After Nasdaq’s correction, investors will not tolerate companies that lose money. The modest decline in the index hides the true bear market. Many stocks are down 50% or more.
Investors should avoid the following companies after they posted poor results. In Q4, Skillz, a mobile gaming firm with e-sports betting, posted revenue guidance of $400 million for 2022. Analysts expected $549 million. The huge miss is a reminder that investors must avoid nearly all post-SPACs.
Lemonade (LMND), an insurance firm, expects Q1 revenue as low as $41 million. In Q4, it lost $1.14 a share. Though in-force premium rose by 78% Y/Y to $380.1 million, its business is worsening. It posted a net loss ratio of 98%. LMND stock will keep falling as the firm burns through a billion dollars in cash annually.
Monday (MNDY) is another dot-com-like stock that plunged after posting Q4 losses of 26 cents a share (non-GAAP). Revenue was $95.5 million, up by 90.5% Y/Y. The firm posted strong growth yet the price/sales of around 27 times is too high.
Software firm Bandwidth (BAND) posted a 9 cent non-GAAP EPS. Its FY 2022 revenue forecast of $547-$555 million and non-GAAP EPS of $0.03 – $0.09 is weak. Analysts expected an EPS of 76 cents.