Every week, Q.ai releases a “thematic screen” covering stocks that share commonalities – a common theme, if you will. But today’s thematic screen is a little…different. Instead of sharing our AI’s insights on top-rated consumer or momentum opportunities, we’re going to reveal which big-name growth stocks have earned a big, fat F.
Let the stock shaming begin.
Q.ai runs daily factor models to get the most up-to-date reading on stocks and ETFs. Our deep-learning algorithms use Artificial Intelligence (AI) technology to provide an in-depth, intelligence-based look at a company – so you don’t have to do the digging yourself.
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Advanced Micro Devices (AMD)
Advanced Micro Devices
Still, AMD’s last year proved quite fruitful on the balance sheet, as fiscal 2020 saw the company rake in a 17% increase in revenue to $9.76 billion. Operating income experienced 36.5% growth in the same period, ending the year at $1.37 billion – over 314.4% growth from $451 million three years ago. This overall rise in profits saw per-share earnings grow from $0.32 to $2.06 in the last three years for total growth of 644.3%.
All told, AMD’s ROE grew from 36.2% three years ago to 57.5% in the last fiscal year. Currently, the company is trading with a forward 12-month P/E of 35.71x and is expected to see revenue growth of 1.56% over the next year.
AMD’s stock prices may be declining now – but such downtrends provide the perfect opportunity for investors to hop on in anticipation of future gains. That said, Advanced Micro Devices is rated by our AI as A in Technicals, Low Volatility Momentum, and Quality Value, with a big, fat F in Growth.
Tesla, Inc (TSLA)
Tesla’s sudden decline after a year of accelerated growth is likely due to the company’s Bitcoin gambit, which seemingly has done the opposite of pay off. Whereas CEO Elon Musk just weeks ago claimed that consumers would be able to use Bitcoin to pay for Tesla’s products, now the company has backed down from that position, which played a part in Bitcoin’s most recent decline from almost $60k to just over $35k. No doubt this put a dent in Tesla’s Bitcoin holdings – not to mention their stock prices.
But Tesla’s 2020 numbers show the company in a much better light, with revenue up 14% to $31.5 billion and operating income growing 10.76% to $1.95 billion. This saw Tesla’s EPS balloon almost 56% in the last year to $0.64, though per-share earnings are still down from $1.14 three years ago.
And while the company itself is projected to experience 9% growth over the next 12 months, Tesla is trading at almost 114 times earnings, suggesting stock that is grossly overvalued for its current position.
Still, our AI sees Tesla as a potential holding for some portfolios – though its growth leaves much to be desired. All told, Tesla is rated A in Technicals, Low Volatility Momentum, and Quality Value, and F in Growth.
Lowe’s Companies, Inc (LOW)
Lowe’s Companies, Inc. closed down 0.5% Friday to $192.47 per share, ending the day $5 lower than the 10-day average with 4 million trades on the books. The home improvement retailer is up almost 20% YTD after a banner 2020 saw prices reach new all-time highs month for the bulk of the pandemic.
Last week held nothing but good news for Lowe’s’ balance sheet, as the company turned in Q1 earnings that beat Wall Street analysts across the board. Sales alone were up 24% as consumers continue to invest in their homes, with the momentum carrying forward into May.
Additionally, Lowe’s raised its sales forecast for the year, noting that it’s already ahead on its prior sales forecast of $86 billion for fiscal 2021. However, record-high prices and worries about labor shortages saw Lowe’s continue to close down – which may soon present an opportune buying opportunity for investors who missed the 2020 buy-in trough.
Lowe’s, the famous rival of Home Depot
These astronomical earnings have seen per-share earnings skyrocket nearly 223% in the last 36 months to $7.75 in the 2020 fiscal year. At the same time, ROE has leapt from 48.6% to over 342%. Currently, Lowe’s is trading with a forward 12-month P/E of 17.85x.
At the end of the day, Lowe’s proved in the last year that it has the potential to deliver solid performance for its shareholders – though all-time stock price highs leave little wiggle room for future expansion. As such, the home improvement company rates A in Technicals, Low Volatility Momentum, and Quality Value, and F in Growth.
Molson Coors Beverage Company (TAP)
Molson Coors Beverage Company ended Friday at $57.15 per share, trading up 1.17% for the day and 26.5% for the year. Although the famous beverage company has suffered in its stock chart since mid-2016, the pandemic gave the company a chance to rebound (after a significant loss, of course), bringing Coors to its highest stock price since 2019. And as the economy reopens one piece at a time, the summertime rush is expected to yield a fresh surge in product consumption.
However, Molson Coors did not experience such a great year on its balance sheet. While operating income grew 14.65% to $1.36 billion in the last fiscal year, it hasn’t yet recovered to its $1.46 billion operating income three years ago. At the same time, revenue slipped from $10.77 billion to $9.65 billion over the last 36 months, with EPS down from $5.15 to $4.38 in the same period.
But there is light at the end of the tunnel: Coors is expected to grow 2.3% over the next 12 months, and the company is currently trading with forward earnings of 13.75x.
All told, Molson Coors rates highly across (most of) the board, with an A in Technicals, Low Volatility Momentum, and Quality Value…and F in Growth.
Facebook, Inc (FB)
Facebook trended in the news last week as the company still struggles with its January ban of Donald Trump. While Facebook passed the buck to its oversight board to make a ruling, the oversight board kicked the buck right back, stating that it “declines Facebook’s request and insists that Facebook apply and justify a defined penalty.”
Additionally, Facebook announced early in the week that it plans to implement two new revenue streams. The first provides a method to monetize online high school and minor league sports games via a pay-per-view model. The second, “Live Shopping Fridays,” will allow Facebook users to purchase product from leading vanity brands.
But it’s not like Facebook needs new streams of revenue – anytime soon, at least. The company raked in a 9.8% increase in revenue last year and 69% in the last three, bringing total revenue from $55.8 billion to nearly $86 billion in a very short time frame. Additionally, operating income ballooned 53% in the last three fiscal years to $32.67 billion, while per-share earnings are up 54% in the same period to $10.09.
Despite all this expansion, Facebook is still expected to experience 3.7% revenue growth over the next 12 months. Currently, the social media giant is trading at forward 12-month earnings of 24.19x.
But while our AI rates Facebook mostly positively with A’s in Technicals, Low Volatility Momentum, and Quality Value, it, too, earns a big, fat F in Growth.
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