10 Stocks At Risk For Massive Losses
A high P/E ratio indicates investors are anticipating higher growth in the future. But what happens when these companies miss? Here are 10 stocks at Risk!
As of June 14th 2019, McDonalds had a PE ratio of 27.21. For a company that’s missed on two earnings release in a row, McDonalds stock continues to rise and its bewildering. Sure, yes, they are expanding internationally and the digital order board filled with feases are a nice trick but that doesnt justify a company’s stock continuing to go up when expectations arent being met. This is truly the sign of the times. With such a trend in PE ratio, it is not certain for how long investors will be lovin’ it.
With an Initial Public Offering of $20 per share in 2015 the stock quickly tripled by 2018. During this time what’s been left behind is the inability for the company to generate profit. From what little earnings it has it’s generated a P/E of nearly 150 as of 2018. Investors may just be left with the option to “Go” if they miss big on any earnings report anytime soon.
Planet Fitness $PLNT
It’s a nice time to be an executive at Planet Fitness right now. The CEO has sold over $17 million in stock since Janurary. At a PE ratio of 74.23, the company has enjoyed the benefits of being a consistent earnings winner that somehow barely generates any profit. Planet Fitness is all about a “judgement free zone” but its about time investors wake up and start judging its valuation.
In a report by The CNBC, it was pointed out that an increasing number of skeptics were convinced that Uber shares will be overvalued the day they go public. Uber offered 180 million shares at $44 to $50 apiece at its debut to the public market in 2019 before hitting the low of the year the very next day at $36 as of this writing 6/20/2019. Uber seems to be helping millions of investors move towards uncertainty in the future about its potential to ever be a profitable company.
What Lyft did to investors on its first day in the public market in 2019 should be labeled a crime. Going into earnings, there were a number of concerns from tech analysts about the company being overvalued at proposed IPO. After hitting $87.24 per share during its debut at the high, the stock then closed at 78.22 and hasn’t seen those prices since. This may be a ride that investors may fail to enjoy.
Beyond Meat $BYND
Beyond meat shares have soared to 500% in 2019 since its debut. The inconsistencies in their stock price had analysts and investors trying to make sense of it all. According to CBS news, critics claimed that Beyond Meat’s stock market value wasn’t justified given that the company was not generating enough in revenue considering how large their stock market value is (larger than Wendy’s and Shake Shack’s combined). Shrinking margins, increasing competition and relatively slow adoption will make it very difficult to predict what to expect in the future of Beyond Meat.
Square Inc. $SQ
Even though they did deliver and even surpass the expectations of analysts in the first quarter, Square Inc’s outlook for the second quarter was disappointing. Square is an incredibly volatile stock that can turn on you in a moments notice. Its future is uncertain because it has yet to develop products to define itself from its 10 ton competitor Paypal. Square has yet to achieve profitability.
Wayfair Inc. $W
Wayfair’s in my opinion is one of the most manipulated stocks of all time. The company cleverly uses its float to prevent short selling and produce manipulated price action. It is regularly noted that the stock will sometimes move as much as $20 or $30 on as little as $200,000 worth of volume. The company is far from profitable and has no path to profitability.
Grubhub Inc. $GRUB
Currently trading at a P/E of 119.77, Grubhub was once the darling of the GIG economy. It is now down nearly 50% from its 2018 highs. Even at its currently valuation, it is grotesquely overpriced as it continues to generate massive losses and barely any real shareholder value.
Under Armor $UA
Under Armor’s PE ratio was at an exceptional 772.33 in June 2019 and its stock price was $27.07. That’s exactly the kind of P/E you get when you don’t bring in any real money. According to Tyndal times, Under Armor shares have a target price of 22.33, a number of consensus from estimates by polled analysts yet the stock was trading at $23.49 at that time. Investors may want to have some armor underneath as they proceed with their stocks.