Kalkine Media evaluates five growth stocks amid a bearish market trend

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Kalkine Media evaluates five growth stocks amid a bearish market trend

 Kalkine Media evaluates five growth stocks amid a bearish market trend
Image source: © Sasinparaksa | Megapixl.com

Highlights:

  • Starbucks Corporation (NASDAQ: SBUX) stock jumped over 20 per cent QTD.
  • Alphabet Inc. (NASDAQ: GOOGL) touched its 52-week low on September 16.
  • Apple Inc. (NASDAQ: AAPL) noted a two per cent YoY growth in its latest quarter revenue.

The growth stocks tend to move higher during economic growth when the interest rates stay at lower levels. The growth stocks segment witnessed notable growth since the financial crisis in 2008 and was one of the investors' favourite segments besides the value stocks.

To name a few, Starbucks Corporation (NASDAQ: SBUX), Alphabet Inc. (NASDAQ: GOOGL), Apple Inc. (NASDAQ: AAPL), T-Mobile US, Inc. (NASDAQ: TMUS), and Block, Inc. (NYSE: SQ), fall under this category.

However, the recent volatility due to the macroeconomic headwinds in the market dragged down the US indices this year. The soaring interest rates, inflationary pressures, and other uncertainties have forced investors to shift their focus to value stocks from growth stocks.

The shift in the focus has resulted in a massive sell-off among the growth stocks, allowing investors to explore the stocks at a lower price.

Although a topsy-turvy investing environment still hovers over the market, some investors are still taking chances due to the lower prices of these assets.

Let's look with Kalkine Media® the recent stock performance and other key developments of these growth stocks:

Starbucks Corporation (NASDAQ: SBUX)

Starbucks Corporation is a leading coffee house company with a dividend yield of 2.15 per cent. The coffeehouse chain operator had a P/E ratio of 25.93. While the company's stock has witnessed choppy trading so far in 2022 and on an annual basis, it could offset some of the losses in the running quarter.

The SBUX stock rose over 20 per cent QTD through September 19 while slipping more than 21 per cent YTD and about 18 per cent YoY. It traded about 34 per cent up from its 52-week low of US$ 68.39 noted on May 12 this year.

The US$ 105.34 billion market cap company said on September 13 that it expects its comparable store sales in the US as well as globally to grow between seven per cent and nine per cent annually from fiscal 2023 to fiscal 2025, up from its prior guidance range of four per cent to five per cent.

In addition, it now expects its global revenue to grow in the range of ten per cent to 12 per cent annually from fiscal 2023 to fiscal 2025, an increase from its earlier guidance of eight per cent to ten per cent.

In the third quarter of fiscal 2022, Starbucks' revenue soared nine per cent YoY to US$ 8.2 billion, from a revenue of US$ 7.49 billion in the year-ago quarter. The net earnings of the Seattle, Washington-based coffeehouse chain operator was US$ 912.9 million in Q3 FY22, a decrease of 20.9 per cent from US$ 1.15 billion in Q3 FY21.

Alphabet Inc. (NASDAQ: GOOGL)

Alphabet is one of the leading technology conglomerate firms with a market cap of over US$ 1.32 trillion. It is the parent company of the renowned search engine Google, and the company holds a P/E ratio of 18.92.

Like most other technology stocks, Alphabet also came under immense pressure this year, as evidenced by its price slumping. The GOOGL stock fell more than 29 per cent YTD while dropping over 27 per cent YoY. In the third quarter, it lost about six per so far.

The GOOGL stock had a Relative Strength Index (RSI) of 33, as shown by Refinitiv, which suggests a highly volatile state of the stock. In addition to that, the stock also witnessed price fluctuations in recent months.

The stock of the technology conglomerate firm touched its 52-week high of US$ 151.546575 on February 2 this year while touching the bottom price of US$ 100.94, in the same period, on September 16, 2022.

Alphabet Inc. reported a net income of US$ 16 billion on revenue of US$ 69.68 billion in the second quarter of fiscal 2022. The Mountain View, California-based company's revenue grew by 13 per cent YoY in the quarter, while its net income in Q2 FY21 was US$ 18.52 billion.

Apple Inc. (AAPL) Q3 FY22 VS Q3 FY21 earnings highlightsSource: ©Kalkine Media®; © Canva via Canva.com

Apple Inc. (NASDAQ: AAPL)

Apple is one of the leading technology companies by market cap, which holds a dividend yield of 0.61 per cent. The US$ 2.63 trillion market cap company engages in several operations like consumer electronics, software, etc.

The technology giant's stock was no exception this year and suffered amid several macroeconomic headwinds. The AAPL stock fell 14 per cent YTD while climbing over four per cent YoY and 11 per cent QTD. As per Refinitiv data, Apple's RSI was around 41 on September 19, 2022.

Apple's revenue jumped two per cent YoY to US$ 83 billion in Q3 FY22, from US$ 81.43 billion in the year-ago quarter. The net income of the iPhone maker was US$ 19.44 billion in the latest quarter, down from US$ 21.74 billion in Q3 FY21.

T-Mobile US, Inc. (NASDAQ: TMUS)

T-Mobile US is one of the major communications firms with a market cap of US$ 175.13 billion. The wireless network operator holds a P/E ratio of 101.9. Its RSI was around 43, Refinitiv data showed as of September 19, 2022.

The TMUS stock shot up more than 20 per cent YTD while adding over three per cent QTD and nine per cent YoY. The stock of the communication firm hit its 52-week high of US$ 148.04 on August 26 this year.

The total service revenue of T-Mobile US Inc jumped six per cent YoY to US$ 15.3 billion in Q2 FY22. The net loss of the wireless network operator totalled US$ 108 million in the fiscal 2022 second quarter, compared to an income of US$ 978 million in Q2 FY21.

Block, Inc. (NYSE: SQ)

Block Inc., formerly Square Inc., is a payment technology company with a market cap of US$ 37.58 billion. The SQ stock lost over 60 per cent YTD while falling about 75 per cent in the last 12 months. However, on a QTD basis, it stayed about four per cent up.

The payment technology company reported a revenue of US$ 4.40 billion in Q2 FY22, down from US$ 4.68 billion in the year-ago quarter. Its transaction-related revenue was US$ 1.47 billion in the latest quarter, up from US$ 1.22 billion in Q2 FY21.

Meanwhile, Block Inc.'s net loss available to shareholders was US$ 208.01 million in the fiscal 2022 second quarter, versus an income of US$ 204.02 million in Q2 FY21.

Bottom line:

The year 2022 marked a rough period for investors due to the higher interest rates, decades-high inflation, and geopolitical turmoil. The US indices marked their worst weekly performance last week in the last two months.

The S&P 500 index traded more than 18 per cent lower this year, while in September, it lost more than two per cent through last Friday. However, it added about two per cent in the running quarter, thanks to the summer rally at the start of the quarter.

On the other hand, the tech-savvy Nasdaq Composite Index plunged nearly 27 per cent YTD through last Friday while dropping more than three per cent this month. On a QTD basis, it jumped nearly four per cent through September 16.

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