3 Downgraded Stocks Investors Will Want to Sell Short

: HOOD | Robinhood Markets, Inc. News, Ratings, and Charts

HOOD – The stock market has been experiencing massive volatility due to rising concerns over surging inflation and the Fed’s constant efforts to fight it by raising the interest rates aggressively. Amid the ongoing market turbulence, investors might want to short-sell fundamentally weak stocks Robinhood Markets, Inc. (HOOD), Frontier Group (ULCC), and Warby Parker Inc. (WRBY), which have been recently downgraded by our proprietary rating system. Read on….

Rising inflation and the possibility of further interest rate hikes have weighed on investors’ sentiment so far. According to statements from two policymakers, the Federal Reserve is about to announce another sharp interest rate hike this month and maybe one in September as well, even if it results in an economic slowdown.

“I’m definitely in support of doing another 75 basis point hike in July, probably 50 in September, and then after that we can debate whether to go back down to 25s,” Fed Governor Christopher Waller told the National Association for Business Economics.

The S&P 500, Nasdaq Composite, and Dow Jones Industrial Average have all witnessed their worst first half to a year in several decades. According to former IMF Chief Economist Ken Rogoff, it is “almost impossible” for the Fed to bring down inflation without tipping the US economy into a recession.

Since the macroeconomic headwinds are not expected to ease anytime, Robinhood Markets, Inc. (HOOD), Frontier Group Holdings, Inc. (ULCC), and Warby Parker Inc. (WRBY) could be good short-sell candidates given their weak fundamentals. These stocks have also been recently downgraded to Strong Sell in our proprietary rating system.

Robinhood Markets, Inc. (HOOD)

Headquartered in Menlo Park, California, HOOD operates as a financial services platform in the United States. Its platform allows users to invest in stocks, exchange-traded funds (ETFs), options, gold, and cryptocurrencies. The company also offers various learning and education solutions comprising Snacks; Learn; Newsfeeds; lists and alerts; and offers First trade recommendations.

HOOD’s loss before income taxes amounted to $1.43 billion for the first quarter ending March 31, 2022, while its net loss came in at $1.45 billion. The company’s loss per share stood at $6.26 over the period.

Analysts expect HOOD’s consensus EPS to remain negative in the second quarter ending June 2022. The stock has declined 49.3% year-to-date and 78.5% over the past nine months.

HOOD’s POWR Ratings are consistent with this bleak outlook. The stock has an overall rating of F, which translates to Strong Sell in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

HOOD is rated an F for Stability and Sentiment and a D for Value. Within the F-rated Software – Application industry, it is ranked #140 of 156 stocks.

To see additional POWR Ratings for Quality, Growth, and Momentum for HOOD, Click here.

Frontier Group Holdings, Inc. (ULCC)

Headquartered in Denver, Colorado, ULCC is a low-fare airline company that provides passenger air transportation. The company operates an airline that serves approximately 120 airports throughout the United States and international destinations in the Americas.

For the first quarter ended March 31, 2022, ULCC’s operating loss increased 66% year-over-year to $153.00 million. Its net loss grew 33% from its year-ago value to $121.00 million, while its loss per share increased 21.7% year-over-year to $0.56.

The stock has slumped 6.9% over the past three months. Analysts expect ULCC’s EPS to remain negative in fiscal 2022.

ULCC’s poor prospects are also apparent in its POWR Ratings. The stock has an overall F rating, which equates to a Strong Sell. It has a D grade for Sentiment, Stability, and Value. ULCC is ranked #29 of 31 stocks in the F-rated Airlines industry.

Click here to see the additional POWR Ratings for ULCC (Quality, Growth, and Momentum).

Warby Parker Inc. (WRBY)

WRBY provides eyewear products. It offers eyeglasses, sunglasses, light-responsive lenses, blue-light-filtering lenses, and contact lenses, as well as accessories, including cases, lenses kit with anti-fog spray, pouches, and anti-fog lens spray. The company also directly provides eye exams and vision tests to consumers through its retail stores, website, and mobile apps.

WRBY’s loss from operations stood at $33.74 million compared to a profit of $3.02 million in the previous period. Its net loss stood at $34.13 million compared to a net profit of $3.01 million in the prior-year quarter. The company’s loss per share increased 900% from its year-ago value to $0.30. The stock has plunged 4.5% over the past month.

WRBY’s poor prospects are also apparent in its POWR Ratings. The stock has an overall F rating, which equates to a Strong Sell in our proprietary rating system. It has an F grade for Sentiment and a D grade for Stability and Value. WRBY is ranked #142 of 149 stocks in the D-rated Medical – Devices & Equipment industry.

Click here to see the additional POWR Ratings for WRBY (Quality, Growth, and Momentum).

HOOD shares fell $0.17 (-1.89%) in premarket trading Monday. Year-to-date, HOOD has declined -49.32%, versus a -17.56% rise in the benchmark S&P 500 index during the same period.

About the Author: Spandan Khandelwal

Spandan's is a financial journalist and investment analyst focused on the stock market. With her ability to interpret financial data, she aims to help investors evaluate the fundamentals of a company before investing. More...

More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
HOODGet RatingGet RatingGet Rating
ULCCGet RatingGet RatingGet Rating
WRBYGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com

Investor Alert: Healthy Pause for Stock Market

This recent pullback very much looks like a “healthy pause” for the stock market as the S&P 500 (SPY) comes off recent highs. What is the cause of the pause? How long will it last? What happens afterwards? And how to make money in this market? Steve Reitmeister will answer all these questions and more in his latest market commentary below...

3 Gold Stocks to Buy Poised for Success

With expected interest rate cuts, surging gold jewelry demand, and ongoing geopolitical conflicts, gold prices have hit record highs this year. Thus, it could be wise to buy fundamentally sound gold stocks Centerra Gold (CGAU), Gold Fields (GFI), and Kinross Gold (KGC), which are well-poised for success. Keep reading…

3 Internet Stocks Poised up for Rapid Growth in April

The internet industry thrives thanks to expanding usage, its transformative impact on work and communication globally, advancements in 5G, and its widespread integration into daily life. Hence, it could be wise to consider adding internet stocks ATRenew (RERE), Chegg (CHGG), and 1-800-FLOWERS.COM (FLWS) to one’s portfolio for growth. Read on...

TXN vs. INTC Earnings Alert - Which Chip Stock Will Surge Ahead?

Growing applications of chips across diverse end-use sectors and emerging digital technologies will shape the growth trajectory of the semiconductor industry and create several opportunities for industry players. So, let’s analyze Texas Instruments (TXN) and Intel (INTC) to determine which of these chip stocks will surge following their first-quarter earnings. Read more...

Updated 2024 Stock Market Outlook

The bull market continues to rage on with the S&P 500 (SPY) making new highs. That is the past...the question is what does the future hold? That is why 44 year investment veteran Steve Reitmeister provides this updated 2024 Stock Market Outlook to help you carve a path to outperformance the rest of the year. Read on below for the full story...

Read More Stories

More Robinhood Markets, Inc. (HOOD) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All HOOD News