Tips for Newbie Growth Stock Investors
Should you buy more, hold, or sell your once high-flying growth stock?
- (1:00) - Stock Market Sell Off: Navigating The Current Market
- (8:25) - Finding Growth Stocks That Are Currently On Sale
- (15:50) - Are The Meme Stocks Still Making A Run?
- (19:00) - The Plan for 2022: Preparing For Future Fed Announcements
- (26:45) - Episode Roundup: UPST, UBER, PYPL, SQ, RBLX, AMC, GME, TSLA, ARKK
Welcome to Episode #298 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.
This week, Tracey talks with Zacks Associate Stock Strategist, and Editor of Zacks Headline Trader service, Dan Laboe, about the growth stock sell-off.
A lot of new investors have jumped into stocks over the last 2 years. For many of them, this growth stock sell-off could be the first “real” sell-off they’ve ever experienced.
Some growth stocks are down 75% over the last year.
Should investors sell, buy more, or hold and do nothing?
Is the Growth Stock Rally Over?
1. Upstart Holdings, Inc. UPST
Upstart is a leading artificial intelligence (AI) lending platform.
Shares of Upstart have plunged 61% over the last 3 months.
It’s still trading at 55x forward earnings, but it now does have forward earnings. Upstart is expected to make $1.93 in 2021 and $2.05 in 2022 with revenue expected to rise another 51% in 2022.
Is Upstart over sold?
2. Uber Technologies, Inc. UBER
Uber went public in Jan 2020. It seems like a different world now.
Uber is more than just ride sharing. Uber Eats and Uber Freight continue to grow quickly.
Uber is expected to grow its revenue by 56.2% in 2022.
Earnings are headed in the right direction, with Uber expected to lose $1.06 in 2021 but only to lose $0.60 in 2022.
Over the last year, shares are down 18.1% so the sell-off hasn’t been as dramatic as with some other growth stocks.
Should investors be considering diving into Uber?
3. PayPal Holdings, Inc. PYPL
PayPal was one of the big, winning fintech stocks of the last 5 years.
But shares took a tumble in 2021 and are now down 36% in the last 6 months.
Yet PayPal is not one of those companies with no earnings. Earnings are expected to rise 11.8% in 2022.
Revenue is also forecast to grow 18% in both 2021 and 2022.
But PayPal is still trading with a forward P/E of 35.
Is this the chance you were waiting for to finally buy this fintech leader?
4. Block SQ
Block was also one of the darlings of fintech over the last few years, especially as it has moved into the cryptocurrency space.
Block shares have fallen 40% over the last 6 months but it doesn’t have the same revenue or earnings growth forecast as PayPal does.
Analysts expect Block’s earnings to rise just 3% in 2022 to $1.69 from $1.64.
Similarly, revenue growth is expected to stall in 2022, with just 3.6% growth.
Block is far from cheap, despite the stock sell-off, with a forward P/E of 85.
Does Block still have more room to fall?
5. Roblox Corp. RBLX
Roblox is an online entertainment platform that brings people together. It’s one of the top online sites for those under 18.
In the last year, Roblox shares are up 28.1% even though over the last month, they’ve fallen 23%.
Analysts expect revenue to rise 194% in 2021 and another 20.5% in 2022. Earnings, however, are still in the negative.
Roblox is expected to lose $0.88 in 2021 and another $0.81 in 2022.
Is it a hidden gem on the stock weakness or should investors stay on the sidelines?
What Else Should You Know About the Growth Stock Sell Off?
Tune into this week’s podcast to find out.
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PayPal Holdings, Inc. (PYPL): Free Stock Analysis Report
Block Inc. (SQ): Free Stock Analysis Report
Uber Technologies, Inc. (UBER): Free Stock Analysis Report
Upstart Holdings, Inc. (UPST): Free Stock Analysis Report
Roblox Corporation (RBLX): Free Stock Analysis Report
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