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2 days ago
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Analyst says popular meme stock is an exercise in futility
Analyst says popular meme stock is an exercise in futility originally appeared on TheStreet. Meme stocks come and go. Then they come back and go again. A whiff of positive news – a good line in an earnings report, a hint of a merger, a rumor potentially started by a trader looking to unload a position at a profit – can bring any meme stock back to the fore. With the second busiest week of earnings season now over, that kind of action was visible this week, prompting one researcher to issue a fresh warning about an old meme stock that recently caught fire again. What are meme-stocks? While meme stocks create new stories and legends with each passing cycle, the truth about many of these companies is that they are working their way towards nothing—the abyss that awaits when social sentiment finally wanes and the balance sheet is all that is left. Think Bed, Bath & Beyond, which was trading at less than $4 per share in 2020 when it got caught up in the meme mania ignited by video-game retailer GameStop () . Share prices surged past $50 per share before the public's attention turned and the company began an inexorable death spiral, buried under a mountain of debt and other problems. Bed Bath & Beyond filed for protection from creditors under Chapter 11 of the U.S. bankruptcy code in April of 2023 and subsequently closed its 360 stores. But it's hardly alone. AMC Entertainment () was an OG meme stock with GameStop. Three years ago, it was trading at over $130 per share, but now it trades at less than three bucks a share, roughly 50 percent off its 52-week high. GameStop, meanwhile, trades roughly where it was a year ago but is off by over 30 percent from its most recent peak in mid-May. While yesterday's meme stocks are likely to rekindle some interest periodically, they have been replaced by names like Opendoor, Krispy Kreme, GoPro, and Kohl's, all of which have ridden the tsunami that can happen when social media and active traders mix. David Trainer, founder and president at New Constructs, a Nashville-based independent investment research firm, has said for years that meme stocks are all about a trader's willingness to focus on hype and hope and ignore numbers. He believes the numbers win out in the end, but he acknowledges that plenty of stocks overcome bad news to be back in the market's good graces even while they are on a fiscal path to oblivion. A meme stock with surprise earnings is a hot ticket Peloton Interactive () —which has been in the realm of meme stocks since it became a darling of the pandemic—got just that kind of boost on August 7, when it reported a profit for its fiscal fourth quarter, boosting shares by about 10% while the market ignored a warning that sales of exercise machines and digital subscriptions are set to decline, requiring some layoffs and a relocation of operations to cut costs. The fitness-equipment maker registered a $21.6 million profit (5 cents a share), compared to a loss of $31.9 million a year earlier. According to a FactSet survey, analysts on average were expecting a loss of 7 cents a share, slightly better than a year ago. But before the positive earnings surprise, Trainer was already calling for Peloton to suffer the ultimate meme stock fate, featuring the stock on the August 4 edition of 'The Danger Zone' on the Money Life with Chuck Jaffe Constructs brings together discounted cash-flow analysis and forensic accounting to evaluate securities on a scale of 'most attractive' to 'most dangerous.' The firm's stock-picking has been rated by SumZero at or near the top of multiple investment categories, most notably leading consistently in consumer discretionary stocks; SumZero is a buy-side community in which more than 15,000 professional portfolio managers compete for rankings. Peloton: 'Dangerous' from its birth as an IPO New Constructs first featured Peloton in the Danger Zone prior to its IPO in September 2019; since then, the firm reports that its shares have fallen 72% while the Standard & Poor's 500 is up roughly 115%. But what put Peloton back in the Danger Zone recently is that meme-stock investors are tuning out the company's long-term results and looking at its recent performance. Shares are up more than 100% from last August, largely due to shrinking losses. New Constructs reported that, 'this turnaround story is already baked into the stock valuation, and at current prices, downside risk remains large,' driven by declining sales, high cash burn, the sale of assets, shareholder dilution, and 'a stock valuation that implies drastic margin improvement and rapid revenue growth.' Trainer, in his Danger Zone appearance on the August 4 edition of Money Life, said Peloton is 'making a little meme stock run here … and we just want to remind people that it's still a bad stock.' 'Peloton still has negative margins, negative economic book value, and it's trading as if its profits are going to dramatically increase and its revenues are going to grow 800%,' Trainer said. 'So like whatever turnaround you think there might be here, you know, we think it's all priced in.' Trainer said Peloton's 'business model is not a good business model,' noting that the bounce-back is a misdirect or a head fake and that Peloton is 'just left with something that's going to probably die pretty slowly.' He acknowledged that the stock could still have another meme stock run, possibly a dead-cat bounce and can survive for a while until he thinks the inevitable happens. He pegged the economic book value on PTON at a negative $6.60 per share, adding that it's first-mover advantage in the home exercise space is gone, and that he would value the company 'conservatively' at less than a dollar per share. Said Trainer: 'This one could really go bankrupt.'Analyst says popular meme stock is an exercise in futility first appeared on TheStreet on Aug 9, 2025 This story was originally reported by TheStreet on Aug 9, 2025, where it first appeared.
