In this article, we discuss 10 innovative stocks in Cathie Wood’s portfolio that failed to impress.
Innovative stocks are companies that develop and harness new technologies, allowing for the revolutionization of work, catering to digital commerce, and working in the field of genomics, to name a few. Cathie Wood of ARK Investment Management is known for focusing her investments on disruptive innovation, and her hedge fund owns stocks from the information technology, healthcare, finance, consumer discretionary, and communications sectors.
The Florida-based ARK Investment Management has a 13F portfolio worth $33 billion as per the regulatory filings from Q4 2021, down from $41.6 billion in the prior quarter. Due to heavy market sell-off, ARK Innovation ETF slipped 30% for the year, as compared to a 9% decline for the S&P 500. Wood strongly believes that the losses suffered by her flagship funds are temporary at best, and investors cashing out at this time risk losing out on lucrative opportunities permanently. Cathie Wood is of the opinion that her fund will rebound in the next five years.
Cathie Wood has been the talk of the Wall Street, as investors continue to lose confidence in her portfolio, which has underperformed Invesco QQQ, the fund that tracks the Nasdaq 100, by 40% since the start of 2018. Some consider the ARK Innovation ETF to be riskier than Bitcoin. Apart from innovative stocks that failed to impress in Cathie Wood’s Q4 portfolio, some of the most notable holdings included Tesla, Inc. (NASDAQ:TSLA), Pfizer Inc. (NYSE:PFE), and JD.com, Inc. (NASDAQ:JD).
Our Methodology
We selected 10 innovative stocks from Cathie Wood’s Q4 portfolio that failed to impress, with stock prices declining by over 50% in the last six months. We have also mentioned the hedge fund sentiment around each stock, which was gauged from a total of 924 elite funds tracked by Insider Monkey in the fourth quarter of 2021.
Cathie Wood of ARK Investment Management
Innovative Stocks in Cathie Wood’s Portfolio That Failed to Impress
10. Pacific Biosciences of California, Inc. (NASDAQ:PACB)
Number of Hedge Fund Holders: 21
Decline in Share Price in the Last 6 Months: 60.29%
Pacific Biosciences of California, Inc. (NASDAQ:PACB) is an American biotechnology company that uses single-molecule real-time gene sequencing, with therapeutic focus areas including rare diseases, pharmacogenomics, neurogenomics, and immunogenomics.
In the last six months, Pacific Biosciences of California, Inc. (NASDAQ:PACB) stock declined 60.29%. Despite underperformance, Cathie Wood increased her stake in the company by 17% in Q4 2021, holding 26.3 million shares worth roughly $540 million. Pacific Biosciences of California, Inc. (NASDAQ:PACB) has featured on Cathie Wood’s portfolio consistently since Q3 2019, whereas her fund first purchased shares of the company in Q1 2018.
On February 15, Pacific Biosciences of California, Inc. (NASDAQ:PACB) reported its Q4 results, posting a loss per share of $0.30, missing estimates by $0.01. Revenue for the period came in at $36.02 million, exceeding market consensus by $19,000.
Canaccord analyst Kyle Mikson on February 16 lowered the price target on Pacific Biosciences of California, Inc. (NASDAQ:PACB) to $40 from $45 and kept a Buy rating on the shares. He believes the recent pull-back and any weakness related to the initial 2022 outlook presents a highly attractive buying opportunity in Pacific Biosciences of California, Inc. (NASDAQ:PACB) and recommends long-term investors accumulate shares at current levels.
Among the hedge funds tracked by Insider Monkey in Q4 2021, 21 funds were bullish on Pacific Biosciences of California, Inc. (NASDAQ:PACB), down from 27 funds in the prior quarter. SB Management owned a prominent stake in Pacific Biosciences of California, Inc. (NASDAQ:PACB), with 8.15 million shares worth $166.8 million.
Cathie Wood stands by her Pacific Biosciences of California, Inc. (NASDAQ:PACB) stake despite underperformance, in addition to owning significant positions in Tesla, Inc. (NASDAQ:TSLA), Pfizer Inc. (NYSE:PFE), and JD.com, Inc. (NASDAQ:JD).
Here is what DEVON Equity Management has to say about Pacific Biosciences of California, Inc. (NASDAQ:PACB) in its Q2 2021 investor letter:
“As a final word on Sequencing – we established a position in Pacific Biosciences (PACB US) during the quarter. PacBio is the leader in Long Read Sequencing (Illumina is dominant in Short Read). The Long Read market is far less developed than short read, but our continued research into the genomic sequencing field increased our confidence in the commercial viability for Long Read Sequencing in the coming years. We will discuss the investment case for PacBio in more detail in a future letter.”
