Investors should always pay close attention to stocks with lowered price targets. Not only can that lowered target highlight potential danger, but it can also highlight a potential short opportunity to be well aware of.
Often, downgraded and downward price revisions are influenced by company fundamentals, including financial health and future growth. They can also indicate bearish trends in the industry, including earnings trends and financial data. Or, perhaps a firm is simply jumping on a bearish bandwagon with other firms. Or, maybe, the stock in question has become too hot, and even technically overbought.
You also want to make sure you’re not just following any firm when it comes to downgrades and price revisions. Make sure you follow the top firms, such as Needham, especially when a good deal of their long and short bets seem to be spot on. Here are three stocks with lowered price targets, as highlighted by Needham.
Coursera (COUR)
Over the last few days, Needham lowered its price target on education technology company Coursera (NYSE:COUR) to $15 from $23. All after Coursera’s first quarter earnings and full-year guidance failed to meet expectations.
With earnings, its first quarter earnings per share came in at 7 cents, which beat by 6 cents. Revenue of $169.1 million, which was up 14.5% year over year, missed by $1.4 million. In addition, its outlook wasn’t so hot.
The company expects revenue to come in between $162 million and $166 million, as compared to an estimate of $177.8 million. For full-year 2024, the company’s targeted revenue range is $695 million to $705 million. That’s also below expectations for $736.5 million.
Also, while COUR is embracing artificial intelligence, the company did warn that it is still “in the early stages of helping our learners, educators, and customers understand how emerging AI technologies will transform the way we teach, learn and work,” as quoted by Seeking Alpha.
Rivian Automotive (RIVN)
Needham also just cut its price target on Rivian Automotive (NASDAQ:RIVN) to $13 from $18.
According to the firm, the downward price revision was a result of a lower valuation multiple on its adjusted EBITDA forecast for 2028, as noted by Investorplace.com. The firm also believes RIVN could see pressure from slower electric vehicle adoption.
Needham also opposes the company’s decision to delay its Georgia plant, which will save it about $2.25 billion. While RIVN says it’s still committed to building that plant, it did not put forth any definitive restart dates.
Analysts at Barclays also lowered their price target on RIVN to $10 from $12. The firm noted that while its Georgia plant delay reduces pressure on capital raises, it will push out the timing of mass scale, they added, as noted by TheFly.com.
RIVN last traded at $10.33 a share, and is currently challenging a double-top from early April.
Everspin Technologies (MRAM)
Needham also cut its price target on Everspin Technologies (NASDAQ:MRAM) from $12 to $8, but kept a buy rating on the stock.
According to Investing.com, “Everspin Technologies reported strong sales figures, yet it fell short of its guidance expectations due to uncertainties with two significant licensing projects. These projects include a radiation-hardened memory development for the Department of Defense and a new initiative aimed at improving the reliability of Toggle MRAM technology.”
Analysts at Craig-Hallum also lowered their price target on MRAM to $11, with a buy rating. “The firm notes Everspin is starting to see the inventory burn across its Industrial/Auto markets, some of it related to China, driving its Q1 guidance easily below consensus, as feared,” as noted by TheFly.com. “However, Craig-Hallum thinks the effects of the burn will be short-lived.”
On the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
