The stock market has remained under pressure lately due to concerns over surging inflation and the Fed’s aggressive monetary policy tightening. Investors worry that the Federal Reserve’s aggressive interest rate increases to tame the multi-decade high inflation may trigger an economic slowdown.
Moreover, the continued Russia-Ukraine crisis, skyrocketing energy and commodity prices, and lingering supply chain disruptions are making investors pull money out of the stock market. The S&P 500 finished its worst first half in 52 years.
Given this backdrop, fundamentally weak stocks Athira Pharma, Inc. (ATHA) and Futu Holdings Limited (FUTU) could plunge further. Our proprietary POWR Ratings system has recently downgraded these stocks from Neutral to Sell. So, these stocks are best avoided now.
Athira Pharma, Inc. (ATHA)
ATHA is a late clinical-stage biopharmaceutical company that focuses on developing small molecules to restore neuronal health and slow neuron degradation. The company's lead product candidate is ATH-1017, a blood-brain barrier-penetrating, small molecule HGF/MET positive modulator.
ATHA’s operating loss increased 116.9% year-over-year to $23.39 million for the fiscal year ended December 31, 2022. The company’s net loss grew 136.6% year-over-year to $20.98 million in the quarter. Its loss per share for the quarter came in at $0.56, up 124% year-over-year.
Analysts expect ATHA’s EPS to decline 68.4% for the quarter ending June 30, 2022, and 78.5% in fiscal 2022. Moreover, analysts expect its EPS to remain negative in the current and next year. The stock has lost 76.6% year-to-date to close yesterday’s trading session at $3.05.
ATHA’s poor prospects are apparent in its POWR Ratings also. The stock has an overall rating of D, equating to a Sell in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
It has an F grade for Sentiment and a D grade for Growth, Momentum, Stability, and Quality. Click here to see the additional POWR Ratings for ATHA (Value). It is ranked #371 out of 398 stocks in the F-rated Biotech industry.
Futu Holdings Limited (FUTU)
Hong Kong-based FUTU operates an online brokerage and wealth management platform internationally. The company provides trading, clearing, and settlement services; margin financing and securities lending services; and a stock yield enhancement program.
FUTU’s revenue decreased 25.6% year-over-year to $209.50 million in the first quarter ended March 31, 2022. The company’s gross profit declined 19.8% year-over-year to $180.40 million, while its adjusted net income came in at $79.40 million, representing a 47.2% year-over-year decrease.
For fiscal 2022, analysts expect FUTU’s EPS and revenue to decrease 3.4% and 7.7% year-over-year to $2.35 and $839.30 million, respectively. The stock lost 70.9% over the past year to close yesterday’s trading session at $52.21.
FUTU’s POWR Ratings are consistent with this bleak outlook. The stock has an overall rating of D, equating to a Sell in our proprietary rating system. In addition, the stock has a D grade for Stability and Value.
Click here to see FUTU’s Momentum, Quality, Growth, and Sentiment ratings. In addition, FUTU is ranked #11 out of 12 stocks in the F-rated Financial Marketplaces industry.
ATHA shares were trading at $3.22 per share on Friday afternoon, up $0.17 (+5.57%). Year-to-date, ATHA has declined -75.29%, versus a -19.15% rise in the benchmark S&P 500 index during the same period.
About the Author: Nimesh Jaiswal
Nimesh Jaiswal's fervent interest in analyzing and interpreting financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving a stock’s price is the key approach that he follows while advising investors in his articles.
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