Why Twitter, VistaPrint, and Noodles & Company Tumbled Today

A 45-point rise for the Dow wouldn't normally be all that big a cause for celebration, but the modest gain was enough to send the venerable market metric to a new all-time record high for the first time since the last day of 2013. Between solid earnings and the Fed's continued confidence in the economy, the broader market posted decent gains. But for Twitter (NYSE: TWTR  ) , VistaPrint (NASDAQ: VPRT  ) , and Noodles & Co. (NASDAQ: NDLS  ) , Wednesday was a day of woe, with the stocks falling sharply despite the market's overall positive mood.

Source: Twitter.

Twitter fell 9% after the social media company again disappointed investors with the pace of its growth during the first quarter. Sales more than doubled, but sequential growth in monthly active users came in at only 14 million, taking the company to the 255 million mark. Interestingly, though, that's actually a faster rate of growth than Twitter saw last quarter, when the microblogging site saw gains of just 11 million active monthly users. Still, with full-year revenue guidance tending toward the low end of what investors had expected, shareholders aren't convinced Twitter has the home-run potential they want to see, even though one key ad-revenue metric nearly doubled, accelerating from previous quarters' growth rates and suggesting monetization could improve at an increasing rate in the future.

VistaPrint plunged 26% after the business marketing services company missed revenue projections by almost 8% in its most recent quarter, sending earnings down 76%. Moreover, VistaPrint gave earnings guidance in a range that was at or below what investors expected to see for the year. With the company trying to discard its reputation as a bargain-basement provider of business cards and replace it with an emphasis on premium services of all kinds, VistaPrint has had to court a set of customers that it hasn't traditionally focused on as much, so a short-term drop in revenue and earnings makes sense. The question is whether VistaPrint can show substantial progress in future quarters in order to reassure investors that its strategic vision is viable in the long run.

Noodles & Co. dropped 14% as the fast-casual restaurant chain disappointed investors with subpar growth. Overall revenue grew 10%, but same-store sales fell by 1.6%, and Noodles cited weather problems as keeping customers away from its restaurant locations. Yet other competitors managed to post increases in comps despite the adverse weather, and even though Noodles has a concentrated presence in some of the hardest-hit areas of the country, the weak results called into question Noodles & Co.'s status as a cult classic among restaurant goers. Without a quick renewal of accelerating growth, Noodles will have trouble reassuring investors that its long-term story is still intact.

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Related Tickers

7/28/2014 4:00 PM
NDLS $28.61 Up +0.45 +1.60%
Noodles & Company CAPS Rating: **
TWTR $37.93 Down -0.23 -0.60%
Twitter CAPS Rating: **
VPRT $37.84 Down -1.17 -3.00%
Vistaprint CAPS Rating: **

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