PLUG, AMC, SOFI, and 1 Other Stock Moving Lower in 2022 Since concerns about the Fed's potential rate hikes and the possibility of further economic contraction are expected to keep the stock market under pressure, fundamentally weak stocks that are on...
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Since concerns about the Fed's potential rate hikes and the possibility of further economic contraction are expected to keep the stock market under pressure, fundamentally weak stocks that are on a downtrend this year, such as Plug Power (PLUG), SoFi Technologies (SOFI), AMC Entertainment (AMC), and Forge Global Holdings (FRGE), could be best avoided now. Let's discuss….
With inflation persisting near its highest level in decades, consumers remain worried as they continue to feel a pinch in their pockets due to rising prices. Despite multiple interest rate hikes this year, the Fed reiterated its stance to remain hawkish at the annual Jackson Hole conference last month. Fed Chairman Jerome Powell warned that the economy would face "some pain."
Goldman Sachs expects the Fed to hike interest rates by 75 basis points this month and 50 basis points in November. Moreover, the recent macroeconomic data and a slowing economy have led Wall Street analysts to cut their corporate-earnings expectations for the third quarter.
Since the Fed intends to keep raising rates to bring inflation down to its target level, the market is expected to remain under pressure on recession fears.
Plug Power Inc. (PLUG), SoFi Technologies, Inc. (SOFI), AMC Entertainment Holdings, Inc. (AMC), and Forge Global Holdings, Inc. (FRGE) are on a downtrend this year. Given their weak fundamentals and growth prospects, these stocks might keep losing. So, it could be wise to avoid them.
Plug Power Inc. (PLUG)
PLUG is a leading provider of comprehensive hydrogen fuel cell (HFC) turnkey solutions. The company offers end-to-end clean hydrogen and zero-emissions fuel cell solutions for supply chain and logistics applications, on-road electric vehicles, the stationary power market, and more. In addition, it manufactures and sells fuel cell products to replace batteries and diesel generators in stationary backup power applications.
During the second quarter ended June 30, 2022, PLUG's total operating expenses increased 131.9% year-over-year to $114.44 million. The company's operating and net losses widened 63.9% and 73.9% from the year-ago value to $146.91 million and $173.29 million, respectively. Also, its loss per share came in at $0.30, widening 66.7% year-over-year.
Analysts expect PLUG's EPS to be negative for fiscal 2022. It has failed to surpass the consensus EPS estimates in each of the trailing four quarters. The stock has declined 24.6% over the past nine months and 2.7% year-to-date to close the last trading session at $27.47.
PLUG's POWR Ratings are consistent with this bleak outlook. The stock has an overall rating of F, which translates 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 has an F grade for Stability, Sentiment, and Quality and a D for Growth and Value. Within the Industrial – Equipment industry, it is ranked #86 of 92 stocks. To see the PLUG's rating for Momentum, click here.
SoFi Technologies, Inc. (SOFI)
SOFI is a digital financial services company that operates through lending, financial services, and technology platforms. The company's lending segment offers student, personal, and home loans. On the other hand, the financial services segment provides cash management and investment services through SoFi Money, SoFi Invest, SoFi Credit Card, and SoFi Relay. In addition, its technology platform offers the benefits of Galileo and Apex.
SOFI's net loss for the fiscal second quarter ended June 30, 2022, came in at $95.84 million, narrowing 42% from the year-ago period. Its loss per share narrowed 75% year-over-year to $0.12. Its noninterest expense increased 15.5% year-over-year to $458.24 million. As of June 30, 2022, the company's total liabilities increased 6% to $7.16 billion, from the year-end value of $4.47 billion on December 31, 2021.
Analysts expect SOFI's EPS for fiscal 2022 to be negative. Shares of SOFI have declined 63.2% year-to-date to close the last trading session at $5.82.
SOFI'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.
It has an F grade for Stability and Quality and a D for Growth, Value, and Sentiment. It is ranked #106 out of 107 stocks in the F-rated Financial Services (Enterprise) industry. Click here to see more of SOFI's POWR Ratings.
AMC Entertainment Holdings, Inc. (AMC)
AMC is a leading theatrical exhibition company that delivers distinctive and movie-going experiences. The company owns, operates, and has interests in theaters in the United States and internationally. It operates more than 950 theaters and 10,600 screens.
In the second quarter ended June 30, 2022, AMC's operating costs and expenses increased 59.5% year-over-year to $1.18 billion. Its operating loss and net loss narrowed 94.6% and 64.6% from their year-ago values to $16.10 million and $121.60 million, respectively. Also, AMC's adjusted loss per share came in at $0.20, narrowing 71.8% year-over-year.
Analysts expect AMC's EPS for fiscal 2022 to remain negative. Its EPS is expected to decrease 217% per annum over the next five years. The stock has lost 69.1% year-to-date to close the last trading session at $8.39.
AMC's POWR Ratings reflect this bleak outlook. It has an overall rating of D, equating to a Sell in our proprietary rating system. It has an F grade for Stability and Sentiment. Within the Entertainment - Movies/Studios industry, it is ranked #6 of 7 stocks.
Beyond what I've stated above, we have also given AMC grades for Growth, Value, Momentum, and Quality. Get all AMC ratings here.
Forge Global Holdings, Inc. (FRGE)
FRGE offers marketplace infrastructure, data services, and technology solutions to private market participants. It enables private company shareholders to trade private company shares with accredited investors.
FRGE's total revenues declined 57% year-over-year to $16.64 million for the second quarter ended June 30, 2022. Its operating expenses increased 12.3% year-over-year to $42.51 million. The company's operating loss widened significantly from the year-ago value to $26.05 million, while its net loss and comprehensive loss narrowed 36% year-over-year to $5.12 million.
FRGE's net loss per share widened 33.3% from the year-ago period to $0.20. Also, its adjusted EBITDA loss came in at $12.27 million, compared to an adjusted EBITDA of $6.53 million in the prior year's quarter.
Street expects FRGE's EPS to be negative for fiscal 2022. The stock has declined 60.5% year-to-date to close the last trading session at $3.89.
FRGE's POWR Ratings reflect its bleak prospects. It has an overall D rating, equating to a Sell in our proprietary rating system.
It has an F grade for Value and Quality and a D for Momentum and Stability. It is ranked #93 in the Financial Services (Enterprise) industry. Click here to see the other ratings of FRGE for Growth and Sentiment.
PLUG shares were trading at $28.24 per share on Thursday morning, up $0.77 (+2.80%). Year-to-date, PLUG has gained 0.04%, versus a -15.69% rise in the benchmark S&P 500 index during the same period.
About the Author: Shweta Kumari
Shweta's profound interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help retail investors make educated investment decisions.
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