Despite the uncertain start to the day’s trading, once the bulls decided February’s solid employment numbers were a reason to trade bullishly, they never looked back. The S&P 500’s close of 1999.98 today was 0.33% better than Thursday’s close, and 2.66% higher than the prior week’s closing level.
Not every stock managed to fight its way back into the black today, however. Hologic, Inc. (NASDAQ:HOLX), Ambarella Inc (NASDAQ:AMBA) and H & R Block Inc (NYSE:HRB) each to finished today’s trading session oddly deep in the red. Here’s what investors need to know about these pullbacks.
Hologic, Inc. (HOLX)
Anyone hoping activist investor Carl Icahn would be able to work a little magic and unlock some value pent up within healthcare equipment company Hologic was thrown a bit of the curve ball today. As it turns out, Icahn can’t.
Although Carl Icahn still owns more than 25 million shares of HOLX, the sale and the resignation of the two board members suggests he’s not interested in pursuing any further change after targeting Hologic in late 2013.
Nevertheless, Icahn did what he set out to do. As of the end of 2013, HOLX shares were trading at $22.32. Even with the big pullback since August of last year and today’s 3% selloff, Hologic shares are valued near $35.
H & R Block Inc (HRB)
Tax preparer H & R Block is going into its busy time of year on a low note. Last quarter — its third fiscal quarter of 2016 — the per-share loss widened from 13 cents per share to 34 cents per share this time around. Analysts were only expecting a loss of 24 cents per share of HRB. Revenue of $474.5 million also missed analysts’ outlooks for a top line of $509.07 million.
The sale of the bank unit in the meantime, as well as currency headwinds, contributed to the disappointing number. The bulk of the setback, however, seemed to be a simple lack of tax-preparation customers.
Credit Suisse analyst Anjaneya Singh opined:
“We view HRB’s trends in the tax season as disappointing so far. While HRB continues to execute well on pricing, and monetization/mix, the company has now entered its 4th consecutive year of volume declines. The incremental negative surprise this tax season is that HRB lowered its EBITDA margin guidance due to the light volumes. Fraud in the industry continues to be the largest factor in share losses to DIY, but does not seem to entirely indicate the company’s market share losses. Further, the DIY business and the ACA volume are both underperforming vs. expectations. Although we expect an improvement in many of these trends as we get later into the tax season, it is uncertain if HRB will be able to maintain market share in the assisted segment.”
HRB shares ended the session down more than 16%.
Ambarella Inc (AMBA)
Last, but certainly not least, Ambarella shares lost more than 9% of their value on Friday after reporting Q4 results and issuing guidance for the current quarter.
The fourth-quarter numbers were better than expected. The company earned 53 cents per share on revenue of $64.7 million. The pros were only calling for a bottom line of 48 cents per share and a top line of $56.6 million.
The prod for the pullback stemmed from its revenue outlook for fiscal Q1 of 2017. The company now anticipates revenue of $55 million-$57 million, vs. analyst estimates of $62.4 million. Profits are also expected to roll in below levels estimated by analysts.
Analysts remained mostly optimistic on AMBA, but also lowered their target prices on the stock. FBN Securities, for instance, lowered its target on Ambarella from $70 to $60, while Pacific Crest lowered its target price for AMBA to $62.
The stock closed at $42.11.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
