Key points
- Attention is starting to shift to stocks in extremely oversold territory, diverging from their industry counterparts.
- Some of the most oversold stocks attracting attention include SNOW, TSLA, SIRI, BA and DLTR.
- Notably, their Relative Strength Index (RSI) readings indicate deeply oversold levels, potentially signaling a turning point for these stocks.
- 5 stocks we like better than Snowflake
As the market focuses on top-tier tech names, like Nvidia and Microsoft, some investors may be shifting their attention to a different type of stock. Several large-cap companies have diverged from the overall market and the growth trajectories of their industry counterparts and instead find themselves in extremely oversold territory.
Enter NEVE, TSLA, SIRI, BA and DLTR. Despite the recent spotlight on the technology sector and a rising overall market, these stocks have attracted investor attention for several reasons: Their significant declines.
So, let’s analyze each of these stocks to see if these companies represent attractive buying opportunities in the current oversold conditions or if further downside pressure awaits.
Since the latest earnings release, shares have fallen and have been trading lower, with year-to-date losses approaching 20%. The cloud-based data storage, computing and analytics company reported $0.44 earnings per share for the quarter, beating analysts’ consensus estimates of $0.49 by $0.05. The company posted revenue of $774.70 million for the quarter, compared to analysts’ expectations of $759.86 million.
Considering the recent overwhelming sell-off in the previous weeks, the RSI is currently at 26.80, reflecting highly oversold conditions in the short term. Analysts expect significant upside for the stock, with a Moderate Buy rating and a price target indicating nearly 30% upside.
Similarly, Dollar Tree fell following the release of its latest quarterly earnings on March 13, 2024. Despite reporting earnings per share (EPS) of $2.55 for the quarter, slightly below the consensus estimate of $2.67 of $0.12, the company reported robust revenue of $8.63. billion, demonstrating an increase of 11.9% year-over-year.
DLTR’s RSI is currently at 28.35, making it highly oversold. Analysts maintain a Moderate Buy rating, with expected earnings growth of 17.30% next year and a price target suggesting upside potential of nearly 20%.
Tesla, the worst performing member of the magnificent seven years from now, has seen its shares fall more than 30%. Despite reporting earnings per share of $0.71 for the quarter, below estimates of $0.04, the company achieved a 3.5% increase in quarterly revenue over the prior year.
Tesla’s RSI is currently at 27.99, signaling severely oversold conditions. Its year-to-date decline of nearly 35% solidifies its position as the worst performer in the S&P 500. But with its forward P/E now below 40 and its stock fast approaching potential support near $150, a relief bounce and price stabilization may soon be in sight.
Boeing, behind Tesla as the second-worst performer in the S&P 500 Index, faces significant challenges as its RSI stands at 24, indicating severely oversold conditions. With a year-to-date decline of nearly 30% and a recent decline of more than 10% in the past month, the aerospace giant faces a barrage of negative catalysts, ranging from mechanical issues to production setbacks. Amid this turbulence, analysts maintain a Moderate Buy rating on the stock, predicting an impressive upside of nearly 40% to consensus price targets. Despite the current storm of negative headlines, optimism remains constant regarding Boeing’s long-term prospects.
Sirius XM Holdings has been in a strong downtrend characterized by predominantly bearish sentiment. The stock has an RSI of 21.93, signaling deep oversold conditions. In its recent earnings report dated February 1, 2024, Sirius beat expectations with earnings per share of $0.09, beating estimates by $0.02. However, revenue for the quarter slightly missed the mark, totaling $2.29 billion versus the consensus estimate of $2.30 billion. Additionally, Sirius XM faces significant pressure from short sellers, with 24.43% of its float sold short as of February 29.
Before you consider Snowflake, you’ll want to hear it.
MarketBeat tracks Wall Street’s highest-rated and best-performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market takes hold… and Snowflake wasn’t on the list.
While Snowflake currently has a “Moderate Buy” rating among analysts, top-rated analysts believe these five stocks are better buys.
View the five stocks here
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