Cathie Wood wasn't buying a lot of stocks earlier this month, but she's been picking up the pace lately. The co-founder, CEO, and principal stock picker of Ark Invest publishes her daily transactions. We know what Ark Invest bought -- and what it sold -- on Thursday.
Roblox (RBLX 3.83%), Coinbase (COIN 4.68%), and Teladoc (TDOC 3.31%) are three of the existing Ark Invest positions that Wood added to yesterday. Let's take a closer look.
1. Roblox
It was easy to wonder if Roblox's popularity was peaking earlier this year. The open-ended online hub saw its daily active users of young online gamers and social explorers drop from 54.1 million at the end of the first quarter to just 52.2 million three months later. Bookings dipped sequentially in back-to-back quarters, and the stock chart shows that it wasn't just users kissing Roblox goodbye. The shares have plummeted 74% this year.
Image source: Getty Images.
There was hope that players in the virtual space were returning during the summer, with average daily active users bouncing back to 58.8 million for the third quarter, a 24% surge over the past year. It wasn't a perfect report. The typical user was spending less time on the platform. Average bookings per daily active user declined 11%. It was still refreshing to see audiences growing again, but the trend has reversed itself through the first two months of the fourth quarter.
Roblox shares tumbled last week after reporting its November metrics. We're now down to 56.7 million daily active users. Year-over-year engagement and bookings per daily active user keep contracting.
When Roblox went public early last year the challenge was its ability to handle the platform's meteoric growth and monetize its audience of teens and preteens. Now the fear is that the once-thriving platform has gone stale. Wood naturally believes the stock will bounce back.
2. Coinbase
A lot has changed at Coinbase since its IPO last year, and the transformation isn't flattering. Investors were smitten with Coinbase for its surprisingly reasonable valuation shortly after hitting the market. Margins were solid and the leading crypto trading exchange was trading a surprisingly low earnings multiple.
Bulls probably didn't dwell on the fact that it was a perfect storm of a crypto feeding frenzy and one-time gains that inflated the profitability at Coinbase. Everything would turn the moment that digital currencies began to slide, taking down weaker rivals in the process.
There is no earnings multiple on Coinbase now. It's in the red, and analysts see annual losses continuing through at least the next four years. Revenue this year will be less than half of what it generated a year earlier.
The news isn't all bad for Coinbase. Its conservative approach makes it unlikely that it will suffer the same fate of failed crypto hubs that put speculation above protecting client assets. There are also fewer cryptocurrency stocks competing for attention. Will fortune favor the brave?
The rebirth won't come easy. Coinbase is at the mercy of the crypto market to recover. The scars that the traders have experienced this year are deep and won't be forgotten anytime soon.
3. Teladoc
Teladoc hasn't exactly been the picture of health since peaking in early 2021. The stock has surrendered more than 90% of its value, and Wall Street pros don't seem to be warming up to the telehealth leader as a turnaround opportunity. Whenever an analyst offers an update, it's usually accompanied by lowering the firm's price target on the cascading shares.
Daniel Grosslight at Citi became the latest to chime in, slashing his price target on the stock from $36 to $33 last week. He's concerned about the headwinds that Teladoc is facing in its BetterHelp and chronic care businesses. He sees slowing growth next year.
Slowing top-line gains are better than no gains at all. Revenue rose 17% in its most recent report, but losses continue to be problematic. Its guidance calls for more red ink this quarter. The upside is huge if it's able to turn sentiment around. The stock would have to be nearly a 13-bagger to return to its former highs.