9. Robinhood Markets, Inc. (NASDAQ:HOOD)
Number of Hedge Fund Holders: 24
Decline in Share Price in the Last 6 Months: 75.22%
Headquartered in Menlo Park, California, Robinhood Markets, Inc. (NASDAQ:HOOD) is a financial services company that offers a mobile application to users for trading stocks, exchange-traded funds, and cryptocurrencies.
Although Robinhood Markets, Inc. (NASDAQ:HOOD) declined 75.22% in the past six months, Cathie Wood loaded up on the stock in the fourth quarter of 2021. Wood’s ARK Investment Management elevated its position in the company by 142%, with 23.8 million shares worth $423.5 million.
On January 27, Robinhood Markets, Inc. (NASDAQ:HOOD) reported its fourth quarter results, posting a loss per share of $0.49, missing estimates by $0.19. Revenue over the period came in at $362.71 million, missing market consensus by approximately $15 million. Robinhood Markets (NASDAQ:HOOD) stock slid 11% in after-hours trading after the company said it expects Q1 2022 revenue will be less than $340 million versus consensus of $438.7 million.
Deutsche Bank analyst Brian Bedell raised the price target on Robinhood Markets (NASDAQ:HOOD) on February 18 to $14 from $12 and kept a Hold rating on the shares. The analyst issued a mid-Q1 outlook for the brokers and asset managers and continues to favor the “rate-sensitive stocks” for at least the next two quarters.
Joshua Kushner’s Thrive Capital is the biggest shareholder of Robinhood Markets, Inc. (NASDAQ:HOOD) as of Q4 2021, with 20.4 million shares worth $362.4 million. Overall, 24 hedge funds were bullish on the stock at the end of December 2021.
Here is what Claret Asset Management has to say about Robinhood Markets, Inc. (NASDAQ:HOOD) in its Q4 2021 investor letter:
“Robinhood went public at $38 a share at the end of July of this year. After a one day decline of 8%, it proceeded to rise to a peak of $85 in a matter of 4 days before settling down around $40 in September. Then, we found out that the company does not appear to understand the margin rules that apply to their client’s trades… and got fined by the Securities Exchange Commission. As of today, it is trading below $20, at 57 times earnings, approximately half of its IPO price. Caveat emptor… Buyer beware.”
8. CRISPR Therapeutics AG (NASDAQ:CRSP)
Number of Hedge Fund Holders: 34
Decline in Share Price in the Last 6 Months: 51%
CRISPR Therapeutics AG (NASDAQ:CRSP) is one of the innovative stocks held by ARK Investment Management that underperformed in the last six months, falling 51%. Cathie Wood boosted her stake in CRISPR Therapeutics AG (NASDAQ:CRSP) by 20% in Q4 2021, holding over 9 million shares worth $688.6 million. CRISPR Therapeutics AG (NASDAQ:CRSP) is an American biotech company using gene editing to develop pharmaceutical drugs.
CRISPR Therapeutics AG (NASDAQ:CRSP) posted on February 15 its Q4 results, announcing a loss per share of $1.84, behind market consensus estimates by $0.06. The $12.90 million revenue outperformed estimates by $10.64 million.
RBC Capital analyst Luca Issi on February 16 lowered the price target on CRISPR Therapeutics AG (NASDAQ:CRSP) to $95 from $117 and kept a Sector Perform rating on the shares. The analyst stated that while Q4 earnings were “uneventful”, he is lowering his price target to reflect the company’s higher R&D. He added that despite the material pullback in CRISPR Therapeutics AG (NASDAQ:CRSP) shares of 51% over the past six months and the stock’s “much more attractive valuation”, he remains on the sidelines, noting that other competitors are “better positioned” in oncology.
EcoR1 Capital held a prominent position in CRISPR Therapeutics AG (NASDAQ:CRSP) in Q4 2021, with over 1 million shares worth $81.6 million. Overall, 34 hedge funds were bullish on the stock in the fourth quarter of 2021.
7. StoneCo Ltd. (NASDAQ:STNE)
Number of Hedge Fund Holders: 35
Decline in Share Price in the Last 6 Months: 77.35%
StoneCo Ltd. (NASDAQ:STNE) is a company that provides cloud-based financial technology solutions to enable electronic commerce. Despite underperformance in the last six months, Cathie Wood increased her stake in StoneCo Ltd. (NASDAQ:STNE) by 53% in Q4 2021, holding 2.7 million shares worth $46.7 million.
