7 Sorry Tech Stocks to Sell in February Before It’s Too Late
There are many reasons to remain bullish on technology stocks. Companies such as Apple (NASDAQ:AAPL) and Alphabet (NASDAQ:GOOGL) remain extremely well-run, hugely profitable enterprises. And pockets of the tech sector, such as artificial intelligence, cloud computing and cybersecurity, continue to grow by leaps and bounds. If ChatGPT is teaching us anything, it is that technology will continue to drive us into the future, whether we like it or not. That said, not all tech companies are equal. Many once-promising tech firms have imploded coming out of the pandemic as the market they operate in fizzles, they remain unprofitable, or they deliver subpar earnings. Whatever the reason, there is no doubt that weak technology stocks have tumbled. And things don’t appear to be getting any better for several technology concerns. Here are seven sorry tech stocks to sell in February before it’s too late.
Tech Stocks to Sell in February: Wish (WISH)
E-commerce app Wish (NASDAQ:WISH) has had a rough ride since its initial public offering (IPO) in December 2020. In a little more than two years, WISH stock has fallen 97%. That puts Wish near the bottom of all penny stocks. Believe it or not, the share price had been above $30 in January 2021, shortly after its market debut.
The problem is that consumers don’t seem to like Wish’s app and have left it in droves. The company’s most recent earnings showed that its revenue declined 66% year-over-year to $125 million, while its net loss swelled 94% to $124 million from the same period a year earlier. Equally bad, Wish’s monthly average users (MAUs) fell 60% year-over-year to 24 million people worldwide. Avoid WISH stock like the plague.
Another company that made its market debut during the depths of the pandemic is Robinhood Markets (NASDAQ:HOOD), the commission-free trading app that will be forever linked to the meme stock craze that roiled financial markets in 2021. Since it went public in July 2021, HOOD stock has declined 70%. It’ has been a steep fall from grace for the company that promised to democratize stock trading and give an edge to retail investors.
Many of the retail traders that relied on Robinhood’s app to buy and sell stocks at the height of the meme-stock frenzy have soured on the company after the volatility of stocks forced it to halt trading on multiple occasions and to temporarily freeze some client accounts.
The company’s push into cryptocurrencies was also poorly timed, with Robinhood going all in on Bitcoin (BTC-USD) and Ethereum (ETH-USD) just as the market for digital assets peaked and declined.
If there’s one company on this list that deserves some sympathy, it is Roku (NASDAQ:ROKU), the maker of internet-connected television sets and purveyor of online advertisements. ROKU stock was riding high during 2020 when pandemic lockdowns fueled a boom in streaming services. The share price rose more than 700% between 2020 and 2021. But since the global economy reopened, Roku’s shares have cratered, declining 65% over the past year.
The company’s woes stem from the fact that it remains unprofitable and has had trouble meeting analysts’ forecasts. In the last five quarters, Roku’s top line has come in below analysts’ average estimates three times, leading many people to write off the company and its stock. Roku has cut 200 jobs and is trying to turn things around.
Will it work? Time will tell. But in the short term, investors should steer clear of ROKU stock.
In 2021, online-real estate was hailed as the next big thing. Until it wasn’t. It turns out people like to walk through houses before they buy them. Add in mortgage rates that are now above 6% in most areas of the U.S., and the entire housing market seems to be taking a breather. The latter situation has not been good for Redfin (NASDAQ:RDFN), an online real-estate brokerage whose share price is down 75% in the past 12 months.
With interest rates expected to remain elevated in the near-term and the housing market unlikely to recover anytime soon, RDFN stock continues to struggle. To start the year, Redfin issued a report saying that the U.S. housing market remains sluggish, with the average home sitting on the market for 44 days, and home sales down 32% from a year earlier.
Run, don’t walk, away from this stock.
Fiverr International (FVRR)
Remember the gi- economy revolution? Israeli tech company Fiverr International (NYSE:FVRR) was built on the promise of supplemental earnings for all. The company runs an online marketplace that connects freelance workers looking to make money with people and/or businesses that want to get short-term projects completed. It sounds like a noble endeavor, and the company thrived in the early days of the pandemic. But now it’s not doing so well now though.
In the last year, FVRR stock has decreased 57%. But that doesn’t capture the true extent of the carnage.
Since peaking in February 2021, Fiverr’s share price has fallen 90%. While the company claims to have a total addressable market of $115 billion, it is having trouble keeping people engaged with its platform.
Freelancers balk at the low pay offered on the site. Many of the 4.2 million people on the platform also don’t like that Fiverr’s “take rate,” which is the percentage of money it keeps from transactions, is 30%. Rival Upwork has a take rate of 15%. Sell FVRR!
Tech visionary Jack Dorsey gave up running Twitter so that he could focus more of his time and energy on financial technology firm Block (NYSE:SQ). Formerly known as “Square,” Block still has its popular Cash App working in its favor. But Dorsey’s focus on crypto and blockchain technology has caused Block and its shareholders massive amounts of pain.
SQ stock peaked at more than $275 a share in February 2021. Since then, the stock has plunged 70%. That includes a 33% pullback in the last year as the global cryptocurrency market imploded. While Dorsey claims to still believe in digital coins and tokens, and remains committed to crypto, many investors aren’t so sure.
Goodrx Holdings (GDRX)
Lastly, we come to Goodrx Holdings (NASDAQ:GDRX), the telemedicine platform that tracks prescription drug prices in the U.S. and provides drug coupons and discounts for many different types of medications. Given the cost of prescription drugs in America, one would assume that GDRX stock would be going through the roof. But since its IPO in September 2020, GDRX stock has plummeted 90%.
The stock has declined 77% over the last 12 months. Issues abound at the company. Its third-quarter earnings report delivered last November was abysmal. Specifically, its revenue dropped 4% versus the same period a year earlier to $187.3 million, while its monthly active user base decreased 9% year-over-year.
Goodrx provided Q4 guidance that calls for an 18% YOY decline in its revenue. This stock is too sick to consider buying right now. Be sure to sell it in February.
On the date of publication, Joel Baglole held long positions in AAPL and GOOGL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.