The S&P 500 Index has done well this year, rising by 12.2% since the year started, and is now hovering near its all-time high. This surge has been driven by industrials, technology, and energy sectors.
Still, some popular companies like The Trade Desk (NASDAQ:TTD), AppLovin (NASDAQ:APP) and Lululemon (NASDAQ:LULU) have plunged by 62%, 53%, and 52%, respectively, making them the top laggards this year.
The Trade Desk Stock Dived as Growth Decelerated
The Trade Desk, which was the best performing company in the S&P 500 Index in 2024, has become a fallen angel as its stock has plunged by 90% from its highest point on record. This sell-off gained momentum after it released weak earnings.
The results showed that its revenue rose by just 3% in the June quarter to $715 million. Worse, the management issued a weak forward guidance, with its third-quarter revenue coming in at $650 million. Altogether, analysts expect its annual revenue will drop by 3% this year to $2.74 billion, followed by $2.66 billion next year. In a statement, the CEO said:
"This quarter did not meet the standard we set for ourselves, but it has reinforced our belief that we are focused on the right opportunities for the future. We have a clear understanding of the factors that impacted our performance, and we are taking decisive action to strengthen our execution."
AppLovin Dropped Amid Growth and Valuation Concerns
AppLovin, another adtech company, has come under substantial pressure in the past few months. It has dropped by over 56% from its highest point last year, and is now hovering at its lowest level since May last year.
The most recent numbers showed that its business continues growing. Its revenue jumped by 53% in the quarter to $1.92 billion, with its net income jumping to $1.26 billion. While these numbers were good, they missed the management’s and analysts’ guidance. In his statement, Adam Foroughi, the CEO said:
"This quarter, we delivered almost $2 billion in revenue, which was just below the midpoint of our guidance range, and our Adjusted EBITDA was just below the range. We’ve always managed this business with the goal of outperforming our own expectations. And this quarter, we fell short of that standard."
In the aftermath, many analysts tracking the company lowered their guidance. Needham’s Bernie McTernan slashed his target from $500 to $475, while Piper Sandler’s James Callahan lowered from $385 to $325. Other analysts who slashed their targets are from Wells Fargo, Benchmark, BTIG, and Citigroup.
Lululemon Slipped as Growth Decelerated
Lululemon Athletica has become one of the most troubled companies in Wall Street, with its stock falling from a record high of $516 in December 2023 to $100. This sell-off continued last week after releasing its financial results.
Its results showed that its revenue dropped by 4% in the second quarter to $2.4 billion, with its Americas division slowing by 8%. Its international business grew by just 4%, a notable thing since it was its driving force in the past few months. Its profit also tumbled.
Focus now is on Heidi O’Neill, who becomes the CEO this week. The hope is on whether she will turn around the company.
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