Why QUALCOMM, Inc. (QCOM), eBay Inc (EBAY) and ServiceNow Inc (NOW) Are 3 of Today’s Worst Stocks

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It was touch-and-go for the better part of the day as investors continued to digest yesterday’s comments from the Fed, which loosely suggested the economy wasn’t as firm as it could be. But, with nothing dire surfacing in the meantime — and with a light at the end of the tunnel possibly starting to shine for crude oil — stocks finally found some stability in positive territory.

Why QUALCOMM, Inc. (QCOM), eBay Inc. (EBAY) and ServiceNow Inc. (NOW) Are 3 of Today's Worst StocksNot every name did well on Thursday, however. eBay Inc (NASDAQ:EBAY), QUALCOMM, Inc. (NASDAQ:QCOM) and ServiceNow Inc (NYSE:NOW) all fell deep into the red as investors reacted to poor guidance.

ServiceNow Inc (NOW)

As has been the case with many stocks this earnings season, ServiceNow was pummeled, despite encouraging results, undermined by a lackluster 2016 outlook.

Last quarter, ServiceNow earned 20 cents per share on revenue of $285.7 million. That top line was more than 40% better than the year-ago figure, and analysts were only calling for a per-share profit of 8 cents and sales of $281 million.

So, why the 17% plunge for NOW shares? The cloud-computing company says it’s only looking for revenue between $1.34 billion-$1.37 billion in 2016… a range that just barely reaches the average estimate of $1.37 billion.

The numbers and outlook were disappointing enough to prompt action from analysts. MKM Partners and Mizuho both downgraded NOW from “Buy” to “Neutral.” Not every professional stock picker has soured on ServiceNow, however. Canaccord Genuity reiterated its buy rating on the stock and maintained its $90 target price.

eBay Inc (EBAY)

Just like ServiceNow, eBay did well enough last quarter. It’s just not expected to do well enough this quarter — or this year — to satisfy shareholders, who sent the stock south to the tune of %12.

Last quarter, the online auction outfit earned 50 cents per share on $2.32 billion in sales. Both numbers were right in line with estimates.

Still, revenue was just a hair lower than the Q4-2014 top line, and last quarter’s per-share earnings was a nickel shy of the 55 cents per share that EBAY stock earned a year earlier.

Fanning the bearish flames was the guidance eBay offered. The company expects to report a profit between 43 cents-45 cents per share for Q1, versus analyst estimates of 48 cents. For the year, the company is now calling for income between $1.82-$1.87 per share, while the pros had modeled an average profit of $1.98.

QUALCOMM, Inc. (QCOM)

Last but not least, in sync with eBay and ServiceNow, phone maker QUALCOMM up-ended reasonably-good fourth-quarter results with a warning that the current quarter’s numbers wouldn’t be great.

Last quarter — the company’s first fiscal quarter of the year — QUALCOMM earned 97 cents per share versus estimates of 90 cents. Revenue of $5.8 billion rolled in better than the anticipated $5.69 billion. Both numbers were lower than year-ago results, however, suggesting the organization is already facing the headwind it sees causing problems for Q2. Analysts were calling for a second quarter profit of $1.02 per share of QCOM, but management only sees profits rolling in between 90 cents and $1.00 per share.

This may not be the last of the weak results. Sanford C. Bernstein analyst Stacy Rasgon noted, “Their issues are structural and not going away. The market is saturating. The competitive environment is getting worse.”

QCOM stock ended the day down 8%.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/01/qualcomm-inc-qcom-ebay-inc-ebay-servicenow-inc-now-3-todays-worst-stocks/.

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