Friday is set to be a big day for U.S. markets, with President Trump expected to push ahead with new tariffs on Chinese imports and Uber — the unicorn of unicorns that really represents the current VC-backed craze — debuts in its eagerly awaited IPO.
Expectations are extremely high, as billions in private capital has funneled into pre-IPO companies in the hope of getting in early on the next Amazon (NASDAQ:AMZN) or Facebook (NASDAQ:FB). But all the capital available has resulted in many companies staying private longer, avoiding the rush to IPO that typified prior cycles, and thus seeing valuations soar in multiple venture capital funding rounds.
Uber could mark the end of this amid a recent rush to get out the door as stocks have pushed to new record highs in recent days. The action has the feeling of musical chairs, with everyone rushing to cash out before the music stops.
But with many newly minted IPOs showing modest, at best, financial performance it’s unsurprising many are faltering under the scrutiny that comes with being publicly traded. Here are four recent IPOs that have fallen flat:
Lyft (LYFT)
Uber’s most direct competitor here in the U.S., Lyft (NASDAQ:LYFT), IPO’d in late March to great fanfare only to see its stock crater in the weeks that followed. A fresh breakdown is underway now, taking shares below a two-month consolidation range. Uber is sucking the air out of the room, alongside a drivers’ strike and realization that the road to profitability will be long and troubled and unlikely to be driven by the dockless bikes and scooters you see littered on the streets of America’s largest cities.
The company will next report results on Aug. 6 after the close. The company last reported on May 7 with a loss of $9.02 per share beating estimates by $1.86.
Snap (SNAP)
Shares of Snapchat parent Snap (NYSE:SNAP) have crossed back below their 50-day moving average in what looks like the beginning of the end for the powerful uptrend that started in January and saw shares jump more than 50%. Watch for prices to drift lower on profit-taking as SNAP stock remains well below its 2017 IPO price. Analyst opinion has been mixed, with a series of downgrades in April followed by a batch of upgrades in May.
The company will next report results on July 23 after the close. Analysts are looking for a loss of 21 cents per share on revenues of $359.1 million. When the company last reported on April 23, a loss of 10 cents per share beat estimates by 2 cents on a 38.9% rise in revenues.
Stitch Fix (SFIX)
Clothes-in-a-box provider Stitch Fix (NASDAQ:SFIX) debuted to great fanfare in late 2017 as it seemed poised to disrupt the fashion industry with its army of stylists and its “try at home” convenience. But shares have lost roughly 50% from their post-IPO high and are mired in a trading range below its 200-day moving average as competitors popped up and heavyweights like Amazon have waded into its territory.
The company will next report results on June 10 after the close. Analysts are looking for a loss of 1 cent per share on revenues of $395.1 million. When the company last reported on March 11, earnings of 12 cents per share beat estimates by 7 cents on a 25% rise in revenues.
Sonos (SONO)
Bluetooth speaker maker Sonos (NASDAQ:SONO) IPO’d in the summer of 2018 and has since also lost roughly 50% from its post-IPO high. Shares have once again cut below its 50-day moving average and remain mired in a six-month consolidation range. The space is highly competitive, with Amazon and Apple (NASDAQ:AAPL) among the heavyweights pushing into the space as the company lacks a strong economic moat or unique intellectual property.
The company will next report results on May 9 after the close. Analysts are looking for a loss of 35 cents per share on revenues of $215.6 million. When the company last reported on Feb. 6, earnings of 55 cents per share beat estimates by 11 cents on a 193.5% rise in revenues.
As of this writing, William Roth did not hold a position in any of the aforementioned securities.