On February 18, Evercore ISI analyst Sheriq Sumar assumed coverage of StoneCo Ltd. (NASDAQ:STNE) with an In Line rating and a price target of $14, down from $30. The analyst’s lower estimates and target price are due to rising rates in Brazil that will negatively pressure net margins. However, a secular tailwind of cash-to-card in Brazil is still strong and StoneCo Ltd. (NASDAQ:STNE) is positioned for continued share gains, the analyst added.
A total of 35 hedge funds in the fourth quarter database of Insider Monkey held long positions in StoneCo Ltd. (NASDAQ:STNE), down from 37 funds in the quarter earlier. Tybourne Capital Management held a significant stake in StoneCo Ltd. (NASDAQ:STNE), with 5.76 million shares worth $97.2 million.
In addition to Tesla, Inc. (NASDAQ:TSLA), Pfizer Inc. (NYSE:PFE), and JD.com, Inc. (NASDAQ:JD), StoneCo Ltd. (NASDAQ:STNE) is a top pick of Cathie Wood despite recent underperformance.
Here is what Nordstern Capital has to say about StoneCo Ltd. (NASDAQ:STNE) in its Q4 2021 investor letter:
“StoneCo Ltd (Stone) was a darling of the 2020 stock market, but in 2021 the stock price dropped more than 80% from $95.12 to $16.86 at year-end. Everybody (and their tax-loss selling mother) hated it. The Brazilian fintech Stone is stewarded by André Street, one of the youngest billionaire founders, and has earned the trust of long-term owners such as the Walton family and Warren Buffett. Its clients are primarily SMBs and I believe Stone has Brazil’s best boots-on-the-ground hyper-local hyper-energized sales force…” (Click here to see the full text)
6. Roku, Inc. (NASDAQ:ROKU)
Number of Hedge Fund Holders: 43
Decline in Share Price in the Last 6 Months: 60.34%
Roku, Inc. (NASDAQ:ROKU) is a California-based company that designs multiple digital media players for video streaming. Roku, Inc. (NASDAQ:ROKU) is also involved in the advertising business. The stock declined 60.34% over the last six months.
Featuring in ARK Investment Management’s portfolio since Q2 2019, the hedge fund boosted its position in Roku, Inc. (NASDAQ:ROKU) in Q4 2021 by 27.35%, holding more than 6 million shares valued at $1.3 billion. The stock represents 4.16% of Cathie Wood’s fourth quarter portfolio.
In its Q4 results, published on February 17, Roku, Inc. (NASDAQ:ROKU) reported earnings per share of $0.17, surpassing estimates by $0.13. The $865.33 million revenue jumped 33.15% year-on-year, missing market consensus by $28.47 million.
On February 22, Citi analyst Jason Bazinet lowered the price target on Roku, Inc. (NASDAQ:ROKU) to $250 from $275 and kept a Buy rating on the shares. The company reported a “broadly positive” Q4, but weaker guidance for Q1 and fiscal 2022 led to a negative reaction in the shares, Bazinet told investors in a research note.
Atreides Management is a prominent shareholder of Roku, Inc. (NASDAQ:ROKU), owning 539,765 shares worth over $123 million. Overall, the number of long hedge fund positions in Roku, Inc. (NASDAQ:ROKU) declined to 43 from 57 during October and December 2021.
Here is what Artisan Mid Cap Fund has to say about Roku, Inc. (NASDAQ:ROKU) in its Q4 2021 investor letter:
“Roku’s active account growth slowed for the fourth straight quarter after a very strong 2020. Consumers’ TV viewing patterns are normalizing post the most intense phase of the pandemic, and supply chain pressures among the company’s OEM partners have put upward pressure on TV prices and negatively impacted sales. One notable bright spot remains Roku’s solid progress in monetizing viewership as it attracts more advertising onto its platform. That said, viewership growth is a key input to Roku’s long-term growth outlook, and we continue to monitor the aforementioned headwinds to determine when growth will reaccelerate. Based on the likelihood that a meaningful portion of the $60bn-$70bn of traditional TV advertising market will migrate to connected TV platforms in the coming years, we have maintained our modestly sized position during this period of tempered viewership growth.”
