While the market focuses on high-flying tech names, such as Nvidia and Microsoft, some investors might be shifting their attention to a different breed of stocks. Several large-cap companies have diverged from the overall market and soaring trajectories of their sector counterparts and instead find themselves in extremely oversold territory.
Enter SNOW, TSLA, SIRI, BA, and DLTR. Despite the recent spotlight on the tech sector and a surging overall market, these stocks have caught investors' eyes for different reasons - their significant pullbacks.
So, let’s unpack each of these stocks to see whether these companies represent compelling buying opportunities amidst their current oversold conditions or if further downward pressure awaits.
Following its latest earnings release, shares gapped down and traded lower, with year-to-date losses now approaching 20%. The cloud-based data storage, computer, and analytics company reported ($0.44) EPS for the quarter, topping analysts' consensus estimates of ($0.49) by $0.05. The firm had revenue of $774.70 million for the quarter, compared to analysts' expectations of $759.86 million.
Given the recent overwhelming selloff over prior weeks, the RSI is currently at 26.80, reflecting highly oversold conditions in the short term. Analysts forecast a significant upside for the stock, with a moderate buy rating and price target indicating an almost 30% upside.
Similarly, Dollar Tree experienced a dip following its latest quarterly earnings release on March 13th, 2024. Despite posting earnings per share (EPS) of $2.55 for the quarter, slightly below the consensus estimate of $2.67 by $0.12, the company reported robust revenue of $8.63 billion, demonstrating an 11.9% year-over-year increase.
DLTR's RSI is currently at 28.35, making it highly oversold. Analysts maintain a moderate buy rating, with projected earnings growth of 17.30% for the upcoming year and a price target suggesting nearly a 20% upside potential.
Tesla, the worst-performing member of the magnificent seven year-to-date, has seen its shares plummet by over 30%. Despite reporting earnings per share of $0.71 for the quarter, falling short of estimates by $0.04, the company achieved a 3.5% increase in quarterly revenue compared to the previous year.
Tesla's RSI is currently at 27.99, signaling highly oversold conditions. Its year-to-date decline of almost 35% solidifies its position as the poorest performer in the S&P 500. But with its forward P/E now under 40 and its stock swiftly approaching potential support near $150, a relief bounce and price stabilization might soon be in sight.
Boeing, trailing just behind Tesla as the second worst performer in the S&P 500, grapples with significant challenges as its RSI sits at 24, indicating deeply oversold conditions. With a year-to-date decline of nearly 30% and a recent drop of over 10% in the past month, the aerospace giant faces a barrage of negative catalysts, ranging from mechanical issues to production setbacks. Amidst this turbulence, analysts maintain a moderate buy rating on the stock, projecting an impressive upside of almost 40% according to consensus price targets. Despite the current storm of negative headlines, optimism remains steadfast regarding Boeing's long-term prospects.
Sirius XM Holdings has been in a severe downtrend marked by overwhelmingly bearish sentiment. The stock has an RSI of 21.93, signaling deep oversold conditions. In its recent earnings report on February 1st, 2024, Sirius surpassed expectations with earnings per share of $0.09, outpacing estimates by $0.02. However, revenue for the quarter slightly missed the mark, totaling $2.29 billion compared to the consensus estimate of $2.30 billion. Additionally, Sirius XM faces considerable pressure from short sellers, with 24.43% of its float sold short as of February 29.
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