The U.S. markets are under significant pressure so far this year amid lingering record-high inflation and aggressive rate hike expectations. The consequent dampened investor sentiment is evident from the SPDR S&P 500 Trust ETF’s (SPY) 10.7% decline over the past month.
Deutsche Bank economists are convinced a major recession is on the horizon and expect it to be worse than estimated. As a result, the S&P 500 index delivered its worst performance since March 2020 last month.
S&P 500 index constituents Generac Holdings Inc. (GNRC), Etsy, Inc. (ETSY), NVIDIA Corporation (NVDA), Align Technology, Inc. (ALGN), and Netflix, Inc. (NFLX) were the worst-performing stocks in April.
Generac Holdings Inc. (GNRC)
GNRC designs, manufactures, and sells power generation equipment, energy storage systems, and other power products for the residential and light commercial and industrial markets worldwide. The company offers engines, alternators, batteries, electronic controls, steel enclosures, etc.
GNRC’s net sales for the fourth quarter ended December 31, 2021, came in at $1.07 billion, up 40.2% year-over-year. However, its total operating expenses came in at $187.06 million, up 44.8% year-over-year. Moreover, its total comprehensive income came in at $146.75 million, down 3.9% year-over-year. Its cash and cash equivalents came in at $147.34 million, for the period ended December 31, 2021, compared to $655.13 million for the period ended December 31, 2020.
In terms of forward EV/S, GNRC’s 3.00x is 86.9% higher than the industry average of 1.60x. Moreover, its forward P/S of 2.80x is 115.4% higher than the industry average of 1.30x.
Over the past month, the stock has declined 31.7% to close Friday’s trading session at $219.38.
GNRC’s POWR Ratings reflect its poor prospects. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
The stock has a D grade for Momentum and Stability. Click here to access the additional POWR Ratings for GNRC (Growth, Value, Sentiment, and Quality). GNRC is ranked #67 of 76 stocks in the Industrial - Machinery industry.
Etsy, Inc. (ETSY)
ETSY operates two-sided online marketplaces that connect buyers and sellers primarily in the United States, the United Kingdom, Germany, Canada, Australia, France, and India. Its primary marketplace is Etsy.com, which connects artisans and entrepreneurs with various consumers.
On April 11, 2022, around 14,000 ETSY workers started striking to protest the company's hike in transaction fees from 5% to 6.5%. This could affect the company’s future productivity.
ETSY’s revenue for the fourth quarter ended December 31, 2021, came in at $717.14 million, up 16.2% year-over-year. However, its cash and cash equivalents came in at $780.20 million for the period ended December 31, 2021, compared to $1.24 billion for the period ended December 31, 2020. Also, its total current assets came in at $1.34 billion compared to $1.89 billion for the same period. The company’s net long-term debt came in at $2.28 billion compared to $1.06 billion, also for the same period.
In terms of forward EV/S, ETSY’s 4.84x is 333.7% higher than the industry average of 1.12x. Moreover, its forward P/S of 4.31x is 351.5% higher than the industry average of 0.95x.
Analysts expect ETSY’s EPS to decline at a rate of 3.8% to $3.27 in 2022. Moreover, the stock lost 34.8% over the past month to close Friday’s session at $93.19.
ETSY has an overall D grade, equating to a Sell in our POWR Ratings system. Also, it has a D grade for Growth, Value, Stability, and Sentiment.
We’ve also rated it for Momentum and Quality. Click here to access all the ETSY ratings. It is ranked #44 of 72 stocks in the F-rated Internet industry.
NVIDIA Corporation (NVDA)
NVDA provides graphics, computing, and networking solutions in the United States, Taiwan, China, and internationally. Its segments are Graphics and Compute & Networking. The company has a strategic collaboration with Kroger Co.
NVDA’s revenue came in at $7.64 billion for the fourth quarter ended January 30, 2022, up 52.8% year-over-year. However, its total operating expenses came in at $2.03 billion, up 23% year-over-year. The company’s long-term debt came in at $10.95 billion, for the period ended January 30, 2022, compared to $5.96 billion for the period ended January 31, 2021. Its total current liabilities came in at $4.33 billion compared to $3.92 billion for the same period.
NVDA’s forward EV/S of 13.09x is 340.9% higher than the industry average of 2.97x. Its forward P/S of 13.36x is 339.4% higher than the industry average of 3.04x.
Over the past month, NVDA declined 35.3% to close Friday’s session at $185.47.
NVDA’s POWR Ratings are consistent with this bleak outlook. The stock has a D grade for Value and Stability.
We also have graded NVDA for Growth, Momentum, Sentiment, and Quality. Click here to access all of NVDA’s ratings. It is ranked #56 of 96 stocks in the Semiconductor & Wireless Chip industry.
Align Technology, Inc. (ALGN)
ALGN, a medical device company, designs, manufactures and markets Invisalign clear aligners, iTero intraoral scanners, and services for orthodontists, general practitioner dentists, and restorative and aesthetic dentistry. It operates in two segments- Clear Aligner; and Scanners and Services.
ALGN’s net revenues came in at $973.22 million for the fiscal 2022 first quarter ended March 31, 2022, up 8.8% year-over-year. However, its total operating expenses came in at $511.26 million, up 13.2% year-over-year. Its net income came in at $134.30 million, down 33% year-over-year. In addition, its EPS came in at $1.70, down 32.3% year-over-year.
In terms of forward EV/S, ALGN’s 5.05x is 38.6% higher than the industry average of 3.64x. Moreover, its forward P/S of 5.29x is also higher than the industry average of 4.69x by 12.6%.
ALGN’s EPS is expected to decline at the rate of 6.1% to $10.53 in 2022. Also, the stock lost 36% over the past month to close Friday’s session at $289.91.
Under the POWR Ratings, ALGN has been accorded a D grade for Momentum. Click here to access the additional POWR Ratings for ALGN (Growth, Value, Stability, Sentiment, and Quality). It is ranked #50 of 156 stocks in the Medical - Devices & Equipment industry.
Netflix, Inc. (NFLX)
NFLX provides entertainment services. It offers TV series, documentaries, feature films, and mobile games across various genres and languages. It provides DVDs-by-mail membership services in the U.S. and has approximately 222 million paid members in 190 countries.
On April 13, 2022, Maple Heights filed a class-action lawsuit against NFLX, arguing that the company must pay franchise fees to municipalities like cable companies. A recent fall in subscribers might create further pressure for the company in the near term.
NFLX’s revenues came in at $7.87 billion for the fiscal 2022 first quarter ended March 31, 2022, up 9.8% year-over-year. However, its net income came in at $1.60 billion, down 6.4% year-over-year. Its EPS came in at $3.53, down 5.9% year-over-year. Moreover, its cash and cash equivalents came in at $6.01 billion for the period ended March 31, 2022, compared to $6.03 billion for the period ended December 31, 2021.
NFLX’s forward EV/S of 2.96x is 40.5% higher than the industrial average of 2.10x. Its forward P/S of 2.61x is 79.7% higher than the industry average of 1.45x.
NFLX’s EPS is estimated to fall 12.2% to $2.80 in the quarter ended September 2022. Over the past month, the stock lost 51.4% to close Friday’s session at $190.36.
According to our POWR Ratings, NFLX has a D grade for Momentum. Click here to check additional NFLX ratings. It is ranked #19 of 72 stocks in the F-rated Internet industry.
GNRC shares were trading at $222.08 per share on Monday morning, up $2.70 (+1.23%). Year-to-date, GNRC has declined -36.89%, versus a -13.29% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.
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