3 Stocks to Avoid as the Meme Craze Makes Its Comeback

: LCID | Lucid Group Inc. News, Ratings, and Charts

LCID – The meme craze is back in action after a lull for a few months. Several stocks have gained traction of late despite their weak fundamentals. With the stock market expected to remain under pressure in the upcoming months, it could be wise to avoid fundamentally weak meme stocks Lucid (LCID), Carvana (CVNA), and Bed Bath & Beyond (BBBY). Let’s discuss….

Meme stocks took the whole world by storm after their logic-defying rally despite fundamental weakness last year. Retail investors grouped on social media forums, such as Reddit’s WallStreetBets, and partook in aggressive bets against large hedge funds, causing a massive short-squeeze in some stocks.

However, as such unprecedented rallies were not backed by fundamentals or positive news, the stocks had a terrible ending, leading to huge losses for several retail investors.

After being paused for a few months, the meme stock frenzy has returned of late, as evident from the outsized rallies of Bed Bath & Beyond Inc. (BBBY) and AMC Entertainment Holdings, Inc. (AMC).

With the Fed reiterating its stance of aggressive interest rate hikes until inflation declines to its desired level of 2%, the stock market will likely remain under pressure in the upcoming months.

Therefore, we think it could be wise to avoid meme stocks Lucid Group, Inc. (LCID), Carvana Co. (CVNA), and BBBY, given their weak fundamentals and poor growth prospects.

Lucid Group, Inc. (LCID)

LCID is a technology and automotive company that develops electric vehicle (EV) technologies. It designs, engineers, and builds electric vehicles, EV powertrains, and battery systems. It has received seven mentions in subreddits over the past 24 hours.

LCID’s loss from operations widened 124.6% year-over-year to $559.20 million for the second quarter ended June 30, 2022. Its total costs and expenses increased 163.6% year-over-year to $656.53 million.

The company’s net loss narrowed 15.8% year-over-year to $220.42 million. Its loss per share narrowed 95.4% year-over-year to $0.33. Also, its adjusted EBITDA loss widened 89.9% year-over-year to $414.08 million.

Analysts expect its loss per share for the quarter ended September 30, 2022, to widen 52.4% year-over-year to $0.32. It failed to surpass the consensus EPS estimate in three of the trailing four quarters. The stock has declined 56.5% year-to-date to close the last trading session at $16.55.

LCID weak prospects are reflected in its POWR Ratings. It has an overall F rating, equating to a 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.

It has an F grade for Value, Stability, and Quality and a D for Sentiment. It is ranked #55 out of 65 stocks in the Auto & Vehicle Manufacturers industry. Click here to see the other ratings of LCID for Growth and Momentum.

Carvana Co. (CVNA)

CVNA is an e-commerce platform for buying used cars. Through the company’s platform, consumers can research and identify a vehicle, inspect it using its 360-degree vehicle imaging technology, obtain financing and warranty coverage, purchase the vehicle, and schedule delivery or pick-up, all from their desktop or cell phone.

The company’s transaction technologies and the online platform allow customers to secure financing, complete a purchase, and schedule delivery or pick-up online. It has received seven mentions in the subreddits over the past 24 hours.

For the fiscal second quarter that ended June 30, 2022, CVNA’s gross profit declined 28.3% year-over-year to $396 million. The company’s net loss came in at $238 million, compared to a net profit of $22 million in the year-ago period. Also, its loss per share came in at $2.35, compared to an EPS of $0.26 in the year-ago period.

For the quarter ending September 30, 2022, CVNA’s loss per share is expected to widen 365.8% year-over-year to $1.77. It failed to surpass Street EPS estimates in each of the trailing four quarters. The stock has declined 81.7% year-to-date and 87.2% over the past year to close the last trading session at $42.28.

CVNA’s POWR Ratings reflect this bleak outlook. The stock has an overall F rating, equating to a Strong Sell in our proprietary rating system.

It has an F grade for Growth, Stability, Sentiment, and Quality. Within the F-rated Internet industry, it is ranked last out of 64 stocks. To see CVNA’s ratings for Value and Momentum, click here.

Bed Bath & Beyond Inc. (BBBY)

BBBY operates a retail store chain. The company sells domestic merchandise, bath items, kitchen textiles, and home furnishings. It sells its offering through various websites and applications. It has received 233 mentions in the subreddits over the past 24 hours.

BBBY’s net sales declined 25.1% year-over-year to $1.46 billion for the first quarter that ended May 28, 2022. The company’s adjusted EBITDA loss came in at $224 million, compared to an adjusted EBITDA of $86 million. Its adjusted net loss came in at $225.23 million, compared to a net income of $4.92 million. In addition, its adjusted loss per share came in at $2.83, compared to an adjusted EPS of $0.05.

Analysts expect its EPS for the current quarter to be negative. Its revenue for fiscal 2023 is expected to decline 21.4% year-over-year to $6.18 billion. It failed to surpass consensus EPS estimates in each of the trailing four quarters. Over the past year, the stock has lost 62.5% to close the last trading session at $9.17.

BBBY’s weak prospects are reflected in its POWR Ratings. The stock has an overall rating of D, equating to a Sell in our proprietary rating system.

It has an F grade for Stability and Sentiment and a D for Growth and Momentum. It is ranked #58 out of 62 stocks in the Home Improvement & Goods industry. Click here to see the other ratings of BBBY for Value and Quality.

Want More Great Investing Ideas?

3 Stocks to DOUBLE This Year


LCID shares rose $0.13 (+0.79%) in premarket trading Tuesday. Year-to-date, LCID has declined -56.50%, versus a -12.83% rise in the benchmark S&P 500 index during the same period.


About the Author: Dipanjan Banchur


Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master’s degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
LCIDGet RatingGet RatingGet Rating
CVNAGet RatingGet RatingGet Rating
BBBYGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


Does Trump Change Stock Market Outlook?

The rally of the S&P 500 (SPY) after the election gives a sense that investors are happy that Trump was elected. But perhaps there is more to this story than meets the eye. That’s why Steve Reitmeister shares his updated market outlook taking into account the pros and cons of Trumps proposed new policies. This comes with a preview of his top 11 stocks to buy now.

3 Streaming Stocks Benefiting from Cord-Cutting Trends

As streaming continues to dominate the digital entertainment landscape, the global streaming market presents a lucrative investment opportunity. So, it could be ideal to invest in fundamentally solid streaming stocks Netflix (NFLX), Walt Disney (DIS), and Roku (ROKU). Read further...

3 Gold Stocks to Buy as Safe-Haven Demand Grows

Gold is a stable investment now due to its role as a safe-haven asset during economic uncertainty, rising demand, industrial use, and growth, bolstered by central bank purchases and interest rate cuts. Therefore, investors should consider investing in top gold stocks such as Newmont (NEM), Barrick Gold (GOLD), and Agnico Eagle Mines (AEM). Read more...

3 AI Stocks Transforming Industries and Driving Future Growth

With rapid digitalization, rapid adoption, and development, as well as surging demand, the AI market is on the rise. Amid this backdrop, investors could buy fundamentally solid AI stocks NVIDIA Corporation (NVDA), Microsoft (MSFT), and Meta Platforms (META) poised for substantial gains. Continue reading...

Updated Stock Market Expectations

The S&P 500 (SPY) has already reached an impressive goal of hitting 6,000. Yet you can see how much shares are struggling now up against this resistance. Steve Reitmeister shares his views on what comes next for the market and his top 10 stocks to stay on the right side of the action.

Read More Stories

More Lucid Group Inc. (LCID) News View All

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