Hot Stocks: Online gambling stocks fall; ROKU, RDFN plunge on earnings; APPN rises
Stocks suffered another day of losses on Friday, adding a modest retreat to the previous day’s substantial decline. Geopolitical tension and general worries about the direction of the market in the face of looming rate hikes kept investors on the sideline.
The selling affected online gambling stocks, which were dragged down by a disappointing forecast from DraftKings. Golden Nugget Online Gaming (NASDAQ:GNOG), Rush Street Interactive (NYSE:RSI) and Penn National Gaming (NASDAQ:PENN) all came under pressure.
Roku (NASDAQ:ROKU) and Redfin (NASDAQ:RDFN) both suffered massive declines as well. Each dropped in the wake of its respective earnings report, with weak guidance prompting investors to rush out of the stocks.
Looking at some of the day’s standout gainers, Appian (NASDAQ:APPN) posted a double-digit percentage gain following the release of better-than-expected earnings. Earnings also gave a lift to Sealed Air (NYSE:SEE), which set a fresh 52-week high.
Sector In Focus
As industry heavyweight DraftKings delayed its profitability plan, online gambling stocks in general lost ground, with investors continuing to lose patience with companies’ inability to turn the growing trend of internet sports betting into bottom-line success.
DKNG lost nearly 22% on the day after its Q4 results included a disappointing 2022 forecast. While the company saw Q4 revenue growth of 47%, it dramatically expanded its loss expectation for 2022. The company projected an adjusted EBITDA loss of $825M-$925M for the year.
With this forecast, many of DKNG’s peers lost ground as well. Golden Nugget Online Gaming (GNOG) posted a decline of more than 21%. Rush Street Interactive (RSI) dropped almost 7%, while Penn National Gaming (PENN) retreated 4%.
Shares of Appian (APPN) got a lift from better-than-expected earnings and guidance. On the news, the stock popped 13%, although it remains near recent 52-week lows.
The enterprise software maker reported a Q4 loss that came in narrower than analysts had expected. Revenue also beat projections, rising nearly 29% to reach $105M.
The firm also predicted a loss between $0.12 and $0.15 per share for Q1. Analysts had expected a wider loss, targeting a level around $0.19 per share. APPN’s revenue forecast also topped the current consensus, with a figure between $106M and $108M.
APPN rallied $6.37 to end the session at $55.65. Even with the advance, the stock remains within a recent trading range, hovering off a 52-week low of $46.85.
Shares had topped $225 early last year. The stock is now down 73% over the past 12 months.
Disappointing earnings and a dismal forecast sparked a selling spree in shares of Roku (ROKU). The stock dropped 22%, adding to a long-term decline that began in the middle of last year.
For its latest quarter, the streaming TV provider and electronic device maker topped earnings expectations but fell short on the revenue side, despite a 33% advance from last year.
Looking ahead, the company predicted a Q1 revenue figure around $720M, below the $756M projected by analysts. The firm also pointed to a likely EBITDA figure of $55M. In providing its forecast, the company highlighted ongoing supply chain problems.
ROKU plummeted $32.25 to finish at $112.47. Although it trimmed some of its losses, the stock set an intraday 52-week low of $102.60 during the session.
Looking longer term, shares rallied from March 2020 into February 2021. While it lost momentum from there, the stock recorded a close of $479.50 as recently as July, with a 52-week high of $490.76.
However, as the company’s growth prospects seemed to stall and Wall Street turned away from more speculative stocks, ROKU lost favor, falling steadily in the second half of 2021 and into 2022.
ROKU is now down about 67% in the past six months.
Notable New High
Sealed Air (SEE) climbed 3% on solid earnings and an upbeat forecast. With the advance, the stock set a fresh 52-week high.
While its Q4 earnings figure came in fractionally below the amount predicted by analysts, the maker of packaging products reported 14% revenue growth and gave an adjusted EBITDA figure that climbed 18% from last year to reach $330M.
Looking ahead, SEE, which produces products like Bubble Wrap, predicted revenues of $5.8B-$6.0B for 2022. Analysts were targeting a number around $5.78B.
SEE finished Friday’s session at $69.31, a gain of $1.97 on the day. Earlier in the session, the stock set an intraday 52-week high of $70.37.
With the advance, the stock ticked abo
ve a recent trading range to add to gains seen in 2021. SEE has now climbed nearly 59% over the past year.
Notable New Low
Shares of Redfin (RDFN) cratered despite reporting Q4 results that beat expectations on the headline numbers. Soft guidance sparked a 20% sell-off, with the stock reaching a new 52-week low.
The real estate brokerage exceeded projections with its quarterly earnings and revenue, showing a top-line figure that notched a growth rate of more than 160%. However, RDFN issued a forecast that included a dramatic sequential increase in its net loss.
The firm predicted a Q1 net loss of $115M-$122M. This compared to a $27M loss recorded in Q4.
RDFN dropped $5.78 to close at $22.86. Shares cut their losses going into the close but set an intraday 52-week low of $20.44 early in the day.
After a steep rally in 2020 and the early part of 2021, the stock has come under intermittent selling pressure since hitting a 52-week high of $98.44 last February. RDFN has now lost about 76% of its value in the past year.
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