835.4% from the prior-year period.
Street expects BBBY’s loss per share to be $1.80 for the quarter ended August 2022. Its consensus revenue estimate of $1.45 billion represents a 27.1% year-over-year decline in the same quarter.
BBBY has declined 65.8% over the past year to close the last trading session at $8.02.
BBBY’s POWR Ratings reflect its poor prospects. The stock has an overall rating of D, which translates to Sell in our proprietary rating system.
It has an F grade for Stability and Sentiment and a D for Growth and Momentum. In the 62-stock Home Improvement & Goods industry, BBBY is ranked #58.
To see the other ratings of BBBY for Value and Quality, click here.
LCID shares were trading at $15.94 per share on Monday afternoon, down $0.24 (-1.48%). Year-to-date, LCID has declined -58.11%, versus a -17.58% rise in the benchmark S&P 500 index during the same period.
About the Author: Komal Bhattar
Komal's passion for the stock market and financial analysis led her to pursue investment research as a career. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities.
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