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Which stocks are currently plummeting? 3 names to avoid.

InvestorPlace – Stock market news, stock advice and trading tips

The nature of the stock market is that at any given time there will always be stocks you don’t need to buy and others you should load up on as quickly as possible.

A good percentage of stocks follow a cyclical price pattern, meaning they are in sync with the performance of the broader economy.

However, the broader economy need not falter if all stocks perform poorly. Even companies with popular products or whose products are a hit with users can see their stock price suffer.

This could be due to declining demand, a shift in how customers prefer to acquire certain products, competition or shaky fundamentals such as mounting debt. Any of these factors can be responsible for lowering a stock’s value.

The companies below are examples of such stocks. They’re not exactly living up to their best potential – and it may be wise to avoid them as stocks for now.

EPAM systems (EPAM)

The Epam Systems logo can be seen on the side of an office building.

Source: Tricky_Shark / Shutterstock.com

EPAM systems (NYSE:EPAM) shares fell 27% on May 9 after sales were lower than expected and revenue expectations for this year were revised down.

The Newton, Pennsylvania-based IT services company announced that it now expects revenue to fall between $4.575 billion and $4.675 billion this year.

And while earnings beat analyst estimates, EPAM’s other measures, such as year-over-year (YOY) performance and GAAP and non-GAAP revenue, spooked investors and made EPAM the worst performing company in the world . S&P500. The company blamed the recession on a “challenging demand environment.”

EPAM shares started the year trading around $290, but have now fallen to $175 – down 44% year-to-date (YTD) and down more than 75% from the all-time high at the end 2021.

Despite the fact that EPAM stock has an Overweight consensus rating on MarketWatch, it’s telling that the 13 neutral or bearish analyst ratings outweigh the positive Buy and Overweight ratings.

In short, all signs point to EPAM being one of the stocks to avoid right now.

Paycom software (PAYC)

The Paychex Flex app can be viewed in the App Store on an iPhone

Source: Tada Images / Shutterstock.com

Paycom software (NYSE:PAYC) has fallen 22% since the earnings release on May 1 and 29% YTD. The company’s financials look relatively decent this quarter, but that is until you compare it to the same period over the past two years.

For example, first quarter sales increased 11% over the same period the year before, while 2023 and 2022 sales were up 28% and 30% respectively for the same period. This performance illustrates the company’s year-over-year revenues, which have been on a downward trajectory.

Ironically, Paycom’s problems stem from its star product, Beti. During last year’s fourth quarter report, CFO Craig Boelte revealed that many of its customers were focusing almost exclusively on the software, which had “eliminated certain billable items, which cannibalizes some of our services and unplanned revenue.”

On MarketWatch, Paycom has an average rating from analysts. For investors looking for dramatic near-term gains, Paycom may be a stock to avoid for now.

Roblox Corp (RBLX)

Roblox Stock IPO

Source: Miguel Lagoa / Shutterstock.com

The gaming company’s shares fell 21% in intraday trading after its May 9 Q1 report fell short of expectations. They then quickly recovered to the average levels of the previous weeks.

Yet shares have fallen more than 20% since the turn of the year. This shows that while investors are betting on it Roblox Corp (NYSE:RBLX), they are careful.

Several investment firms are also involved, including BTIG Research, which revised down RBLX’s price target from $54 to $46, and Wedbush, which lowered its price target on the stock from $56 to $46. Meanwhile, Goldman Sachs lowered its rating from $48 to $38 and gave it a neutral rating.

Compounding Roblox’s problems is the struggle to maintain or increase player engagement. The company now expects to do between $4 billion and $4.1 billion in bookings, up from its original forecast of $4.14 billion to $4.28 billion.

Roblox’s current challenges will in no way cripple the concept. But for investors for whom some things seem questionable, it’s okay to conclude that Roblox is one of the stocks to avoid this quarter.

On the date of publication, Hope Mutie had no positions (directly or indirectly) in the stocks mentioned in this article. The opinions expressed in this article are the author’s, subject to those of InvestorPlace.com Publication Guidelines.

Hope Mutie is a writer who is enthusiastic about finance and crypto. At InvestorPlace, she keeps her finger on the pulse of the stock and crypto markets to create insightful and information-rich content to help investors navigate the market with confidence.

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