PetMed Express (PETS):
With shares down more than 60% over the past decade and six consecutive quarters of missing estimates, the dividend suspension raises red flags that about his financial health.
Fisker (FSR): In the face of a delisting announcement on the New York Stock Exchange and a huge net loss of more than $400 million in the fourth quarter, Fisker's survival depends on financial uncertainty in the future.
LivePerson (LPSN):
With sales down more than 70% year over year, LivePerson is struggling with its fourth straight quarter of double-digit declines.
As the stock market reaches new highs, investors' appetite for risk continues to increase. Therefore, in an emergency situation, this is a good time to sell stocks and optimize your portfolio. The increase in the market represents a significant change from the cautious approach taken in recent years. However, despite this "risky" environment, not all market segments benefit equally. Artificial intelligence has been a major trend in the stock market over the past year, driving the rally of penny stocks. However, this is not the case for penny stocks in other sectors, so investors should reassess their portfolios. As risk appetite continues to increase in the broader market, this is a good time to identify stocks to exit, thus improving your investment strategy in the market environment. Petition for Health (PET)
PetMed Express
(NASDAQ: PETS ) is the online pet pharmacy facing an uphill battle, marked by financial missteps. The company's decision to suspend its payment in the second quarter, with the aim of diverting funds for business expansion, speaks of many concerns facing the company at this time. Additionally, the second quarter was the company's sixth straight quarter to miss analyst expectations. Net sales of $71 million missed expectations by $5 million, and EBITDA was down 55% year over year.
To be fair, PETS animals are no longer stimulating for a while. Its shares have lost 64% of their value over the past decade, while the S&P 500 is up 179%. When shares continue to lose value, a dividend cut is a double whammy for investors. Furthermore, the return on common equity is a negative 4.83%, indicating a lack of residual value.
Fisker (FSR)
Electric vehicle (EV) maker Fisker (NYSE: FSR ) is struggling with serious financial problems. Recently, the company revealed that it had received a notice from the New York Stock Exchange saying that it was unable to maintain the minimum price of $1 per share for 30 days. In this crisis, Fisker is looking for funding, hoping that the Fisker Ocean 2024 model will lead the country to sustainability. In the fourth quarter, the company reported a net loss of $463.6 million, with its cash reserves down 67% from December 2020.
CEO Henrik Fisker warned on a recent earnings call that 2024 will be a challenging year for the company. To address these challenges, Lucid shifted to a vendor model, laying off employees and cutting expenses to avoid problems. In addition, according to the Wall Street Journal, the company is preparing for bankruptcy, which will complicate the situation for its investors. That's one of the pennies worth buying.
Life Person (LPSN)
Amidst increasing competition in the communications space, LivePerson (NASDAQ: LPSN ) is facing significant difficulties, characterized by slow growth and sluggish earnings. To meet the changes, the company's strategy in 2024 is to focus on high margin businesses and offer additional business. However, the company is facing an uphill battle, with its share price down more than 72% year to date.
The company's latest financial statements exacerbate these challenges. Fourth-quarter GAAP earnings per share fell to a negative 48 cents, 17 cents below analyst expectations. Also, revenue fell 22.1% year over year to $95.47 million, marking the fourth consecutive quarter of double-digit sales growth declines. As we move forward, the company's guidance is equally bleak, with full-year 2024 sales expected to range from $300 million to $315 million, suggesting that revenue will decline 24% to 20 % year on year.
Micro Vision (MVIS)
MicroVision (NASDAQ: MVIS) is best known for developing lidar technology that is critical to the commercialization of autonomous vehicles. Although there are no real achievements in terms of business, the stock is in the green zone due to the nature of the meme property. The company touted advances in lidar technology in its quarterly earnings report, but acknowledged that commercial viability and profitability are still a challenge. The overall slowdown in the electric vehicle industry has exacerbated this prudence and reduced investor confidence in electric vehicles.
Poor market sentiment in the electric vehicle market, and MicroVision's admission that they still have a long way to go to market readiness, paints a mixed picture. Entrepreneurs, while comforted by meme-driven enthusiasm, also faced the reality that the company had a long-term opportunity. All in all, this is one penny bag to buy.
Lucid Group (LCID)
The journey of electric vehicle startup Lucid Group (NASDAQ: LCID ) since its initial public offering in July 2021 has failed to meet investors' expectations. LCID stock sank 64.30% in the past year amid investment challenges. Last year, the company delivered just 6,000 vehicles, with fourth-quarter deliveries down 32% from the previous year. This decline comes at a time when the electric vehicle market is under severe pressure, challenging Lucid's position.
Analysts looking for Alpha say that Lucid may not be profitable before 2029. Additionally, Lucid has been much slower to enter the market with a competitive EV lineup than its competitors. The company plans to produce only 9,000 cars by 2024, which seems low considering the amount of deaths per car sold. In the fourth quarter of 2023, the company lost $653.8 million, for a total loss of $2.8 billion.
New York Community Bancorp (NYCB)
New York Community Bank (NYSE: NYCB) is under heavy scrutiny amid internal and leadership problems. A sudden increase in the bank's loan loss reserves and cost cuts in January sent NYCB shares down more than 65% in the past three months. Despite the bank's recent struggles, problems continued with the departure of CEO Thomas Cangemi and the promotion of executive chairman Alessandro DiNello. In recognition of internal weaknesses, changes in key management identified key management vulnerabilities, particularly in the financial review process and monitoring procedures.
Additionally, these challenges reflect the tough times New York Community Bancorp is facing, with a fourth-quarter loss that missed expectations by $2.4 billion and slipped to $2.7 billion. This lack of funds seriously undermines investor confidence. Although a bank may avoid bankruptcy, the resulting actions, including the choice to trade securities or raise additional funds, may further weaken its financial and stock performance. Given the unresolved issues and the bank's uncertain future, investors are wise to avoid NYCB stock.
AMC Entertainment Company (AMC)
Shares of movie theater chain operator AMC Entertainment (NYSE: AMC ) fell more than 90% last year, signaling deeper challenges. This major decline was due to disappointing box office performance and the rapid growth of streaming media that was transforming the entertainment space. While the quarterly report may appear to show positive changes, the reality shows a very troubling situation ahead for AMC. The company's fourth-quarter sales rose 11.5% to $1.1 billion, a figure that topped Wall Street expectations. In addition, AMC's net loss improved, falling to $182 million from $287.7 million. But it's worth noting that her better financial performance was driven almost entirely by two blockbuster movies: Taylor Swift: Time Tour and Renaissance: The Beyoncé Movie. Relying on a few big releases for sales and EBITDA growth shows how weak AMC's path to recovery is. Strengthening AMC's financial position is its debt-to-equity ratio of negative 4.95, which reflects shareholder equity.
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