October 7, 2022

Enterprise JM

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These 15 stocks rose 100% or more during the pandemic, but they’ve since been crushed. Is it now time to buy?

It may seem as if Peloton — one of the biggest stock-market winners in the early part of the coronavirus pandemic — has only recently crashed and burned. But the stock’s price actually peaked in January 2021 and had fallen 79% through the end of 2021.

Peloton Interactive Inc.
PTON
is very much in-play. See here:

During the earlier stages of the pandemic, investors seeing stocks such as Zoom Video Communications Inc.
ZM
and DocuSign Inc.
DOCU
rocketing during lockdowns realized they couldn’t go up forever. But they also didn’t know how long the initial lockdown period would last, and they might have been afraid of missing out. Investors or traders might have scored tidy profits if they jumped on the bandwagon and got off in time.

Getting back to Peloton, the share price price more than doubled during the first half of 2020. So that sets the stage for a screen of stocks that have gone through pandemic boom-and-bust cycles.

Pandemic winners transform into losers

The screen begins with the Russell 1000 Index
RUI,
which includes the largest American companies that are publicly traded, weighted by market capitalization.

Among the Russell 1000, 20 stocks doubled in price, at least, from the end of 2019 through June 20, 2020. Among those, 15 were down at least 50% from their pandemic intraday highs through the close on Feb. 7, 2022.

Here they are, sorted by how much they have declined from those highs:

Company

Ticker

Decline from pandemic high

Price increase – Dec. 31, 2019, through pandemic high

Date of intraday high since Dec. 31, 2019

Price increase – Dec. 31, 2019, through June 30, 2020

Peloton Interactive Inc. Class A

PTON -83%

502%

01/14/2021

103%

Fastly Inc. Class A

FSLY -80%

580%

10/13/2020

324%

Zoom Video Communications Inc. Class A

ZM -76%

765%

10/19/2020

273%

Teladoc Health Inc.

TDOC -76%

268%

02/16/2021

128%

Plug Power Inc.

PLUG -72%

2289%

01/26/2021

160%

Novavax Inc.

NVAX -71%

8234%

02/09/2021

1994%

DraftKings Inc. Class A

DKNG -71%

595%

03/22/2021

211%

Quidel Corp.

QDEL -69%

309%

08/06/2020

198%

Moderna Inc.

MRNA -68%

2443%

08/10/2021

228%

Wix.com Ltd.

WIX -67%

196%

02/19/2021

109%

DocuSign Inc.

DOCU -62%

325%

08/10/2021

132%

Wayfair Inc. Class A

W -62%

308%

01/14/2021

119%

Twilio Inc. Class A

TWLO -57%

365%

02/18/2021

123%

Etsy Inc.

ETSY -56%

595%

11/26/2021

140%

Cloudflare Inc. Class A

NET -52%

1199%

11/18/2021

111%

Source: FactSet

Click on the tickers for more about each company.

You should also read Tomi Kilgore’s detailed guide to the wealth of information available for free on the MarketWatch quote page.

As to whether you should consider buying any of these stocks in hopes of a rebound, it might be best to look beyond trading momentum and buzz, and turn toward fundamentals. You might consider likely the companies are to continue or resume a steady growth path leading to consistent profits.

Read: Netflix vs. Facebook: Which is the better stock after those shocking earnings?

Leaving the group in the same order, here are projected compound annual growth rates (CAGR) for sales through calendar 2023. We’re using calendar-year estimates because some of the companies have fiscal years that don’t match the calendar. Since we’re still in earnings season, the figures for 2021 are also consensus estimates among analysts polled by FactSet:

Company

Ticker

Two-year estimated sales CAGR

Estimated sales – 2021 ($mil)

Estimated sales – 2022 ($mil)

Estimated sales – 2023 ($mil)

Peloton Interactive Inc. Class A

PTON 15.6%

$4,062

$4,534

$5,426

Fastly Inc. Class A

FSLY 19.6%

$349

$417

$499

Zoom Video Communications Inc. Class A

ZM 17.8%

$3,960

$4,677

$5,492

Teladoc Health Inc.

TDOC 25.4%

$2,025

$2,575

$3,181

Plug Power Inc.

PLUG 66.3%

$497

$906

$1,375

Novavax Inc.

NVAX 33.7%

$1,365

$4,942

$2,441

DraftKings Inc. Class A

DKNG 41.5%

$1,269

$1,901

$2,542

Quidel Corp.

