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Tag: CVNA

  • Contrasting Inchcape (OTCMKTS:INCPY) and Carvana (NYSE:CVNA)

    Contrasting Inchcape (OTCMKTS:INCPY) and Carvana (NYSE:CVNA)

    Carvana (NYSE:CVNA – Get Free Report) and Inchcape (OTCMKTS:INCPY – Get Free Report) are both retail/wholesale companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, risk, earnings, institutional ownership, analyst recommendations, profitability and dividends.

    Analyst Ratings

    This is a summary of current recommendations and price targets for Carvana and Inchcape, as provided by MarketBeat.com.

    Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
    Carvana 5 15 1 0 1.81
    Inchcape 0 0 1 0 3.00

    Carvana currently has a consensus target price of $39.16, suggesting a potential downside of 3.07%. Given Carvana’s higher probable upside, equities analysts plainly believe Carvana is more favorable than Inchcape.

    Earnings and Valuation

    This table compares Carvana and Inchcape’s revenue, earnings per share and valuation.

    Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
    Carvana $13.60 billion 0.56 -$1.59 billion ($12.34) -3.27
    Inchcape N/A N/A N/A N/A N/A

    Inchcape has lower revenue, but higher earnings than Carvana.

    Institutional and Insider Ownership

    51.1% of Carvana shares are owned by institutional investors. 17.1% of Carvana shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

    Profitability

    This table compares Carvana and Inchcape’s net margins, return on equity and return on assets.

    Net Margins Return on Equity Return on Assets
    Carvana -11.08% -1,491.81% -6.94%
    Inchcape N/A N/A N/A

    About Carvana

    (Get Free Report)

    Carvana Co., together with its subsidiaries, operates an e-commerce platform for buying and selling used cars in the United States. Its platform allows customers to research and identify a vehicle; inspect it using company’s 360-degree vehicle imaging technology; obtain financing and warranty coverage; purchase the vehicle; and schedule delivery or pick-up from their desktop or mobile devices. The company was founded in 2012 and is based in Tempe, Arizona.

    About Inchcape

    (Get Free Report)

    Inchcape plc operates as an automotive distributor and retailer. The company engages in the distribution, sales, and marketing of new and used cars, and parts. It also provides aftersales service and body shop repairs; and finance and insurance products and services. The company operates in the Asia Pacific, the United Kingdom, rest of Europe, the Americas, and Africa. Inchcape plc was founded in 1847 and is headquartered in London, the United Kingdom.

    Receive News & Ratings for Carvana Daily – Enter your email address below to receive a concise daily summary of the latest news and analysts’ ratings for Carvana and related companies with MarketBeat.com’s FREE daily email newsletter.

    ABMN Staff

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  • These stock watchers nailed the market’s melt-up, but now they’re bracing for a fall. Here’s what to watch.

    These stock watchers nailed the market’s melt-up, but now they’re bracing for a fall. Here’s what to watch.

    Similar to the buzzy intrigue behind the mashup viewing of the tonally different Barbie and the Oppenheimer movies, the market is rallying to its own oddball double feature: higher interest rates and economic uncertainty.

    What could go wrong? That is what some stock-market specialists are wondering.

    On Friday, the Dow Jones Industrial Average
    DJIA,
    -0.13%
    notched a 10th consecutive positive close, marking the longest win streak for the blue-chip benchmark since Aug. 7, 2017, according to the team at Dow Jones Market Data.

    To say that it has been a remarkable run-up is, perhaps, an understatement for some assets. Carvana
    CVNA,
    -2.38%    ,
    a left-for-dead used-car retailer, whose stock had surged by 1,100% at its peak so far this year, before retreating somewhat, is a perfect example of the fervor surrounding risky assets.

    It feels as if buyers are crazed, even as the Federal Reserve is set next week to raise interest rates a quarter of a percentage point, marking the 11th time (since March of 2022) that the central bank has increased benchmark interest rates after pausing in June to assess the inflation backdrop.

