5 Reasons to Worry About Next Week: Exelixis, Inc. (EXEL) and More

Exelixis is a cancer-tackling biotech that has spent most of its publicly traded life in the red. It had a brief profitable run in late 2011, and now it has the misfortune of stacking its performance against that short-lived profitability.

Finally, we have Garmin stepping up. Several years ago Garmin was a market darling. Drivers couldn’t get enough of the company’s market-leading GPS products.

Two things have happened to weigh on Garmin’s chances. For starters, cars have evolved. Newer models have rich navigational tools that don’t require Garmin gadgetry. The second challenge has come from the booming popularity of smartphones. Android and iOS devices make it easy to navigate though cities and even avoid traffic.

Garmin is trying its best to move on. It has expanded its product line, making the most of wellness and outdoorsy trends to widen its offerings. It isn’t enough, naturally. Analysts see revenue and earnings slipping 8% and 23%, respectively.

Why the long face, short-seller?
These companies have seen better days. The market has rewarded many of these stocks with reasonable gains over the past year, but they still haven’t earned those upticks. Lower earnings translates into higher earnings multiples, and nobody wants to see that happen.

The good news here is that Wall Street already expects these companies to deliver shrinking bottom lines. In other words, the bad news is already baked into the shares.

The more I think about it, the less worried I become.

The article 5 Reasons to Worry About Next Week originally appeared on Fool.com and is written by Rick Aristotle Munarriz.

Longtime Fool contributor Rick Aristotle Munarriz has no position in any stocks mentioned. The Motley Fool recommends Exelixis. The Motley Fool owns shares of Exelixis.

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