5. Zoom Video Communications, Inc. (NASDAQ:ZM)
Number of Hedge Fund Holders: 48
Decline in Share Price in the Last 6 Months: 63.21%
Zoom Video Communications, Inc. (NASDAQ:ZM) is an American communications technology firm which has declined 63.21% in the last six months. Cathie Wood increased her stake in Zoom Video Communications, Inc. (NASDAQ:ZM) by 57% in Q4 2021 despite the stock sliding significantly, holding 6.8 million shares worth $1.2 billion.
The consensus EPS estimate for Zoom Video Communications, Inc. (NASDAQ:ZM) is $1.07, down 12.3% year-over-year, and the consensus revenue estimate is $1.05 billion, gaining 19% from the prior-year quarter, as per the earnings guidance posted on February 25.
On February 24, UBS analyst Karl Keirstead lowered the price target on Zoom Video Communications, Inc. (NASDAQ:ZM) to $130 from $250 and kept a Neutral rating on the shares ahead of its quarterly results. Despite the 35% year-to-date decline in the stock, the analyst recommends remaining on the sidelines given his concerns about U.S. market saturation, competition from Microsoft Teams, and price compression.
Tiger Global Management held a prominent stake in Zoom Video Communications, Inc. (NASDAQ:ZM) as of Q4 2021, with more than 6 million shares worth $1.12 billion. Overall, 48 hedge funds were bullish on Zoom Video Communications, Inc. (NASDAQ:ZM) in the fourth quarter of 2021, down from 56 funds in the quarter prior.
Here is what Artisan Partners has to say about Zoom Video Communications, Inc. (NASDAQ:ZM) in its Q1 2021 investor letter:
“We concluded our campaigns in Zoom Video Communications. We have been paring our position in Zoom for several quarters, anticipating the reduced need for video conferencing as vaccination rates climb and people return to their workplaces. That said, we believe there is a strong case to be made that the pandemic has prompted a permanent inflection in video conferencing’s importance—sustainably higher remote work arrangements, more online learning and less business travel. Furthermore, the company’s dramatically expanded user base (up 485% YoY in Q3) positions it well to cross sell additional services, Zoom Phone in particular. The long-term future remains bright, but we decided to end our successful investment campaign in favor of opportunities in our pipeline with more attractive near-term growth prospects.”
4. Shopify Inc. (NYSE:SHOP)
Number of Hedge Fund Holders: 86
Decline in Share Price in the Last 6 Months: 55.33%
Cathie Wood lowered her Shopify Inc. (NYSE:SHOP) stake by 23% in Q4 2021, and her hedge fund owned 715,230 shares of the company, worth over $985 million, representing 2.97% of the fund’s 13F portfolio. Shopify Inc. (NYSE:SHOP) is a Canadian multinational e-commerce company.
On February 16, Shopify Inc. (NYSE:SHOP)’s Q4 results were published, and the company posted earnings per share of $1.36, above consensus by $0.05. The $1.38 billion revenue jumped 41.14% year-on-year, surpassing estimates by $38.40 million.
DA Davidson analyst Tom Forte lowered the price target on Shopify Inc. (NYSE:SHOP) on February 17 to $800 from $1,400 and kept a Neutral rating on the shares as he resets his expectations for what success looks like for Shopify Inc. (NYSE:SHOP). The analyst also lowered his long-term adjusted EBITDA margin forecast to 30% from 45% on the expectation that spending for sales and marketing, R&D, and G&A will be higher than his previous forecasts, at maturity.
Among the hedge funds tracked by Insider Monkey, 86 hedge funds were bullish on Shopify Inc. (NYSE:SHOP) in Q4 2021, up from 73 funds in the preceding quarter. Stephen Mandel’s Lone Pine Capital held the biggest stake in Shopify Inc. (NYSE:SHOP), with 1.3 million shares worth $1.9 billion.
Here is what RiverPark Large Growth Fund has to say about Shopify Inc. (NYSE:SHOP) in its Q4 2021 investor letter:
“Shopify: SHOP shares were down modestly for 2H21, and we attribute the decline to the market environment rather than anything company specific, as Shopify’s fundamentals remain exceptional. The company reported $42 billion of merchandise sales, a 35% year-over-year increase, leading to 46% revenue growth to $1.1 billion for its 3Q. Subscription solutions revenue grew 37% year over year.
Last year, $120 billion (9%) of US retail e-commerce sales flowed through SHOP, which was second only to Amazon, and up from $61 billion for 2019. The company is still enjoying significant tailwinds as retail merchants of all sizes rapidly adopt SHOP’s software tools to display, manage and sell their products across a dozen different sales channels. We believe that the overall growth of e-commerce, combined with the development of new products and services at SHOP, will continue to drive revenue growth of about 50% per year over the next several years, accompanied by continued operating margin expansion.”