    Read: U.S. inflation slows again, CPI shows

    The Wall Street Journal this week described the investing environment as hitting a “fever pitch” with “risk-on” assets the most popular they have been since late 2021—right before stocks entered the longest bear market in decades.”

    The surprising velocity at which the bearish miasma from earlier this year has dissipated is also noteworthy, considering the concerns around stubbornly high inflation and incessant fear of a Fed-induced recession.

    At Friday’s close of trade, the Dow was off a mere 4.3% from its January record high reached in 2022, the S&P 500 is about 5.4% shy of its Jan. 2, 2022 closing high. Soberingly, the tech-weighted Nasdaq Composite Index
    COMP,
    -0.22%
    remains off nearly 13%.

    Now, however, may be time to take profits, some pros seem to caution.

    Stifel’s chief equity strategist Barry Bannister told MarketWatch via email that the lagged effects of the Fed’s barrage of tightening, combined with stingy lending — among other factors — would likely be triggers for a market pullback, if not an economic retrenchment.

     “In total, those leading indicators will keep economic growth soft,” Bannister said, also referencing flagging manufacturing.

    In large part, that is why he’s calling for sideways action or a possible retreat of about 3% for the S&P 500
    SPX,
    +0.03%
    to 4,400.

    Bannister’s recent call is worth heeding because he nailed the first part of a two-pronged prediction for 2023, when he referred to it as a year of two halves.

    Back in January, he wrote:

    2023 may be a year of 2 halves, with the S&P 500 peaking mid-2023. The S&P 500 in late 2023 may give back some or all of 2023 gains.

    The Stifel analyst sees a heightened recession risk for 2024.

    Meanwhile, Michael Gayed, who also runs the Lead-Lag Report and is a portfolio manager at Tidal Financial Group, warned of the perils of investors’ rabid buying, in a recent report. Similar to Bannister, he also predicted a strong first half of 2023 followed by a retreat in latter part of the year.

    Jacques Cesar, a former managing partner at Oliver Wyman who now works on market valuation for the firm, shared a similar sentiment to those two…but with some nuances, in an interview with MarketWatch.

    “Right now, we are in a melt-up,” he said. “And Rule No. 1 about a melt-up, don’t short a melt-up,” he said, referring to making bearish bets that the market will fall soon.

    “Is the market too high? Yes,” Cesar said. “But is there a signal to short? Absolutely not,” he said.

    The market valuation pro, says investors find themselves in a Russian nesting doll of market conditions: “We are in a sub-cyclical bull in a cyclical bear in a suprasecular bull.”

    His assumption is that the current melt-up in markets will reverse but cautions that predicting the precise timing is impossible.

    Useful signs to look for will be decelerating market pricing and then reversing coupled with trading volume picking up as stocks slide.

    Cesar also predicts a pullback in 2024, if not a recession, and said that downturn will be followed by a return to a suprasecular, long-term bull run in 2025.

    Although, there won’t be an apparent trigger for the market and economic slump, Cesar says eroding consumer savings. built up during the pandemic, will be depleted by the end of 2023.

    As for inflation, Cesar says it has been dropping like a stone and pointed to the New York Fed’s Underlying Inflation Gauge as an early (but perhaps unheeded) signal that pricing pressures have been steadily receding.

    So much so that disinflation, a slowdown in the rate of inflation, may be a corporate concern in coming quarters.

    He said companies, which enjoyed healthy pricing power during the inflationary period, will be hurt in the short-term by disinflation in the short term.

    “As you go into disinflation, the margins get squeezed,” he said.

    Bannister says oversold parts of the market like banks
    KRE,
    -1.26%

    KBE,
    -1.20%    ,
    industrials
    XLI,
    -0.47%
    and basic materials
    XLB,
    +0.01%    ,
    might be better opportunities for investors in the third quarter than growth-oriented tech plays like Tesla
    TSLA,
    -1.10%    ,
    for example.

