Several companies have dropped their stock prices recently. Goldman Sachs downgraded Netflix stock, IBM reported better-than-expected quarter-end results, and Etsy Inc. hit new lows. This article will look at some of the more notable stock-price drops of recent weeks. You may want to check out one of these companies to see what they have in store for the future. But if you want to take advantage of the current market downturn, keep reading.
Goldman Sachs downgraded Netflix stock
On Friday, Goldman Sachs downgraded Netflix stock from ‘neutral’ to’sell’ and lowered its price target to $186 from $265. Analysts cited concerns with the impact of consumer recession, heightened competition and a slowdown in international growth for the company. The firm has also revised its outlook to include a lower price target for the company’s free tier, which it says is the lowest among the analysts who cover the stock.
The stock price was already beaten down this year, with the Nasdaq down more than 26% since the beginning of 2016. But Goldman Sachs sees more pain ahead for some of the tech heavyweights. The company faces increased competition, rate hikes and a cash-strapped consumer base. As a result, Netflix could be hit harder than ever before. But it doesn’t have to suffer this way.
IBM reported better-than-expected quarterly results
After reporting better-than-expected first-quarter results, IBM shares surged 7% in mid-day trading Wednesday. IBM’s revenue topped analyst expectations and the company issued a positive forecast for the rest of the year. Revenue rose by 7% year over year. Revenue from its cloud business increased 12-14%. Analysts also raised their price targets for the stock to $150 from $140.
Meanwhile, in Europe, major companies including Cisco and IBM reported better-than-expected quarterly results. The tech stocks were led higher after the data giant beat quarterly earnings expectations. Earlier on Friday, the market rose after the earnings report of big technology companies. Big companies like Cisco and IBM jumped more than 3% after reporting their results. However, Netflix shares fell 36.4%, as its first-quarter subscriber loss in more than a decade has weighed on its revenue. While the tech giant is facing some headwinds from declining subscribers, other stocks have been doing well.
As prices rise, Netflix’s stock price has also slipped. Analysts expect Netflix to report higher profits in the coming months. However, Netflix has been hit by rising competition from rivals. Warner Bros Discovery, Paramount Global, and Disney all closed higher in today’s session. Netflix acknowledged the crowded streaming market in its letter to investors. The company is now down nearly 68% from its November high.
Etsy Inc. reported better-than-expected quarterly results
The makers of the online marketplace Etsy Inc. have reported better-than-expected quarterly results. The company’s sales growth continued to exceed expectations, with gross merchandise value increasing 16.1% to $3.1 billion. However, the company is facing a slowdown in buyers. To combat this, Etsy has implemented a new “Star Seller” program. Those who become star sellers are rewarded with a special shop badge, resulting in higher buyer confidence. A star seller’s rate of repeat purchase is 25% higher than a non-star seller’s, while shops that reach $10k USD automatically become eligible to place ads on other websites. Etsy advertising helps broaden sellers’ reach, and is a key revenue driver.
While the results exceeded analyst expectations, Etsy has a rough patch ahead. The company missed on its guidance but still managed to beat estimates. The company reported an earnings per share of $1.11, which was up from last quarter’s $0.79 per share. However, Etsy said that Q2 sales will be down 6% from Q1 levels. On top of that, Etsy also reported that its sales will fall in Q2, despite its strong growth.
Etsy Inc. hit new lows
Despite a dreadful week, Etsy Inc. shares fell 15% Friday in early trading, as the company issued disappointing guidance for the second quarter. The company’s revenue guidance fell short of Wall Street expectations, missing $627 million and $3.37 billion, respectively. Despite the disappointing results, Stifel analysts maintained a positive outlook for Etsy, noting that the company has made investments that will support its growth over the long-term.
Despite the recent plunge, Etsy stock is still a Buy. It could see a quick recovery in the near term. Etsy has the potential to beat market expectations as it expands into new product categories and expands its international market presence. A recent reiteration of the company’s fourth-quarter earnings provided a nice boost to the shares. The company surpassed its fourth-quarter revenue estimate by 41% and reported earnings per share of $1.11.