With little news to push them around, stocks were mostly lethargic on Thursday; not even the advent of deflation got traders off the sidelines and into the game. By the time the closing bell rang, the S&P 500 had wiggled to a mere 0.15% loss.
Shareholders of Workday Inc. (NYSE:WDAY), LKQ Corporation (NASDAQ:LKQ) and Noble Corp plc (NYSE:NE), however, would have loved “just a little lethargy”. These stocks were some of Thursday’s biggest losers, though for understandable reasons.
Workday (WDAY)
With the stock down almost 6% on Thursday, one would think Workday posted disappointing earnings Wednesday evening. That wasn’t the case, though.
Last quarter’s earnings were better than expected. It was the unenthusiastic reaction from some analysts that pulled the rug out from underneath WDAY stock today.
The specifics: The operating loss of six cents per share of WDAY stock was in line with estimates, while revenue of $226.3 million topped the $222.8 million analysts were expecting from cloud computing name Workday. The company also added that it was expecting revenue of somewhere between $242 million and $245 million for the current quarter, versus the average estimate of $239.6 million.
Summit Research’s Richard Williams was one of a handful of analysts that wasn’t particularly impressed, explaining:
“Workday results were a little light on the top line at $18.5m versus our $244.7m estimate and consensus at $240.5m. Subscriptions were a touch below our $197.5m number, with our estimate of over 865 total customers and 158 Financials customers […] With slightly softer growth, the stock’s valuation is still 14.2x, versus 10.5x EV/Sales for high growth peers. This is a 34% premium versus 18% last time, 53% and 88% over the prior 3 quarters. We think the stock is fully valued and prefer to wait for a better entry point.”
LKQ Corporation (LKQ)
Auto parts maker LKQ Corporation didn’t post great numbers for its fiscal fourth quarter, but it was its 2015 outlook that really torpedoed the stock.
In Q4, LKQ Corporation generated a profit of 26 cents per share on $1.68 billion in sales. Analysts had been looking for a profit of 32 cents per share of LKQ stock on $1.68 billion in sales. Per-share earnings were flat with year-ago comparisons, and revenue grew sharply from $1.32 billion in the final quarter of 2013.
This year isn’t going to be nearly as solid, according to the company. LKQ Corporation reported it expects a full-year profit of somewhere between $1.36 and $1.46 per share of LKQ stock. Analysts had been expecting an average of $1.61 per share. That news sent LKQ stock 11% lower for the session.
Noble Corp. (NE)
Just so there’s no confusion, most oil and gas stocks were in the gutter today, Noble Corp. has made this list of the market’s biggest losers, however, because it was the worst of the worst within the energy sector. All told, NE stock lost nearly 7% of its value on Thursday.
The culprit was renewed weakness for crude oil prices. After toying with the idea of a rebound yesterday, crude pulled back nearly 5% to a per-barrel price below $49. It has yet to make new multi-week lows, but it wouldn’t take much to do so. In the meantime, gas and oil plays like Noble Corp. simply pose too much risk for investors to hold onto them.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
