The stock market has been under tremendous pressure since the start of 2022 due to the Fed’s continued aggressive rate hikes to rein in inflation and the growing possibility of an economic recession. Inflation is constantly hovering around its multi-decade high and shows no signs of slowing down. Analysts expect another outsized rate hike in November as The September CPI report arrived hotter than expected.
Macroeconomic uncertainties are weighing on investor sentiment and the market is seeing a general sell-off. According to Jamie Dimon, CEO of JPMorgan Chase, the S&P 500 could still fall significantly. He warned that a “very, very serious” mix of macroeconomic headwinds could tip the global economy into recession by the middle of next year.
Given the backdrop, we believe investors should avoid fundamentally weak Payoneer Global Inc. (PAYMENT), ContextLogic Inc. (TO WISH), LL Flooring Holdings, Inc. (LL) and Mullen Automotive, Inc. (MULN), the price of which has fallen in recent times.
Payoneer Global Inc. (PAYMENT)
PAYO is a cross-border payment and commerce platform that facilitates online marketplaces, platforms and merchants worldwide. The company offers a wide range of services, including cross-border payments, tax solutions, working capital, merchant services and risk management. It is aimed at digital businesses, online sellers and freelancers to manage their international payments.
For the fiscal second quarter ended June 30, 2022, PAYO’s total operating expenses increased 16.3% year-over-year to $150.39 million. Its operating loss was $2.20 million. As of June 30, PAYO’s total liabilities stood at $5.30 billion, up 15.4% from December 31, 2021.
Street expects PAYOs PES to come in at minus $0.01 for the fiscal year ending December 2023. In terms of EV/futures, PAYO is currently trading at 3.51x, 40.2% higher than the industry average of 2 .50x. Its price-to-forward multiple of 4.29 is 75.7% above the industry average of 2.44.
Over the past year, PAYO’s stock price has fallen 12.8%. It closed its last trading session at $7.41.
PAYO POWR Rankings reflect these bleak outlooks. The stock has an overall rating of D, which is equivalent to Sell in our proprietary rating system. POWR ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
PAYO also has a value, momentum, growth and stability rating of D. In the F-rated 104-stock Financial Services (Corporate) industry, PAYO is ranked #81.
Click here to see additional POWR ratings for PAYO (quality and sentiment).
ContextLogic Inc. (TO WISH)
WISH, an e-commerce company operates an e-commerce platform that connects users to merchants in Europe, North America, South America and internationally. The company also provides market and logistics services to its traders.
WISH’s revenue decreased 79.6% year-on-year to $134 million in the second quarter ended June 30, 2022. Its gross profit decreased 89.1% from the prior year quarter to 42 millions of dollars. The company reported an operating loss of $91 million, while its net loss was $90 million. Additionally, its cash and cash equivalents were $693 million, down 31.3% for the six months ended June 30, 2022.
The negative EPS consensus estimate of $0.17 indicates a 220.8% year-over-year decline for the quarter ended September 2022. Additionally, the revenue consensus estimate of $155.98 million represents a 57.6% year-over-year decline over the same period.
WISH’s futures price/sales multiple of 0.71 is 13.9% below the industry average of 0.82. Its forward Price/Book multiple of 1.13 is 52.8% below the industry average of 2.40.
Shares of the company have fallen 84.9% over the past year and 75.6% since the start of the year to close its last trading session at $0.76.
WISH’s weak outlook is reflected in its POWR ratings. The stock has an overall rating of D, which is equivalent to Sell in our proprietary rating system.
WISH has an F rating for stability and a D for quality. Of the 63 shares listed F the Internet industry, WISH is ranked #52.
Beyond what is shown above, you can view WISH Ratings for Growth, Momentum, Value and Sentiment here.
LL Flooring Holdings, Inc. (LL)
LL operates as a multi-channel specialist retailer of hard surface flooring and its enhancements and accessories. The company offers a variety of products, including hardwood species, waterproof vinyl planks, engineered hardwood, laminate, bamboo, porcelain tile and others, under its Bellawood and Coreluxe brands. It also offers home delivery and installation services.
For the fiscal quarter ended June 30, 2022, LL’s total net sales decreased slightly year-over-year to $298.96 million. Operating profit and net profit were $4.66 million and $2.74 million, down 71.9% and 77.2% year-on-year, respectively . During the same period, the company’s EPS was $0.09, indicating a 78% decline from the prior year quarter.
Analysts expect LL’s EPS to decline 10.3% year-over-year to $0.26 for the fiscal quarter ending September 2022. Additionally, the company’s EPS is expected to reach $0.75 for FY2022, indicating a 46% year-over-year decline.
In terms of forward EV/EBITDA, LL is currently trading at 7.43x, 10.6% below the industry average of 8.32x. Its non-GAAP P/E multiple of 9.79 is 19.8% lower than the industry average of 12.20.
The stock has fallen 60.3% over the past year and 57% year-to-date to close the last trading session at $7.35.
LL’s POWR ratings reflect his poor outlook. It is ranked No. 49 out of 61 stocks in the Home improvement and goods industry. To see more component grades from LL, Click here.
Mullen Automotive, Inc. (MULN)
MULN is an electric vehicle company that manufactures and distributes electric vehicles. Additionally, the Company operates CarHub, a digital platform that leverages AI to provide an interactive solution for buying and selling a car. It also offers battery technology and point-of-care emergency solutions.
For the fiscal quarter ended June 30, 2022, the company’s operating loss increased 184.5% year-over-year to $18.22 million. Net loss increased 289.9% from the year-ago period to $59.47 million, while its net loss per share was $0.16.
MULN’s trailing 12-month price-to-book multiple of 5.63 is 182.8% higher than the industry average of 1.99.
Shares of MULN are down 97.1% over the past year and 95.9% year-to-date to close the last trading session at $0.22.
It’s no surprise that MULN has an overall rating of F, which translates to a strong sell in our proprietary rating system.
It also has an F rating for value and stability and a D for sentiment and quality. MULN is ranked No. 57 out of 65 D-rated stocks Automobile and vehicle manufacturers industry.
To access MULN’s POWR ratings for growth and momentum, Click here.
PAYO shares were trading at $7.22 per share on Wednesday afternoon, down $0.19 (-2.56%). Year-to-date, PAYO is down -1.77%, compared to a -21.53% rise in the benchmark S&P 500 over the same period.
About the Author: Komal Bhattar
Komal’s passion for the stock market and financial analysis led her to pursue her career in investment research. Its fundamental approach to stock analysis helps investors identify the best investment opportunities. After…