    In the end, bulls (and bears), similar to moviegoers are wading back into a market that had been written off at the start of the year. The major cinematic question? Will they will be partying with Barbie or getting blown up with Oppenheimer?

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  • Dow posts longest winning streak in nearly 6 years; Nasdaq slumps over 2%

    Dow posts longest winning streak in nearly 6 years; Nasdaq slumps over 2%

    U.S. stocks finished mostly lower Thursday, with the Nasdaq and S&P 500 dragged down by disappointing earnings, while the Dow Jones Industrial Average rose for a ninth straight day for its longest winning streak in nearly six years.

    How stocks traded

    • The S&P 500
      SPX,
      -0.68%
      fell 30.85 points, or 0.7%, to close at 4,534.87.

    • The Dow
      DJIA,
      +0.47%
      rose 163.97 points, or 0.5%, to finish at 35,225.18. The winning streak is its longest since a nine-day run that ended on Sept. 20, 2017, according to Dow Jones Market Data.

    • The Nasdaq Composite
      COMP,
      -2.05%
      ended at 14,063.31, down 294.71 points, or 2.1%.

    What drove markets

    After lagging behind the S&P 500 and Nasdaq for most of the year, the Dow Jones Industrial Average has climbed over the past two weeks. The blue-chip gauge is now heading for its longest streak of daily gains since Sept. 20, 2017, according to Dow Jones Market Data.

    It’s the latest milestone as value stocks and other lagging sectors of the market appear to be playing “catch up,” said Paul Nolte, senior wealth adviser and market strategist at Murphy & Sylvest Wealth Management, during a phone interview with MarketWatch. Although the Dow’s year-to-date gains are still well behind those of the S&P 500, with the blue-chip gauge up 6.6% since Jan. 1, FactSet data show.

    On Wednesday, the S&P 500 and Nasdaq closed at their highest levels in nearly 16 months.

    “We’re finally seeing the rotation to value,” he said. “The Dow is playing catch up with the S&P 500 and the Nasdaq.”

    See: Stock-market bubble trouble? Check out the 3-year view on Nasdaq, S&P 500 returns.

    Technology stocks were lagging following earnings from Netflix Inc.
    NFLX,
    -8.41%
    released late Wednesday, which showed that revenue fell short. Shares fell 8.4%.

    Tesla Inc.
    TSLA,
    -9.74%
    shares fell 9.7% after the electric vehicle maker beat Wall Street expectations for its second quarter but not in the blowout fashion that some market observers were expecting.

    “Netflix missed sales estimates and issued lower-than-expected Q3 guidance, while Tesla’s results showed shrinking profitability with squeeze on margins,” said Henry Allen, strategist at Deutsche Bank.

    Semiconductor shares also took it on the chin, with the PHLX Semiconductor Index
    SOX,
    -3.62%
    falling 3.6%. The drop came after Taiwan Semiconductor Manufacturing Co. 
    TSM,
    -5.05%
    topped second-quarter earnings expectations but reported margins that contracted, while providing a somewhat downbeat outlook.

    Meanwhile, shares of IBM Corp.
    IBM,
    +2.14%
    and Johnson & Johnson
    JNJ,
    +6.07%
    drove the Dow higher after both companies beat earnings expectations.

    Bad news for Netflix seemed to infect other megacap technology names, as Alphabet Inc. Class A
    GOOGL,
    -2.32%
    and Alphabet Inc.
    GOOG,
    -2.65%
    retreated, as did shares of Apple Inc.
    AAPL,
    -1.01%
    and Microsoft Corp.
    MSFT,
    -2.31%
    after the latter hit a record this week.

    Investors also digested earnings from American Airlines Group Inc.
    AAL,
    -6.24%
    and Blackstone Inc.
    BX,
    -0.61%
    which reported before the opening bell. After the close, investors will hear from Capital One Financial Corp.
    COF,
    -2.52%    ,
    CSX Corp.
    CSX,
    -0.27%
    and First Financial Bancorp
    FFBC,
    -0.54%    ,
    along with a few others.

