What Happened?
Shares of neighborhood social network Nextdoor (NYSE: KIND) fell 4.5% in the afternoon session after a Citigroup analyst lowered the price target on the stock, citing potential near-term challenges. Analyst Jamesmichael Sherman-Lewis adjusted the price target down to $2.20 from $2.40, an 8.33% decrease. Despite the lower target, the firm kept its "Neutral" rating on Nextdoor's shares. This action suggested that while the bank's view on the company's performance remained steady, it saw less upside in the stock's price in the near future. The move came at a time when the general investor mood appeared fragile, with concerns that some stock valuations may have run too far.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Nextdoor? Access our full analysis report here.
What Is The Market Telling Us
Nextdoor’s shares are very volatile and have had 24 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 9 months ago when the stock dropped 32.5% on the news that the company reported weak fourth-quarter 2024 results: its number of weekly active users fell short of expectations, and revenue and EBITDA guidance for the next quarter missed Wall Street estimates, signaling a tougher road ahead. Revenue guidance reflects a decline in ad impressions as Nextdoor prioritizes product transformation over immediate monetization, while EBITDA guidance suggests a return to losses. Overall, while the quarter delivered a strong margin turnaround, the softer guidance and user growth challenges raise concerns about near-term execution risks.
Nextdoor is down 29.5% since the beginning of the year, and at $1.71 per share, it is trading 38% below its 52-week high of $2.75 from February 2025. Investors who bought $1,000 worth of Nextdoor’s shares at the IPO in March 2021 would now be looking at an investment worth $170.50.
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