Stocks had a horrible day in the stock market today, April 21, 2022. Overall, the S&P 500 fell 1.6% to 4390 as the NASDAQ declined 2.2% to 13160.
MANY aggressive growth stocks were trounced on the day, including Shopify (SHOP) which dropped 8% to $481. Last qtr was a shocker for Shopify as the company has to build warehouses to compete with Amazon. Good Luck! Management said $200 million will cover it yeah right. Analysts then took 2023 profit estimates down from $9.21 to $5.94, and 2024 estimates from $25.20 to $11.17. I think 65 P/E or ~$300 seems fair for SHOP stock.
Tesla’s Earnings Were a Bright Spot
Yesterday after the market close, Tesla (TSLA) reported earnings. The company whipped our estimates of $2.24 in profits (EPS) the qtr, and delivered $3.22 a share, which was 246% profit growth year-over-year.
TSLA seems to be the top stock in the market, and the poor market conditions are holding the stock back long enough for investors to buy more shares.
I will probably add heavily to my position in the stock next week after I update my charts.
Still, TSLA stock was only up 3% to $109 on the day as only 4 stocks of the 100-or-so we cover were positive.
Chart of the Day
Our chart of the day is this one-year chart of RH (RH) from April 7. Although the stock has lost half its value, it seems to be bottoming.
RH is navigating a rough period as softening demand, and the combination of these factors has caused the stock to loose half its value during the past six months. The weakening demand coincided with Russia’s invasion of Ukraine and the stock market volatility that followed. And honestly, gains in the stock market often fuel sales ar RH. Higher interest rates are also bearing down on the housing market, and new homes were pushing demand of new furniture.
Overall, this seems like a year of transition for RH stock. But with a P/E of only 13, there’s now HUGE upside for this stock (after this year of transition). My 2022 Fair Value is $562 which is 67% higher than today’s close.