    In U.S. economic data, weekly jobless benefit claims data showed the number of Americans applying for first-time unemployment benefits fell to a two-month low. Meanwhile, the Philadelphia Fed’s gauge of manufacturing activity came in at negative 13.5 in July, up from 13.7 during the prior month.

    Existing home sales fell in June, while leading index of economic indicators dropped 0.7% in June, falling for the 15th month in a row.

    Companies in focus

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  • Used Car Prices Drop By a Record. Carvana Stock Is Up, a Lot.

    Used Car Prices Drop By a Record. Carvana Stock Is Up, a Lot.

    Used Car Prices Drop By a Record. Carvana Stock Is Up, a Lot.

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  • CVNA Stock Price | Carvana Co. Cl A Stock Quote (U.S.: NYSE) | MarketWatch

    CVNA Stock Price | Carvana Co. Cl A Stock Quote (U.S.: NYSE) | MarketWatch

    Carvana Co. Cl A

    Carvana Co. is a holding company and an eCommerce platform, which engages in the buying and selling of used cars. The company was founded by Ernest Garcia, III, Benjamin Huston and Ryan Keeton in 2012 and is headquartered in Tempe, AZ.

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  • Why naked short selling has suddenly become a hot topic

    Why naked short selling has suddenly become a hot topic

    Short selling can be controversial, especially among management teams of companies whose stocks traders are betting that their prices will fall. And a new spike in alleged “naked short selling” among microcap stocks is making several management teams angry enough to threaten legal action:

    Taking a long position means buying a stock and holding it, hoping the price will go up.

    Shorting, or short selling, is when an investor borrows shares and immediately sells them, hoping he or she can buy them again later at a lower price, return them to the lender and pocket the difference.

    Covering is when an investor with a short position buys the stock again to close a short position and return the shares to the lender.

    If you take a long position, you might lose all your money. A stock can go to zero if a company goes bankrupt. But a short position is riskier. If the share price rises steadily after an investor has placed a short trade, the investor is sitting on an unrealized capital loss. This is why short selling traditionally has been dominated by professional investors who base this type of trade on heavy research and conviction.

    Read: Short sellers are not evil, but they are misunderstood

    Brokers require short sellers to qualify for margin accounts. A broker faces credit exposure to an investor if a stock that has been shorted begins to rise instead of going down. Depending on how high the price rises, the broker will demand more collateral from the investor. The investor may eventually have to cover and close the short with a loss, if the stock rises too much.

    And that type of activity can lead to a short squeeze if many short sellers are surprised at the same time. A short squeeze can send a share price through the roof temporarily.

    Short squeezes helped feed the meme-stock craze of 2021 that sent shares of GameStop Corp.
    GME,
    +10.45%
    and AMC Entertainment Holdings Inc.
    AMC,
    +2.54%
    soaring early in 2021. Some traders communicating through the Reddit WallStreetBets channel and in other social media worked together to try to force short squeezes in stocks of troubled companies that had been heavily shorted. The action sent shares of GameStop soaring from $4.82 at the end of 2020 to a closing high of $86.88 on Jan. 27, 2021, only for the stock to fall to $10.15 on Feb. 19, 2021, as the seesaw action continued for this and other meme stocks.

    Naked shorting

    Let’s say you were convinced that a company was headed toward financial difficulties or even bankruptcy, but its shares were still trading at a value you considered to be significant. If the shares were highly liquid, you would be able to borrow them through your broker for little or almost no cost, to set up your short trade.

    But if many other investors were shorting the stock, there would be fewer shares available for borrowing. Then your broker would charge a higher fee based on supply and demand.

    For example, according to data provided by FactSet on Jan. 23, 22.7% of GameStop’s shares available for trading were sold short — a figure that could be up to two weeks out-of-date, according to the financial data provider.

