3 Stocks That Have Analysts Running for the Exit

  • Decelerating momentum and limited profitability prospects make these stocks analysts hate.
  • Bed Bath & Beyond (BBBY): The meme stock continues to burn cash due to supply chain problems.
  • Netflix (NFLX): The significant decline in subscribers is expected to continue through the second quarter.
  • Vaxart (VXRT): Negative results from its oral tablet for Covid-19 could send shares crashing. 
stressed businessman

Source: Shutterstock

Increased market volatility is exposing stocks that fail to meet investor expectations as they deliver poor earnings results, a common feature among stocks analysts hate.

Fears of a recession are causing investors to trim positions on Wall Street. As a result, U.S. stocks have recently seen the largest outflows of 2022 exceeding $15 billion. The S&P 500 is down more than 10% year-to-date, while the tech-heavy Nasdaq 100 has declined 18.2% during the same period.

Although many investors are returning to cash, others are searching for bargains that may rally in the short term. After all, one of the best times to buy stocks is after significant declines.

However, not all cheap shares necessarily offer value now, and their prices could easily stay depressed for many months. With that information, here are three stocks that have analysts running for the exit due to their risky market prospects.

BBBY Bed Bath & Beyond $15.61
NFLX Netflix $198.40
VXRT Vaxart $3.61

Stocks Analysts Hate: Bed Bath & Beyond (BBBY)

bed bath & beyond storefront (BBBY)

Source: Shutterstock

Bed Bath & Beyond (NASDAQ:BBBY) operates 1,000 home goods stores across North America. The retailer sells a wide range of branded bed and bath accessories, kitchen textiles, and cooking supplies.

Bed Bath & Beyond released Q4 2021 results on Apr. 13. Revenue declined 22% year-over-year to $2.05 billion. The adjusted net loss per diluted share was 92 cents, compared to adjusted earnings per share of 40 cents in the prior-year quarter. Cash and equivalents ended February at $471 million, down from $1.4 billion a year ago.

Revenue fell 12% at existing locations, following the 7% drop in the previous quarter. The retailer failed to secure enough inventory due to supply chain issues. Management is currently opening new distribution centers to mitigate supply chain-related problems.

However, Wall Street is not convinced that step will be enough to mitigate current issues. In recent days. Telsey Advisory Group downgraded Bed Bath & Beyond to “market perform.”

In other words, BBBY remains a risky meme stock. Despite a 26% dip over the past month, it is up almost 20% YTD. Shares trade at 16.1 times forward earnings and 0.2 times trailing sales.

Meanwhile, the 12-month median price forecast for BBBY stock stands at $12. Therefore, long-term investors need to be cautious with this meme name.

Netflix (NFLX)

The Netflix (NFLX) logo on a tablet with earbuds and a bowl of popcorn nearby.

Source: Riccosta / Shutterstock.com

Netflix (NASDAQ:NFLX) has around 221.64 million paid subscribers globally.

Netflix released Q1 2022 results on Apr. 19. Revenue increased 9.8% year-over-year to $7.9 billion.

Diluted earnings came in at $3.53 per share, compared to $3.75 per share a year ago. Free cash flow stood at $802 million. Cash and equivalents ended the period at $6 billion.

Wall Street was not forgiving when Netflix said it lost about 200,000 subscribers during the quarter. It was the first-ever decline in subscriber growth in almost a decade. The subscriber drop came as the company suspended its streaming service in Russia, leading to a net loss of 700,000 subscribers.

Management also remarked the decline in subscribers could continue through the second quarter. Netflix attributed the sluggish growth in part to its high household penetration as well as the high amount of account sharing on its platform. We also have seen rising competition in the streaming space.

For now, investors’ love affair with NFLX is at a pause as the stock is down 64% year-to-date. It has recently been hit with close to a dozen downgrades.

Yet, following the decline, shares have a more attractive valuation at 31.8 times forward earnings and just 3.2 times trailing sales. Meanwhile, the 12-month median price forecast for Netflix stock stands at $300.

Stocks Analysts Hate: Vaxart (VXRT)

The Vaxart (VXRT) logo is surrounded by face masks, syringes and pills.

Source: Ascannio / Shutterstock.com

Vaxart (NASDAQ:VXRT), is a clinical-stage biotech company working on a range of oral vaccines.

Its pipeline includes eight vaccine candidates against several infectious diseases such as the coronavirus, norovirus, and seasonal flu. As Vaxart currently has no products on the market, it is not possible to talk of real revenue.

Vaxart reported Q4 2021 results on Feb. 24. Revenue declined to $74,000, down from $356,000 in the prior-year quarter. Net loss per share increased to 17 cents, up from 13 cents a year ago, due to increased research and development expenses.

We should note that the company is consistently unprofitable, generating only $892,000 in royalty revenue last year. Finally, for the quarter, cash, equivalents, and available-for-sale debt securities ended the year at $183 million,

The biotech started Phase II clinical trials of its oral tablet Covid-19 vaccine. Thus, results from the phase 2 study should be available in a few months. Wall Street warns that negative results could send shares plunging.

VXRT stock is down almost 39% YTD. Yet, the 12-month median price forecast for Vaxart stock is at $11.50. However, Vaxart remains a highly risky bet.

On the date of publication, Tezcan Gecgil did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Tezcan Gecgil has worked in investment management for over two decades in the U.S. and U.K. In addition to formal higher education in the field, she has also completed all 3 levels of the Chartered Market Technician (CMT) examination. Her passion is for options trading based on technical analysis of fundamentally strong companies. She especially enjoys setting up weekly covered calls for income generation.

Article printed from InvestorPlace Media, https://investorplace.com/2022/04/3-stocks-that-have-analysts-running-for-the-exit/.

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