Why FireEye Inc (FEYE), Amazon.com, Inc. (AMZN) and Chipotle Mexican Grill, Inc. (CMG) Are 3 of Today’s Worst Stocks

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Investors responded bullishly to the better-than-expected jobs report for January, though they couldn’t quite make the trek to record-high levels. They’re close though: The S&P 500 ended the day at 2,297.42, up 0.73%.

Why FireEye Inc (FEYE), Amazon.com, Inc. (AMZN) and Chipotle Mexican Grill, Inc. (CMG) Are 3 of Today's Worst StocksNot every stock participated in the rally though. FireEye Inc (NASDAQ:FEYE), Amazon.com, Inc. (NASDAQ:AMZN) and Chipotle Mexican Grill, Inc. (NYSE:CMG) each ended the day deep in the red, sent lower thanks to alarming earnings reports.

Chipotle Mexican Grill, Inc. (CMG)

Just when it looked like Tex-Mex eatery Chipotle Mexican Grill was finally starting to find its way out of a hole it dug for itself (CMG shares are up 18% since their early-November low, following a 50% meltdown), it slips back into that it.

Chipotle Mexican Grill, famous for its custom-built burritos, hit a wall last year when the restaurant chain was identified as the source of an E. coli outbreak that ultimately infected a few dozen patrons in various locales. The dinged reputation has crimped sales, but the company has to forge ahead.

And it has. It’s just not doing it as quickly as expected. The company earned 55 cents per share on sales of $1.03 billion last quarter, versus expectations for earnings of 57 cents per share of CMG and a top line of $1.04 billion.

Founder, Chairman and CEO Steve Ells commented:

“Returning to our roots of what originally made Chipotle great has helped refocus all of our strategies toward the guest experience. In the upcoming year we intend to continue to simplify and improve our restaurant operations, utilize creative marketing to rebuild our brand, and further the roll-out of our digital sales efforts. All three of these strategic initiatives are centered on improving the guest experience and restoring customer affinity for the Chipotle brand, and we are confident in our teams’ abilities as we start this new year.”

The market’s not convinced though. CMG closed 4.5% lower for the day.

Amazon.com, Inc. (AMZN)

E-commerce behemoth Amazon.com may have managed to top last quarter’s earnings estimate, but the sales miss and sales slowdown spooked shareholders, who sent AMZN to a loss of 3.5%.

For the quarter ending in December, Amazon.com earned $1.54 per share on sales of $43.7 billion. That top line was up 22%, and profits beat expectations for earnings of only $1.35 per share of AMZN.

But, sales missed expectations, and they missed in the one place where Amazon couldn’t afford to fall short. Amazon Web Services, which has driven the bulk of its recent revenue growth, added $3.54 billion to the top line, but analysts were calling for $3.6 billion worth of revenue from AWS. That shortcoming prompted a slew of analyst downgrades of AMZN.

FireEye Inc (FEYE)

Last but not least, while cybersecurity outfit FireEye has to get credit for making a valiant effort to become viable, it’s just not working.

For its fourth fiscal quarter of last year, FireEye’s revenue of $184.7 million missed estimates of $191 million despite several initiatives taken on last year to boost sales. The loss of only 3 cents per share handily topped expectations for a loss of 16 cents per share of FEYE, but that wasn’t enough to distract shareholders from the top-line weakness or the fact that CFO Mike Berry and board chairman David DeWalt are both stepping down.

The stock took a 15.7% loss for the day.

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


Article printed from InvestorPlace Media, https://investorplace.com/2017/02/why-fireeye-inc-feye-amazon-com-inc-amzn-and-chipotle-mexican-grill-inc-cmg-are-3-of-todays-worst-stocks/.

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