    According to Brad Lamensdorf, who co-manages the AdvisorShares Ranger Equity Bear ETF
    HDGE,
    -2.65%    ,
    the cost of borrowing shares of GameStop on Jan. 23 was an annualized 15.5%. That cost increases a short seller’s risk.

    What if you wanted to short a stock that had even heavier short interest than GameStop? Lamensdorf said on Jan. 23 that there were no shares available to borrow for Carvana Co.
    CVNA,
    +10.63%    ,
    Bed Bath & Beyond Inc.
    BBBY,
    -12.24%    ,
    Beyond Meat Inc.
    BYND,
    +11.31%
    or Coinbase Global Inc.
    COIN,
    +1.45%    .
    If you wanted to short AMC shares, you would pay an annual fee of 85.17% to borrow the shares.

    Starting last week, and flowing into this week, management teams at several companies with microcap stocks (with market capitalizations below $100 million) said they were investigating naked short selling — short selling without actually borrowing the shares.

    This brings us to three more terms:

    A short-locate is a service a short seller requests from a broker. The broker finds shares for the short seller to borrow.

    A natural locate is needed to make a “proper” short-sale, according to Moshe Hurwitz, who recently launched Blue Zen Capital Management in Atlanta to specialize in short selling. The broker gives you a price to borrow shares and places the actual shares in your account. You can then short them if you want to.

    A nonnatural locate is “when the broker gives you shares they do not have,” according to Hurwitz.

    When asked if a nonnatural locate would constitute fraud, Hurwitz said “yes.”

    How is naked short selling possible? According to Hurwitz, “it is incumbent on the brokers” to stop placing borrowed shares in customer accounts when supplies of shares are depleted. But he added that some brokers, even in the U.S., lend out the same shares multiple times, because it is lucrative.

    “The reason they do it is when it comes time to settle, to deliver, they are banking on the fact that most of those people are day traders, so there would be enough shares to deliver.”

    Hurwitz cautioned that the current round of complaints about naked short selling wasn’t unusual and even though short selling activity can push a stock’s price down momentarily, “short sellers are buyers in waiting.” They will eventually buy when they cover their short positions.

    “But to really push a stock price down, you need long investors to sell,” he said.

    Different action that can appear to be naked shorting

    Lamensdorf said the illegal naked shorting that Verb Technology Co.
    VERB,
    +69.65%    ,
    Genius Group Ltd.
    GNS,
    +45.37%
    and other microcap companies have been recently complaining about might include activity that isn’t illegal.

    An investor looking to short a stock for which shares weren’t available to borrow, or for which the cost to borrow shares was too high, might enter into “swap transactions or sophisticated over-the-counter derivative transactions,” to bet against the stock,” he said.

    This type of trader would be “pretty sophisticated,” Lamensdorf said. He added that brokers typically have account minimums ranging from $25 million to $50 million for investors making this type of trade. This would mean the trader was likely to be “a decent-sized family office or a fund, with decent liquidity,” he said.

    Don’t miss: This dividend-stock ETF has a 12% yield and is beating the S&P 500 by a substantial amount

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  • U.S. stocks waver in choppy trade, S&P 500 on pace for 5-day losing streak as economic growth worries linger

    U.S. stocks waver in choppy trade, S&P 500 on pace for 5-day losing streak as economic growth worries linger

    U.S. stock indexes are wavering between small gains and losses on Wall Street Wednesday, struggling to gain ground after a four-day losing streak amid worries about the chances of an economic downturn in coming months.

    How are stock-index futures trading
    • S&P 500
      SPX,
      -0.16%
      dropped 14 points, or 0.3%, to 3,927

    • Dow Jones Industrial Average
      DJIA,
      +0.08%
      shed 70 points, or 0.2%, to 33,528, after rallying over 145 points earlier in the session

    • Nasdaq Composite
      COMP,
      -0.50%
      fell 83 points, or 0.8% to 10,931

    On Tuesday, the Dow Jones Industrial Average fell 351 points, or 1.03%, to 33596, the S&P 500 declined 58 points, or 1.44%, to 3,941, and the Nasdaq Composite dropped 225 points, or 2%, to 11,015.

