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Why Uber Technologies, Twilio, and Etsy Slumped Today

By Dan Caplinger - Oct 31, 2019 at 4:35PM

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Find out why earnings and other factors hurt these companies.

Thursday was a tough day for Wall Street, as market participants had to bring the contentious trade issue back into their collective consciousness. After a couple of weeks of encouraging developments on trade relations, word that Chinese officials might be losing confidence in reaching a long-term deal weighed on investor sentiment. Moreover, bad news sent some stocks sharply lower. Uber Technologies (UBER -1.92%), Twilio (TWLO -2.95%), and Etsy (ETSY -1.88%) were among the worst performers. Here's why they did so poorly.

Uber hits the brakes

Shares of Uber Technologies dropped 7%, moving in the opposite direction of its biggest rival in the ride-hailing business. Lyft came out with solid third-quarter performance, including a 63% jump in revenue and a narrowing of adjusted net losses by more than half over the course of the past 12 months. Uber won't announced its results until next week, but some negative reports about how the company handled sensitive consumer data and the decision it made to change its mind about a planned investment in Colombia seemed to produce uncertainty among shareholders about its long-term strategic vision and likelihood of success. With the decline, Uber sank even further below its IPO price, raising additional concerns.

Gray car on a street with Uber markings and autonomous driving equipment on top.

Image source: Uber.

Twilio can't make the grade

Twilio saw its stock sink 10% following the release of its third-quarter financial results. The cloud communications platform provider said that sales jumped 75% from year-ago levels, with adjusted net losses falling by more than half over the same period. Yet much of that increase stemmed from the recent acquisition of email specialist SendGrid, and sequential revenue gains of just 7% compared to three months ago led some investors to fear slowing growth rates going forward. It's inevitable that Twilio will start to see erosion in the pace of its sales gains eventually, but shareholders seem more concerned than is warranted right now based on its performance.

Etsy stumbles

Finally, shares of Etsy fell 16%. The creative products marketplace provider reported solid growth for its business, including a 32% rise in revenue during the third quarter compared to year-ago levels and a 24% increase in adjusted pre-tax operating earnings. However, gross margin numbers narrowed from the prior-year period, and reported net income sank about 25%. As with most companies in the business of selling things, Etsy will face a pivotal test during the holiday quarter, and shareholders simply don't seem to be as confident in their assessment of the company going forward as they've been throughout most of 2019.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Etsy and Twilio. The Motley Fool recommends Uber Technologies. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Etsy, Inc. Stock Quote
Etsy, Inc.
ETSY
$114.71 (-1.88%) $-2.20
Uber Technologies, Inc. Stock Quote
Uber Technologies, Inc.
UBER
$30.13 (-1.92%) $0.59
Twilio Inc. Stock Quote
Twilio Inc.
TWLO
$78.99 (-2.95%) $-2.40

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