The Fed’s aggressive interest rate hikes to control the stubborn inflation have dampened investor sentiment. With investors trying to protect their capital by selling shares, the S&P 500 has lost more than 20% year-to-date, while the tech-heavy Nasdaq has fallen more than 30% over this period.
Additionally, September’s hotter-than-expected inflation and employment data have strengthened the case for the Fed to announce another aggressive interest rate hike in its November meeting. The central bank’s strong determination to keep hiking interest rates until inflation is under control has raised fears of a recession.
According to the latest Bloomberg Economics model projections, the likelihood of the United States entering a recession in the next 12 months is 100%. Amid this grim economic outlook, fundamentally weak stocks Marvell Technology, Inc. (MRVL), Faraday Future Intelligent Electric Inc. (FFIE), and Oblong, Inc. (OBLG) could be best avoided now.
Marvell Technology, Inc. (MRVL)
MRVL is engaged in designing, developing, and selling integrated circuits and other infrastructure semiconductor solutions. The company’s offerings cater to five markets — data center, carrier infrastructure, enterprise networking, consumer, and automotive/industrial.
MRVL’s operating expenses increased 17% year-over-year to $746.90 million for the fiscal second quarter ended July 30, 2022. The company’s total liabilities stood at $6.63 billion, compared to $6.41 billion for the fiscal year ended January 29, 2022. Its current liabilities increased 55.2% to $2.15 billion, compared to $1.38 billion for the fiscal year ended January 29, 2022.
MRVL’s forward P/Sales of 5.48x is 122.2% higher than the industry average of 2.47x. In terms of forward EV/Sales, the stock is trading at 6.16x, 141.1% higher than the industry average of 2.55x.
The stock has lost 54.8% year-to-date and 41.1% over the past year to close the last trading session at $39.54.
MRVL’s POWR Ratings reflect weak prospects. The stock has an overall D rating, which equates to a 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 also has a D grade for Value, Stability, and Quality. In the Semiconductor & Wireless Chip industry, MRVL is ranked #83 of 93 stocks.
To see the other ratings of MRVL for Growth, Momentum, and Sentiment, click here.
Faraday Future Intelligent Electric Inc. (FFIE)
FFIE designs, develops, manufactures, sells, and distributes electric vehicles and related products in the United States and internationally.
For the second quarter ended June 30, 2022, FFIE’s operating loss widened 389.3% year-over-year to $137 million, while its net loss came in at $142 million. The company’s total assets stood at $588 million as of June 30, 2022, compared to $706.06 million as of March 31, 2022.
Analysts expect FFIE’s loss per share for the quarter ending December 2022 to widen 288.9% year-over-year to $0.35. Also, the company’s loss per share for fiscal 2022 is expected to come in at $1.63.
In terms of its forward EV/Sales, FFIE is currently trading at 5.7x, 441.1% higher than the industry average of 1.05x. Its forward Price/Sales multiple of 5.83 is 630.5% higher than the industry average of 0.80.
The stock has slumped 94.1% over the past year and 90.1% year-to-date to close the last trading session at $0.53.
FFIE’s poor fundamentals are reflected in its POWR Ratings. The stock’s overall rating of F equates to a Strong Sell in our proprietary rating system.
FFIE also has an F grade for Value, Stability, and Quality and a D for Sentiment. Within the D-rated 64-stock Auto & Vehicle Manufacturers industry, it is ranked #60.
Click here to access FFIE’s additional POWR Ratings for Growth and Momentum.
Oblong, Inc. (OBLG)
OBLG provides multi-stream collaboration technologies and managed services for video collaboration and network applications in the United States and internationally. The company operates in two segments Collaboration Products and Managed Services.
Its flagship product- Mezzanine, enables visual collaboration across multi-users, multi-screens, and multi-locations for video telepresence, laptop and application sharing, and whiteboard sharing and slides applications.
On August 17, OBLG received written notification from the Listing Qualifications Department of The Nasdaq Stock Market, LLC, granting a 180-day extension to regain compliance with Nasdaq’s minimum bid price requirement under Nasdaq Listing Rule 5550(a)(2). The company has until February 13, 2023, to meet the requirement, failing which might lead to the delisting of the company shares.
For the fiscal second quarter ended June 30, OBLG’s revenue decreased 34.9% year-over-year to $1.33 million. Its gross profit declined 49.1% year-over-year to $407 thousand, while the net loss stood at $9.03 million, up 302.2% from the same period the prior year.
OBLG’s trailing-12-month EV/Sales multiple of 0.52 is 80.4% lower than the industry average of 2.64. In terms of its trailing-12-month Price/Book, the stock is trading at 0.68x, 74.8% lower than the industry average of 2.69x.
The stock has declined 86.7% over the past year and 74.5% year-to-date to close the last trading session at $0.26.
OBLG has an overall D rating, which translates to Sell in our POWR Ratings system. The stock also has a D grade for Quality and Value. It is ranked #125 of 149 stocks in the D-rated Software – Application industry.
In addition to the POWR Rating grades we’ve stated above, one can see OBLG ratings for Growth, Momentum, Sentiment, and Stability here.
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MRVL shares rose $0.45 (+1.14%) in premarket trading Monday. Year-to-date, MRVL has declined -55.45%, versus a -21.14% rise in the benchmark S&P 500 index during the same period.
About the Author: Komal Bhattar
Komal's passion for the stock market and financial analysis led her to pursue investment research as a career. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities. More...
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