    What’s driving markets

    A four-day losing streak, during which the S&P 500 index has lost 3.4%, showed little sign of being snapped Wednesday as investors continued to assess the potential economic damage inflicted by high inflation and the Federal Reserve’s campaign to damp it by raising interest rates. U.S. stock indexes extended losses in midday trade despite regaining some ground in the morning session.

    MarketWatch Live: S&P 500 on pace for 5-day losing streak as stocks turn negative heading into midday

    “The recent run of macro data points in the U.S. continues to underscore relatively solid economic trends. And combined with the recent easing in financial conditions, it may trigger a need for the Fed to push back in December. Put another way, the dove camp is feeling some pain,” said Stephen Innes, managing partner at SPI Asset Management.

    Jim Reid, strategist at Deutsche Bank , noted that the S&P 500 had now lost ground in the last seven out of eight sessions. “In fact, the latest moves for the S&P mean it’s now unwound the entirety of the rally following Fed Chair Powell’s [supposedly dovish] speech last week, which makes sense on one level given he didn’t actually say anything particularly new.”

    The S&P 500 has fallen 17.2% in 2022 as the Federal Reserve has driven borrowing costs sharply higher in an effort to tame inflation that has been running at the fastest pace in 40 years.

    See: BNP Paribas studied 100 years of market crashes — here’s what it says is coming next

    The Fed’s monetary tightening alongside stubborn inflation may deliver a marked economic slowdown, senior bankers such as JPMorgan’s Jamie Dimon and Goldman Sachs’s David Solomon warned this week.

    “Fears are growing that economies are in for a rough time ahead as feverish inflation and the bitter interest rate medicine being used to bring it down take effect,” said Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown.

    “Worries deepened amid warnings from U.S. banking and media sectors that navigating through the storm would not be easy, while the latest data has shown China’s trade has been sideswiped by a drop in global demand and zero-COVID policies. Despite today’s easing of restrictions it’s clear China’s COVID nightmare is not at an end,” Streeter added.

    China on Wednesday announced a series of measures rolling back some of its most draconian anti-COVID-19 restrictions. People who test positive for the virus will be able to isolate at home rather than in overcrowded and unsanitary field hospitals, and schools where there have been no outbreaks must return to in-class teaching, according to the National Health Commission.

    The Hang Seng index
    HSI,
    -3.22%
    in Hong Kong fell 3.2%, while the CSI 300
    000300,
    -0.25%
    dropped 0.2%, suggesting investors had already discounted Beijing’s more relaxed COVID stance.

    See: A speedy reversal of China COVID-19 restrictions could cause 1 million winter deaths: report

    However, long time bull Tom Lee, head of research at Fundstrat, reckons equities will benefit in coming weeks as investors start to get greater clarity on when the Fed may stop tightening policy.

    “We don’t think the end of the inflation war in 2022 is the Fed cutting rates. It is when Fed and markets see sufficient progress in inflation to remove the upside risks to higher rates. We think this could happen as early as the November CPI report. This will be released on 12/13,” Lee wrote in a note.

    “And if November CPI is soft, we think this will support a strong year-end rally. Admittedly, a 10% move between now and [year end] seems a stretch given the S&P 500 is around 4,000 but… the broader point is we see stocks having positive skew given the cautious positioning of investors and the possibility of very favorable incoming inflation reports,” Lee added.

    On the U.S. economic front, nonfarm productivity, which measures hourly output change per worker, rose at a 0.8% annualized rate last quarter, the Labor Department said on Wednesday. Unit labor costs, the price of labor per single unit of output, climbed by a smaller 2.4% annual pace in the third quarter, compared to the preliminary 3.5% increase.

