Stocks such as Twitter Inc (NYSE:TWTR), 3D Systems Corporation (NYSE:DDD) and Groupon Inc (NASDAQ:GRPN) have plummeted in the last few months from their momentum-fueled highs. Some fell because their earnings missed expectations, while others attributed their decline to short-selling. It has left many investors concerned. Twitter is undoubtedly the most publicized stock that has tumbled this year.
The decline in Twitter a good buying opportunity?
Twitter Inc (NYSE:TWTR) shares have declined about 50% this year, eliminating more than $17 billion from its market value. Revenues of the microblogging company continue to grow strongly. But its problem lies in user growth, which is slowing. For Q1, Twitter posted a revenue of $250.49 million as ad revenues soared 125% YoY to $226 million. Mobile advertising accounted for 80% of its total ad revenue.
Many analysts believe that concerns around Twitter Inc (NYSE:TWTR) are overblown. They think the recent decline is a good buying opportunity. Morgan Stanley upgraded the stock to Equal weight rating on May 7. Pivotal Research Group upgraded Twitter from Sell to Hold, though it maintained the price target of $34. Meanwhile, SunTrust analyst Robert Peck upgraded the stock from Neutral to Buy in a research note dated May 13. The microblogging company has introduced many new features and improved its platform to attract more users.
Can 3D Systems tackle the integration challenges?
3D Systems Corporation (NYSE:DDD) has been hurt by two factors. One, the entire 3D printing industry has come under pressure since the beginning of this year. Many fear that 3D printing technology may be a speculative play which may not work out as well as investors expect, reports Shazir Mucklai of The Street. 3D Systems’ rival Stratasys, Ltd. (NASDAQ:SSYS) has also seen its stock plummet 29% this year so far.
Two, the Rock Hill-based company has purchased dozens of companies in the past few months. Some research firms like JPMorgan have been cautious as the company tackles the challenges of successfully integrating all those acquisitions into a coherent platform. If the company succeeds in integrating its purchases, the stock may go up, especially as its PEG ratio of 1.2 already reflects the potential for growth.
Groupon’s turnaround lacks confidence
Groupon Inc (NASDAQ:GRPN) has been extremely volatile. The stock is down nearly 47% year-to-date. Earlier this month, the company reported 26% increase in first quarter revenues, beating the consensus estimates. Groupon reported a loss of 1 cent on revenues of $757.6 million. Analysts polled by Bloomberg were expecting 3 cents in losses on revenues of $738 million. Mucklai says that Groupon’s solid Q1 growth may entice investors with strong stomachs. However, its turnaround plan clearly lacks confidence. Morgan Stanley says that the market Groupon is trying to break into doesn’t verifiably exist.