Stocks

Hot Stocks: TDOC plunges 40%; social media stocks rally; SU activist investor; ALGN falls

Stocks surged on Thursday, paced by the Nasdaq, which led the advance with a 3% rally. The buying came as investors focused on optimistic signs for tech earnings rather than economic data, which showed a surprise GDP contraction in Q1.

Social media stocks were at the vanguard of the advance. Meta Platforms and Pinterest (PINS) both posted double-digit percentage gains in the wake of their respective quarterly reports. The halo effect carried over to names like Snap (SNAP) rose 6% and Digital World Acquisition (DWAC).

Suncor Energy (SU) also showed significant gains during the session. Shares of the Canadian oil sands crude producer jumped on interest from an activist investor.

Looking at some of the stocks left out of Thursday’s rally, Teladoc (NYSE:TDOC) lost two-fifths of its value following a disastrous earnings report. Meanwhile, the release of financial figures also triggered an investor exodus out of Align Technology (ALGN).

Sector In Focus

A better-than-expected profit from Meta Platforms gave a lift to the entire social media sector, with the Facebook parent finishing Thursday’s session with a gain of 18%. The space got a boost from Pinterest (PINS) as well, which also posted a double-digit percentage gain in the wake of its earnings report.

PINS rose almost 14% on the session, as the company beat expectations with its latest results and predicted that pandemic headwinds would dissipate later this year.

The gains carried over to other players in the sector, as investors hoped that the positive results point to renewed growth prospects for social media. Snap (SNAP) rose 6% and Digital World Acquisition (DWAC), the SPAC slated to take Donald Trump’s Truth Social public, climbed almost 8%.

Twitter (TWTR), which has a pending deal to be acquired by Elon Musk, advanced about 1%.

Standout Loser

The release of a disappointing earnings report sent shares of Teladoc (TDOC) reeling. The stock finished lower by 40%, crashing to a new 52-week low.

The provider of remote doctor consultations reported a massive Q1 loss of $6.7B. However, this included a non-cash goodwill impairment charge of $6.6B — a move it was forced to make to write down the value of its purchase of Livongo, a digital disease management firm TDOC purchased in 2020 for $18.5B.

On the revenue front, TDOC said its top line rose 25% to $565.4M, fractionally below analysts’ consensus. The company also issued a disappointing forecast, predicting revenue for the full year below what experts were targeting.

TDOC ended Thursday’s trading at $33.51, a decline of $22.32 on the day. Shares also set an intraday 52-week low of $28.75.

A surge in pandemic demand drove TDOC to an all-time high of $308 in February of 2021. Shares have trended lower since then, losing almost 90% of their value since that peak.

Notable New High

Suncor Energy (SU) received a lift from interest from an activist investor, spurring a 12% rise in the company’s shares. With the advance, the stock reached a fresh 52-week high.

The rally followed news that activist hedge fund Elliott Associates had built a 3.4% stake in the Canada-based company, which focuses on producing synthetic crude from oil sands.

Elliott issued a letter to SU, in which it criticized its “overly bureaucratic corporate culture” and called on the company to reassert “the dynamism that not long ago made Suncor (SU) the most valuable energy company in Canada.”

SU advanced $4.01 to close at $36.89. The stock finished just off the intraday 52-week high of $36.94 it set just before the finish.

Taking a longer view, SU has been trending higher since last summer, more than doubling since August.

Notable New Low

A rare disappointing earnings release sparked a sell-off in medical device maker Align Technology (ALGN). The stock plunged 15% on the session to reach a new 52-week low.

The company, which makes clear aligners for teeth, reported a Q1 profit that fell short of analysts’ estimates — its first earnings miss in the last seven quarters. ALGN said results were hurt by a host of macro issues, including the ongoing impact of COVID, the war in Ukraine, an uncertain economic environment, inflationary pressures and supply shortages.

Along with the earnings miss, the firm disappointed on the revenue front as well. The top line grew 9% from last year to reach $973.2M. However, the figure was down 6% from the previous quarter.

Hurt by the results, ALGN dropped to an intraday 52-week low of $270.37 early in the day. The stock moderated its losses through the afternoon but still ended at $304.66, a decline of $55.77 on the day.

Looking longer-term, ALGN has been falling since late 2021, coming off a 52-week high of $737.45. The stock has lost more than half its value over the past six months.

For more of the day’s biggest movers, head over to Seeking Alpha’s dynamic On The Move section.

Leave a Reply

Your email address will not be published.

Back to top button