Not every stock experienced a hot July. Some growth companies saw their shares take a step or two back last month. So opportunity is knocking if you know where to look.
Shares of Pinterest and Coinbase Global lowered last month. They are now trading between 35% and 47% under their 2021 highs. Let’s go over why I believe these are two stocks with good chances to getting back on track this month.
One of July’s biggest losers was Pinterest, losing over a quarter of its value back in July. The biggest decline came on the final day of trading for the month, as Pinterest’s stock went down 18% after it revealed disappointing financial numbers.
Revenue was well higher than expectations, but the market was hit by a 5% y/y decline and a 7% quarter-over-quarter lowering in U.S. users. Pinterest was an early winner during the lockdowns, as folks went to the image-centered social platform for recipes, home decoration tips, and other crafty ideas. It’s only logical for its customers to be distracted with real-world hobbies and responsibilities as we get past COVID-19. The 7% dip was something that even shocked bears.
The good news is that revenue is increasing because average revenue per customer in the U.S. has more than doubled over the previous year. With some unfortunate signals that we are not entirely over covid-19, we could see a one-two boost where Pinterest usage rises again with the company’s better monetization in place.
Coinbase Global held up much better in July than Pinterest did — down only 7% — but the company also shed almost half of its top IPO value after reaching the market previously this year. The top cryptocurrency exchange goes into August almost 45% under its April high.
Whether you believe digital currencies will go up or down in the next weeks or months, it’s a fair bet that volatility will be seen. Coinbase benefits from trading volume. Falling crypto prices will naturally harm overall demand, but this was a firm that started the year with an 845% surge in revenue on explosive profitability. Growth will decline, naturally, but Coinbase should keep appreciating at a headier clip than crypto prices are.
Author: Blake Ambrose
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