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2 days ago
- Business
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Rockwell Automation price target raised to $355 from $340 at Baird
Baird raised the firm's price target on Rockwell Automation (ROK) to $355 from $340 and keeps an Outperform rating on the shares. The firm updated its model following Q2 results where execution was crisp and automation demand remained steady. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Published first on TheFly – the ultimate source for real-time, market-moving breaking financial news. Try Now>> See today's best-performing stocks on TipRanks >> Read More on ROK: Disclaimer & DisclosureReport an Issue Trade Desk downgraded, Instacart upgraded: Wall Street's top analyst calls Rockwell Automation downgraded to Equal Weight from Overweight at Wells Fargo Rockwell Automation price target lowered to $363 from $371 at Oppenheimer Rockwell Automation price target raised to $380 from $370 at KeyBanc Rockwell Automation price target lowered to $357 from $370 at Barclays Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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5 days ago
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Singapore bank DBS second-quarter net profit rises 1% on-year
SINGAPORE (Reuters) -DBS Group, Singapore's biggest bank, posted on Thursday a 1% rise in net profit in the second quarter from a year earlier on the back of higher total income. Sign in to access your portfolio
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5 days ago
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Citi ups Syndax target, opens ‘upside catalyst watch'
Citi analyst Yigal Nochomovitz raised the firm's price target on Syndax (SNDX) to $51 from $46 and keeps a Buy rating on the shares. The firm also added a positive 'upside catalyst watch' on Syndax ahead of the PDUFA deadline in relapsed or refractory NPM1-mutated acute myeloid leukemia of October 25. Q2 revenue of about $38M beat the firm's estimates by greater than 70% and Visible Alpha consensus by about 45%, driven by growth for Revuforj and Niktimvo, the analyst added. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Published first on TheFly – the ultimate source for real-time, market-moving breaking financial news. Try Now>> See the top stocks recommended by analysts >> Read More on SNDX: Disclaimer & DisclosureReport an Issue Syndax price target raised to $56 from $43 at BTIG Syndax Pharmaceuticals Reports Strong Q2 2025 Growth Syndax Pharmaceuticals: Strong Performance and Growth Potential Justify Buy Rating Syndax reports Q2 EPS (83c), consensus ($1.01) Syndax options imply 9.0% move in share price post-earnings
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5 days ago
- Business
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Freshpet price target lowered to $70 from $80 at Truist
Truist lowered the firm's price target on Freshpet (FRPT) to $70 from $80 and keeps a Hold rating on the shares. The firm is updating its model following the company's Q2 results, the analyst tells investors in a research note. Truist also maintains that the company's valuation will remain depressed until growth returns to the overall pet category. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Published first on TheFly – the ultimate source for real-time, market-moving breaking financial news. Try Now>> See the top stocks recommended by analysts >> Read More on FRPT: Disclaimer & DisclosureReport an Issue Freshpet price target lowered to $95 from $120 at Benchmark Cautious Hold Rating on Freshpet Amid Sales Shortfall and Competitive Pressures Freshpet Inc. Reports Strong Q2 2025 Performance Freshpet's Growth Potential and Profitability: Analyst Reiterates Buy Rating with Optimistic Outlook Freshpet Reports Strong Q2 2025 Financial Results Sign in to access your portfolio