QDEL -31.8%

$1,574

$985

$733

Moderna Inc.

MRNA -16.1%

$18,020

$21,499

$12,694

Wix.com Ltd.

WIX 20.9%

$1,273

$1,529

$1,859

DocuSign Inc.

DOCU 25.0%

$2,034

$2,564

$3,175

Wayfair Inc. Class A

W 14.0%

$13,766

$15,166

$17,885

Twilio Inc. Class A

TWLO 30.8%

$2,767

$3,660

$4,731

Etsy Inc.

ETSY 20.4%

$2,297

$2,764

$3,331

Cloudflare Inc. Class A

NET 35.2%

$648

$891

$1,183

Source: FactSet

Aside from Quidel Corp.
QDEL
and Moderna Inc.
MRNA,
the companies are expected to achieve double-digit growth rates for sales over the next two years.

Most of the companies weren’t profitable during 2021. Here are consensus estimates for earnings per share through calendar 2023:

Company

Ticker

Estimated EPS – 2021

Estimated EPS – 2022

Estimated EPS – 2023

Peloton Interactive Inc. Class A

PTON -$1.77

-$1.97

-$0.76

Fastly Inc. Class A

FSLY -$0.55

-$0.49

-$0.29

Zoom Video Communications Inc. Class A

ZM $4.72

$4.41

$4.76

Teladoc Health Inc.

TDOC -$3.24

-$1.82

-$1.26

Plug Power Inc.

PLUG -$0.57

-$0.26

-$0.06

Novavax Inc.

NVAX -$12.56

$29.31

$13.68

DraftKings Inc. Class A

DKNG -$3.61

-$2.45

-$1.62

Quidel Corp.

QDEL $16.12

$8.73

$3.89

Moderna Inc.

MRNA $27.27

$28.13

$13.04

Wix.com Ltd.

WIX -$1.39

-$1.43

-$0.39

DocuSign Inc.

DOCU $1.89

$2.14

$2.72

Wayfair Inc. Class A

W $2.58

$1.60

$4.28

Twilio Inc. Class A

TWLO -$0.25

-$0.03

$0.32

Etsy Inc.

ETSY $3.03

$3.48

$4.64

Cloudflare Inc. Class A

NET -$0.05

$0.02

$0.10

Source: FactSet

Companies on the list expected to swing to calendar-year profitability this year or in 2023 include Novavax Inc.
NVAX,
Twilio Inc.
TWLO
and Cloudflare Inc.
NET.

Here’s a summary of ratings and consensus price targets among analysts polled by FactSet:

Company

Ticker

Share “buy” ratings

Share  neutral ratings

Share “sell” ratings

Closing price – Feb. 7

Cons. price target

Implied 12-month upside potential

Peloton Interactive Inc. Class A

PTON 52%

42%

6%

$29.75

$46.54

56%

Fastly Inc. Class A

FSLY 8%

77%

15%

$26.91

$37.22

38%

Zoom Video Communications Inc. Class A

ZM 50%

47%

3%

$141.44

$265.83

88%

Teladoc Health Inc.

TDOC 57%

40%

3%

$74.53

$129.48

74%

Plug Power Inc.

PLUG 76%

24%

0%

$21.46

$43.33

102%

Novavax Inc.

NVAX 71%

29%

0%

$94.80

$250.00

164%

DraftKings Inc. Class A

DKNG 59%

38%

3%

$21.50

$50.41

134%

Quidel Corp.

QDEL 75%

25%

0%

$96.40

$171.33

78%

Moderna Inc.

MRNA 43%

52%

5%

$160.27

$272.73

70%

Wix.com Ltd.

WIX 71%

29%

0%

$119.38

$228.50

91%

DocuSign Inc.

DOCU 54%

41%

5%

$118.41

$195.44

65%

Wayfair Inc. Class A

W 34%

50%

16%

$141.24

$244.76

73%

Twilio Inc. Class A

TWLO 94%

6%

0%

$195.78

$358.46

83%

Etsy Inc.

ETSY 67%

28%

5%

$135.66

$239.83

77%

Cloudflare Inc. Class A

NET 48%

47%

5%

$107.10

$156.94

47%

Source: FactSet

More than half of the analysts rate Peloton a “buy” or the equivalent. Twilio is the analysts’ favorite, with 94% favorable ratings.

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