The stock market is in a bit of a tailspin of late as investors worry about the future of the economy. It can be a great idea to buy stocks on weakness if you're investing for the long term, but that doesn't mean that every struggling stock is going to recover.
Three stocks that are down big this year but that investors should think twice about buying right now are SoundHound AI (SOUN +1.83%), Maravai LifeSciences (MRVI +7.19%), and Victoria's Secret (VSCO 2.78%). Here's why these stocks are struggling this year, and why they may not be worth buying despite their discounted valuations.
NASDAQ: SOUN
Key Data Points
SoundHound AI
Voice artificial intelligence (AI) company SoundHound went from being a hot stock in 2024 to now being in a freefall. Investors loaded up on the stock last year when they learned that chipmaker Nvidia had invested in the business. But now, with Nvidia selling its stake, investors are once again following in the tech giant's path and also unloading their shares of SoundHound.
SoundHound's stock is now down more than 55% since the start of the year. Arguably, some sort of a correction is warranted, given that it spiked a mammoth 836% last year. And there are still big question marks around its operations, such as whether SoundHound will be able to provide a competitive product amid a growing number of AI companies offering similar solutions.
The company is undeniably generating strong growth. Last year, its revenue soared 85% to $84.7 million. But that was also with the aid of acquisitions, and it posted an adjusted net loss of $69.1 million -- 19% higher than a year ago. SoundHound faces an uncertain path ahead, and while it is growing, whether it can do so organically is debatable. Investors shouldn't overlook its losses.
NASDAQ: MRVI
Key Data Points
Maravai LifeSciences
Another struggling stock is Maravai LifeSciences, which is also down around 55% this year. The healthcare company experienced a boom amid the pandemic as demand for its nucleic acid products soared, helping in the development of mRNA vaccines. But now, sales have been slowing down.
The company has postponed the release of its year-end earnings to next week, but the results have been far from impressive of late. Over the nine-month period ending Sept. 30, 2024, its revenue totaled $202.8 million and was down 6% year over year. Meanwhile, the company incurred an operating loss totaling $197.5 million -- including $154.2 million in goodwill impairment charges.
With an uncertain path forward and future profitability a big question mark, investors shouldn't assume the stock has reached a bottom. Things could get worse for Maravai as the year goes on.
NYSE: VSCO
Key Data Points
Victoria's Secret & Co.
Down 59% so far in 2025, Victoria's Secret is the worst-performing stock on this list. It has taken a beating after releasing disappointing earnings numbers and offering a discouraging outlook ahead.
The retailer is seeing some weakness in the market and projects that for the current fiscal year (which goes up until the end of January 2026), sales will be within a range of $6.2 billion to $6.3 billion. That suggests minimal to no growth compared to its most recent fiscal year, where it posted $6.2 billion in sales -- which were up less than 1% from the previous year.
Investors, however, should note that management says this forecast "assumes that the environment will gradually get better as we move through the year." That's a considerable assumption to make at a time when there's a lot of uncertainty in the economy. If economic conditions don't improve, investors shouldn't be surprised to see even lower sales numbers from Victoria's Secret, as the company still appears to be factoring a bit of optimism into its guidance.
Retail is a tough place to invest in these days. It's easier than ever for people to shift spending to other stores, including online marketplaces, in order to save money. Victoria's Secret stock is likely to continue to have a tough road ahead. Investors should tread carefully with it.