    What companies are in focus

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  • A Tesla stock plunge could destroy ‘zombie stocks’ such as GameStop and Peloton, warns equity research firm New Constructs

    A Tesla stock plunge could destroy ‘zombie stocks’ such as GameStop and Peloton, warns equity research firm New Constructs

    Tesla shares could decline dramatically — and that could mean disaster for a number of stocks that have already seen deep share-price cuts, according to equity research firm New Constructs.

    The research firm, which uses machine learning and natural language processing to parse corporate filings and model economic earnings, called the stocks in danger “zombie stocks,” and defined them as companies with poor business models that are burning cash at an alarming rate and are at risk of seeing their stock decline to $0 per share.

    The research firm estimates there could be some 300 zombie companies across the marketplace.

    “The Federal Reserve’s aggressive rate hikes so far in 2022 have ended the era of free money and exposed a worrisome dynamic throughout capital markets: zombie stocks,” wrote New Constructs CEO David Trainer, in a note.

    See Now: Tesla earnings are coming, but do record deliveries mask a demand problem?

    New Constructs does not define Tesla Inc.
    TSLA,
    +7.01%
    as a “zombie stock,” citing CEO Elon Musk’s ability to raise capital, but does see the electric car manufacturer as a bellwether for the sector. “It shares many of the common characteristics of a zombie stock, such as an outrageous valuation and high cash burn,” wrote Trainer. “We believe Tesla’s unrelenting share price rise over the past three years – where investors completely ignored company fundamentals – inspired the birth of many of today’s zombie stocks.” 

    Tesla reports its third-quarter results after the closing bell on Oct. 19.

    The company’s stock was trading around $220 on Monday, an increase of over 1,000% compared to three years ago. But Trainer feels that Tesla is at risk of falling more than 80% to $25 a share.

    Tesla’s Optimus bot: ‘High school science project’ or robotics game changer?

    Tesla’s stock has fallen 37.6% in 2022, outpacing the S&P 500 Index’s
    SPX,
    +2.65%
    decline of 22.7%.

    “Its valuation remains nosebleed high because the cash flow expectations baked into the stock price are unreasonably optimistic,” Trainer wrote. “Our message to investors is to take profits in Tesla and avoid zombie stocks at all costs.”

    New Constructs recently added cloud-based communication company RingCentral Inc.
    RNG,
    +6.49%
    to its list of “zombie” stocks. Other companies on the list are Freshpet Inc.
    FRPT,
    -2.03%    ,
     Peloton Interactive Inc.
    PTON,
    +7.04%    ,
     Carvana Co.
    CVNA,
    +6.30%    ,
     Snap Inc.
    SNAP,
    +6.01%    ,
     Beyond Meat Inc.
    BYND,
    +0.64%    ,
     Rivian Automotive Inc.
    RIVN,
    +6.93%    ,
     DoorDash Inc.
    DASH,
    +6.15%    ,
     Shake Shack Inc.
    SHAK,
    +4.01%    ,
     Chewy Inc.
    CHWY,
    +10.76%    ,
     Uber Technologies Inc.
    UBER,
    +4.98%    ,
     Robinhood Markets Inc.
    HOOD,
    +3.24%    ,
     Tilray Brands Inc.
    TLRY,
    +7.32%    ,
     Affirm Holdings Inc.
    AFRM,
    +6.72%    ,
     SunRun Inc.
    RUN,
    +1.70%    ,
     Blue Apron Holdings Inc.
    APRN,
    +3.26%    ,
     and meme stocks AMC Entertainment Holdings Inc. 
    AMC,
    +6.00%
    and GameStop Corp.
    GME,
    +5.40%    .

    See Now: RingCentral added to ‘zombie’ stocks list by equity research firm New Constructs

    “Investors are now fed up with these kinds of companies, especially amid this year’s stock market volatility,” wrote New Constructs’ Trainer. “If investors start to give up on Tesla and take profits on the stock, which is up over 1,000% over the past three years, that spells terrible news for all of the other zombie stocks that don’t have the cash-raising luxury that Tesla has.”  

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