3. Block, Inc. (NYSE:SQ)
Number of Hedge Fund Holders: 96
Decline in Share Price in the Last 6 Months: 54.29%
Block, Inc. (NYSE:SQ) is a financial services and digital payments company based in San Francisco, California. Cathie Wood owned over 6 million Block, Inc. (NYSE:SQ) shares in Q4 2021, worth $997.70 million, representing 3.01% of her fund’s total 13F securities. Block, Inc. (NYSE:SQ) shares declined 54.29% in the last six months.
Needham analyst Mayank Tandon lowered the firm’s price target on Block to $175 from $315 to reflect lower valuations for high-growth payments stocks but kept a Buy rating on the shares after its “strong” Q4 results. The recent Afterpay acquisition should give Block, Inc. (NYSE:SQ) another lever to accelerate international expansion and integrate buy-now-pay-later products into both its Seller and Cash App ecosystems, the analyst told investors in a research note.
Among the hedge funds tracked by Insider Monkey in Q4 2021, 96 funds were bullish on Block, Inc. (NYSE:SQ), down from 98 funds in the prior quarter. Bares Capital Management is a significant stakeholder of the company, with 4.3 million shares worth $705.2 million.
Here is what RiverPark Large Growth Fund has to say about Block, Inc. (NYSE:SQ) in its Q4 2021 investor letter:
“Block (formerly Square): Block declined on mixed quarterly results, management commentary on slowing Cash App growth, and a delay in the closing of the AfterPay acquisition (Block announced the takeover of the global “buy now, pay later” platform in August). Still, SQ reported a strong quarter overall with gross profit growth at 43% year over year (due to passthrough costs, gross profit is more reflective of top-line growth), with gross profit from its Seller Ecosystem growing 48% to $606 million and from its Cash App growing 33% to $512 million. Still, some investors focused on the weaker-than-expected gross profit growth in the company’s Cash App division, creating pressure on the company’s shares. Importantly, Adjusted EBITDA beat expectations, growing 28% to $233 million.
Through one integrated system, SQ is a hybrid of two businesses: its Seller Business (charging small and medium-sized businesses about 3% for transaction payment processing, plus other services such as instant funds access, and software for everything from customer engagement to payroll), and its Cash App (originally for person-to-person cash transfers and now a growing digital financial services provider for consumers, representing half of first quarter’s gross profit). The combined business has grown gross profit at a 37% CAGR over the past five years to $2.7 billion for 2020, and we believe that the company has an enormous long-term runway, as it has less than a 2% share of a more than $160 billion market. It is our view that the company’s Cash App (which has grown from nothing in 2015 to $512 million gross profit last quarter) has a particularly large opportunity with its powerful ecosystem of digital financial services, including digital wallets, direct deposits, stock trading, bitcoin trading, and business and tax services, which are all relatively new. The vast majority of Cash App’s more than 36 million users are younger and, importantly, are willing to replace their bank and other financial services accounts with the app. We estimate that the company can grow its gross profit more than 30% and EBITDA more than 50% annually for the foreseeable future, and while half of the company’s current profit is from its Seller Business, we believe most of Block’s future value will come from its Cash App business.”
2. Sea Limited (NYSE:SE)
Number of Hedge Fund Holders: 108
Decline in Share Price in the Last 6 Months: 57.28%
Sea Limited (NYSE:SE) is a digital entertainment, e-commerce, digital payments, and financial services company. Sea Limited (NYSE:SE) shares slid 57.28% over the last six months, and Cathie Wood also trimmed her stake in the company by 32% in Q4 2021. Wood’s fund held 654,834 shares of Sea Limited (NYSE:SE), worth $146.4 million. The stock rebounded 15% on February 15 as Cathie Wood purchased shares.
On February 7, Barclays analyst Jiong Shao lowered the price target on Sea Limited (NYSE:SE) to $218 from $427 and kept an Overweight rating on the shares. The post-COVID economic reopening is having a negative impact on both the company’s gaming and e-commerce business as consumers reduce their digital presence, Shao told investors in a research note. The analyst believes Sea Limited (NYSE:SE)’s 2022 outlook may need to be reset.
According to the Q4 database of Insider Monkey, 108 hedge funds were long Sea Limited (NYSE:SE), down from 117 funds in the prior quarter. Kora Management is one of the leading shareholders of Sea Limited (NYSE:SE), with 3.4 million shares worth $779.40 million.
