Even as the company may be able to keep earnings steady from here, through efforts like downsizing, if growth fails to speed back up, it’s questionable whether ZM can shake off its continued “value trap” status. Although ZM stock appeared on the verge of a comeback in February, after reporting better-than-expected quarterly results, ZM has zoomed lower yet again, mainly due to the unexpected firing of the company’s President, Greg Tomb.Īs InvestorPlace’s William White wrote on March 3, one can speculate that this firing may have to do with Zoom’s growth, which continues to decelerate. This prediction has somewhat proved to be accurate. Despite it falling to what many may consider a reasonable valuation for a growth stock, I argued that worsening fundamentals would put more pressure on shares in the video conferencing technology provider. Last Nov., I called Zoom Video (NASDAQ: ZM) a value trap stock.
In other cases, this is because the market has yet to fully re-rate, in light of the reversal of pandemic-era trends that were highly favorable to the tech space. So, what are the top names in tech to sell? If you are still holding these seven tech stocks to sell, consider heading for the exits, pronto. In some cases, this is due to the high likelihood of poor operating performance lingering on for longer than expected.
However, while there may be a case to be made for buying back into FAANG components like Facebook parent Meta Platforms (NASDAQ: META), or even into more speculative tech growth stories with near-term catalysts, like SoFi Technologies (NASDAQ: SOFI), there are still plenty of hard-hit tech stocks that may be in for additional declines. With the tech sector selling off throughout 2022 and attempting to make a recovery this year, it may seem to some that now is the time to look for tech stocks to buy, rather than tech stocks to sell.
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