The market’s relief rally in Nasdaq and S&P 500 erased losses incurred from September. The sentiment reversal from highly bearish and fearful to bullish happened too quickly. This risks hurting stocks that rose too quickly.
In the fintech sector, Block (SQ), a short-sell idea from Hindenberg in March, added $10 to nearly $50 last week. It practiced expense discipline to post better Q3 adjusted EBITDA. Block expects $2.4 billion in adjusted EBITDA in 2024.
Block’s $1 billion buyback is the catalyst that lifted the stock. Still, FOMO investors should not chase the post-earnings rally.
PayPal (PYPL) bounced from a $50.25 52-week low when it posted revenue of $7.4 billion, up by 8% Y/Y. The $1.3 billion operating cash flow is an achievement. In addition, the Q4/23 guidance of $1.20 EPS exceeds the 80 cents a share prior year result.
PayPal is profitable because it alleviates oversold conditions. The stock will not rise to pandemic-level hype prices. Watch out for profit-taking before considering this stock.
Pinterest (PINS) bounced from $24 to ~ $31 last week. It joins Alphabet and Meta Platforms in reporting strong advertising revenue. The firm is barely profitable, so be wary of buying the stock from here.