Here is what Hayden Capital has to say about Sea Limited (NYSE:SE) in its Q4 2021 investor letter:
“Sea Ltd represents a substantial portion of our portfolio, and this last market downturn has certainly been painful for shareholders. While I’d estimate (or rather guess?) that ~2/3rd of the stock price decline is due to concerns around the aforementioned rising rate environment hurting most long-duration growth companies, approximately ~1/3rd of the stock decline is likely due to investor’s concerns around Sea Ltd transitioning from “Act 1” to “Act 2”, which I’ll discuss in this section.
Previously, Sea has relied upon the exponential growth of its gaming business, Garena, and in particular that of the worldwide mobile game sensation, Free Fire, to provide the profits to reinvest into the Shopee ecommerce division within Southeast Asia. Between 2018 and 2021, profits from Garena grew over 10x, all of which was reinvested into building out the Shopee ecommerce platform.
This strategy has been tremendously successful, with Shopee now on track to achieve ~$100 Billion in GMV in 2022, making it one of the largest ecommerce companies in the world. More importantly, these new-to-ecommerce customers are extremely sticky (ordering more than 4x per month, logging in several times per day, and spending 30 – 60 minutes inside of the app per day).
This isn’t simply “renting customers” via deeply discounted promo codes. But rather, Shopee has trained a whole new segment of the population to shop online via their addictive & engaging platform. Nowadays, Shopee is definitively the dominant ecommerce leader in Southeast Asia (~55 – 60% market share), and the company feels that it is in a much more stable position compared to just a few years ago…” (Click here to see the full text)
1. PayPal Holdings, Inc. (NASDAQ:PYPL)
Number of Hedge Fund Holders: 110
Decline in Share Price in the Last 6 Months: 59.45%
PayPal Holdings, Inc. (NASDAQ:PYPL) is an American multinational financial technology company that facilitates online payments. Cathie Wood cut back on her PayPal Holdings, Inc. (NASDAQ:PYPL) stake in the fourth quarter of 2021, dumping 72% of the stock. She held 217,493 shares, worth $41 million in Q4.
On February 1, PayPal Holdings, Inc. (NASDAQ:PYPL)’s Q4 results were disclosed, and the company posted an EPS of $1.11, missing estimates by $0.01. Revenue over the period jumped 13.11% year-over-year to $6.92 billion, outperforming consensus by $30 million. PayPal Holdings, Inc. (NASDAQ:PYPL) stock slid 12% in after-hours trading following its Q1 guidance that trailed consensus estimates.
Bernstein analyst Harshita Rawat lowered the price target on PayPal Holdings, Inc. (NASDAQ:PYPL) on February 3 to $140 from $180 and kept a Market Perform rating on the shares. The analyst noted that PayPal Holdings, Inc. (NASDAQ:PYPL)’s Q4 was perhaps one of the most disappointing quarters he recalls for the company. The biggest negative surprise was an abrupt change in strategy to focus more on user engagement versus user growth to drive revenue growth, Rawat added.
According to the database of elite funds maintained by Insider Monkey in Q4 2021, 110 funds were bullish on PayPal Holdings, Inc. (NASDAQ:PYPL), down from 123 funds in the prior quarter. Fisher Asset Management owned the biggest stake in the company, with 14.4 million shares worth $2.72 billion.
Here is what Polen Focus Growth has to say about Paypal Holdings, Inc. (NASDAQ:PYPL) in its Q4 2021 investor letter:
“The top absolute detractors during the fourth quarter (includes) PayPal. PayPal was the most notable underperformer during the quarter and year. PayPal’s business continues to thrive, even on difficult comparisons with 2020. As the world’s largest digital wallet and fintech company, PayPal benefits from strong secular tailwinds from e-commerce and digital payments.
The negative share price reaction stemmed from two issues in our view. First, management modestly raised its 2021 revenue and earnings guidance early in the year, only to reduce it back to its original guidance. We have noticed that PayPal has tried to give overly precise guidance in the past and has had to recalibrate.
Overall, the company is growing well within our expectations and at what we believe to be a healthy rate. In addition, headwinds from its rapidly declining processed transactions from the eBay marketplace are not material to PayPal’s long-term success, in our view…” (Click here to see the full text)
You can also take a look at Billionaire Leon Cooperman Is Buying These 10 Stocks and 10 Best Stocks to Buy According to Warren Buffett.
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Disclosure: None. 10 Innovative Stocks in Cathie Wood’s Portfolio That Failed to Impress is originally published on Insider Monkey.
