It's been a wild but successful year for most investors. The S&P 500 is trading 19% higher so far in 2021, through the end of last week. Not every stock has gone along for the ride this year, though, and you might be surprised at some of the big names that have been left behind.
Walmart (WMT 1.80%), Walt Disney (DIS 0.62%), Zillow (ZG 1.75%) (Z 1.88%) Roku (ROKU +2.43%), and Chewy (CHWY 2.98%) are some of the stocks trading lower year-to-date. Let's take a closer look to see why 2021 hasn't panned out for these popular stocks.
Image source: Getty Images.
1. Walmart
With the economy recovering nicely out of the pandemic, it's not a surprise to see shares of many retailers moving higher this year. But somehow, the largest chain of them all isn't playing along. Walmart stock is down only 0.7% in 2021, but lower nonetheless.
Walmart has mostly held up with its end of the bargain with investors. It has posted better-than-expected earnings in three of the past four quarters, and it has increased its guidance in back-to-back reports. One theory could be that shoppers are trading up from discounters, but that doesn't hold up here. Walmart's biggest rival -- cheap-chic retailer Target (TGT 1.73%) -- has seen its stock soar 37% in 2021.
To be fair, Walmart is no Target these days. Target's business is booming, with revenue climbing 18.5% over the past year. You have to go all the way back to fiscal 2007 to find the last time Walmart delivered double-digit annual sales growth. With Walmart's thin margins being tested as it increases wages and struggles to accelerate its growth, maybe there's a reason it's not just its merchandise prices that are low.
2. Walt Disney
The House of Mouse seems to be getting back on track this year. Its movies are succeeding at the multiplex again. Its theme parks segment is now profitable. By next month, Disney expects to have all four of its cruise ships back in the water.
The stock is still down 2.9% in 2021. The counter is that Disney shares rose better than 25% last year, when everything started falling apart. It had to close its theme parks, dock its cruise ships, and suspend theatrical distribution. Even its dividend went away last year, with no signs it will come back anytime soon. The stock still took off last year, largely on the strength of Disney+ in its strong rookie season. With subscriber growth slowing for the premium streaming service -- and with Disney+ accounting for less than 9% of the media giant's total revenue -- this year's irrational dip can simply be eating into last year's irrational surge.
3. Zillow
The real estate market is booming, but that doesn't mean the country's leading online portal for home seekers and sellers is on the rise. Zillow stock has shed more than 30% of its value in 2021. Other online real estate hubs and iBuyer specialists are also proving mortal.
Zillow began to fumble in the latter half of last year, when its Zillow Offers home-flipping business hit the brakes during the first few months of the pandemic. Real estate prices may be surging, but that also gives homeowners more reason not to settle for home flippers. Why cash out at a discount for a quick sale when so many properties are fetching more than their listing prices?
Zillow did bounce back in its latest quarter, sporting 70% growth for both its Zillow Offers segment and its flagship online portal. With 229 million monthly unique visitors, the platform has never been as popular as it is right now, but the same can't be said about Zillow stock.
4. Roku
Roku is another stock that you would expect to be winning in 2021, with all of the time we're spending streaming video content at home. However, the stock finds itself trading 3.1% lower so far in 2021.
Roku is also growing faster than of the other names on this list. Revenue growth is accelerating for the fifth year in a row. Roku's top line surged 79% and then 81% in its first two quarters of 2021. An analyst downgrade late last week didn't help, but Roku also warned last time out that supply chain constraints and increasing costs would weigh on its bottom line for the next couple of quarters. It also experienced a sequential dip in the billions of hours viewed by its users, but that should prove temporary. Active accounts and average revenue per user continue to grow at hearty double-digit clips. Roku is an attractively positioned leader among streaming service stocks.
5. Chewy
We adopted a lot of pets last year, but pet supply stocks have shockingly languished in 2021. Chewy stock is trading 22% lower so far this year. As with Roku, Chewy warned about supply chain constraints in its latest quarter.
At least five analysts slashed their price targets on Chewy after it fell short of expectations in its quarterly report earlier this month. The narrative here may also be that pet owners don't need to rely on online retailers now that local stores are open and accessible. The 27% in year-over-year sales growth in its latest report is its weakest showing in nearly two years. Chewy still has a strong foothold in pet supplies e-tail, and a loyal customer base that's spending more on the platform over time.
