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Several companies that trend on social media platform Reddit have seen a massive surge in stock prices. Usual suspects such as GameStop (NYSE: GME) and AMC (NYSE: AMC) have in fact gained by a monstrous 909% and 1,790% respectively year to date. But while most of these companies have weak financials and remain vulnerable due to their underlying volatility, is it possible to find a stock that is a good long-term bet?
Here, we take a look at three most popular Reddit stocks in SmileDirectClub (NASDAQ: SDC), Lucid Motors (NASDAQ: LCID) and BlackBerry (NYSE: BB) to see if they are viable investments today.
SmileDirectClub is down 68% from record highs
Shares of SmileDirectClub are down 68% from all-time highs. The oral-care company offers clear aligner therapy treatments for individuals. It manages the end-to-end process right from marketing, aligner manufacturing, fulfilment, doctor treatment and monitoring via a network of 250 state licensed orthodontists and general dentists.
It disappointed investors on the back of its Q2 results, as SDC reported a net loss of $55 million despite recognizing around $1,885 for every case it shipped. Its revenue growth stood at 63% year over year as SDC’s reported sales were $174 million. But investors were quick to notice that sales in Q2 experienced a sequential decline of $24 million and was lower than Q2 sales in 2019.
Analysts expect sales to rise by 15.6% year over year to $759.25 million in 2021 and by 20.4% to $914 million in 2022. However, it is expected to report a net loss of $0.68 per share in 2021 and $0.3 per share in 2022.
Lucid Motors
One of the top-performing companies in the electric vehicle space, Lucid Motors stock has more than doubled in 2021. Lucid Motors is yet to generate any sales but is expected to ship its first batch of EVs in the next few days. Its Lucid Air EV reportedly has a range of over 500 miles on a single charge which is the highest among its peers.
Further, the company also confirmed it has received over 10,000 pre-orders for its vehicles which will allow it to generate millions of dollars in sales going forward. In fact, the company expects to rake in $900 million in total sales from these orders.
Lucid Motors has allocated $350 million in capital expenditures between 2021 and 2023 which will be utilized to improve its manufacturing capabilities and invest in research and development.
The EV industry is all set to experience double-digit growth in the upcoming decade making
LCID stock a good bet for growth investors right now.
Blackberry
The final stock on my list is Canadian tech company BlackBerry. The former smartphone manufacturer pivoted its business model to provide enterprises with software and security-related solutions.
In the most recent quarter, Blackberry’s sales were down by 32% year over year at $175 million while adjusted net losses stood at $0.06 per share. Despite its top-line decline, BB stock gained momentum as it reported a narrower net loss compared to Wall Street estimates.
BlackBerry claimed its cyber-security business experienced strong growth compared to its sequential quarter as billings were higher compared to Q1. Further, its Internet of Things business also posted robust sales despite headwinds arising due to the shortage of semiconductor chips and supply chain disruptions.
BlackBerry is optimistic the ongoing enterprise shift towards cloud computing will continue to increase demand for its portfolio of services.
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