These 8 Growth Stocks Have Hit All-Time Lows. Is It Time to Buy?
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Between a fatal bank run at Silicon Valley Bank and high interest rates that no longer favor tech companies, many former industry leaders have seen their stocks fall hard. Analysts expected 2023 would be a tough year for growth stocks. But for these eight big-name companies, it’s been their worst year yet so far.
Lowest closing price: $13.01 on March 17, 2023.
Highest closing price: $172.01 on Nov. 16, 2021.
Why it has dropped: The EV truck producer reported a net loss of $1.7 billion for Q4 2022 and burned through $6.4 billion in the same year. It has also issued numerous recalls for steering wheel and airbag defects. More recently, it announced it needed to raise $1.3 billion in capital. This came after announcing its funds would last until 2025.
Is it a good deal? Rivian could have long-term potential. But right now the company is losing too much money on every EV truck it produces. Until it can earn profit on its vehicles, investors will remain bearish.
2. Warby Parker
Lowest closing price: $9.69 on March 17, 2023.
Highest closing price: $59.50 on Nov. 17, 2021.
Why it has dropped: The eyewear retailer reported net losses of $20.3 million in its latest Q4 report.
Is it a good deal? Warby Parker narrowed its Q4 losses and opened 40 new stores last year. It also grew net revenues by 10.6% in 2022. That said, the company’s operating costs are still higher than its profits. Its share price will likely remain low until it can start making more money than it's spending.
Lowest closing price: $1.09 on March 20, 2023.
Highest closing price: $62.00 on Dec. 22, 2020.
Why it has dropped: Management at the sports-streaming service sold 36.7 million shares of its own stock at a deep loss. This signaled to investors it was desperate for cash. Many inventors were also bearish after management warned subscriber rates would drop significantly in 2023 following a brief boost from the World Cup.
Is it a good deal? FuboTV has a long road ahead. Its revenue for Q4 ($319.3 million) wasn’t enough to cover its operating expenses ($413.2 million). More importantly, its subscription revenues for 2022 ($905.8 million) were lower than subscriber-related expenses ($976.4 million). The company needs to address these losses before investors view this price as a good deal.
4. Black Rifle Coffee Company
Lowest closing price: $5.08 on March 20, 2023.
Highest closing price: $33.11 on April 11, 2022.
Why it has dropped: Management gave weak guidance for 2023. Previously, analysts had expected the company to generate $500 million in revenue for the full year. On March 16, it readjusted and now expects net revenue between $400 million and $440 million.
Is it a good deal? Investors may find Black Rifle to be a good deal at this price. The veteran-owned coffee producer has attracted its own audience of coffee lovers and veterans. It also has a lucrative partnership with Walmart. The only concern is demand — if revenues continue to fall, it could mean fewer consumers are buying its bagged coffee.
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Lowest closing price: $8.46 on March 13, 2023.
Highest closing price: $78.29 on March 29, 2019.
Why it has dropped: Lyft fell roughly 35% on Feb. 10 after it announced it would earn $975 million in revenue in Q1 2023. This was below the $1.09 billion Wall Street expected.
Is it a good deal? For long-term investors, Lyft might have some attractive upside potential. The company’s Q4 2022 revenues beat expectations ($1.18 billion reported vs. $1.16 billion forecasted) and it also posted a higher earnings per share ($0.29 vs. $0.13). In the short-term, however, the stock will likely be volatile, as the company is struggling to attract passengers and drivers post-pandemic.
6. Lumen Technologies
Lowest closing price: $2.48 on March 17, 2023.
Highest closing price: $41.81 on Nov. 3, 2014.
Why it has dropped: The company lost its spot on the S&P 500 in early March after its stock fell roughly 70% year-to-year.
Is it a good deal? The company reported a $3.06 billion loss for Q4 2022, which included acquisitions that resulted in a $3.27 billion loss. It has also divested $7.5 billion in assets and had roughly $650 million less in free cash flow year-over-year. These are all signs Lumen Technologies might be facing an uncertain future.
Lowest closing price: $0.40 on March 13, 2023.
Highest closing price: $20.08 on Aug. 9, 2022.
Why it has dropped: The drop began last year when the esports company’s private shareholders expressed interest in selling roughly 10.159 million shares. This spooked public shareholders, who also began to sell off. The stock fell further in 2023 when FaZe laid off 20% of its staff.
Is it a good deal? The esports company hasn’t shown it can scale up its business. In its last earnings report, it reported revenue of $14 million but operating expenses of $18.4 million. Investors may want to wait until FaZe releases its next earnings report (March 30) before making a long-term decision.
Lowest closing price: $1.17 on March 16, 2023.
Highest closing price: $29.11 on Jan. 19, 2021.
Why it has dropped: The EV bus maker reported less revenue than analysts were expecting ($81.41 million vs. $86.86 million). The rising costs of materials — like battery metals — has also made it difficult for Proterra to produce EV buses at a low-enough cost to turn a profit.
Is it a good deal? Like Rivian, investors may view Proterra as a long-term investment. It could take several years before an automaker — let alone one that produces EV buses — can become profitable.
» Looking for outperformers? View the best-performing stocks this year
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