Brace for Impact: These 5 Overvalued Stocks Face Bearish Pressure In Impending Market Reversal
Benzinga – The U.S. stock market began on Tuesday (June 20) to show the first signs of a reversal from the impressive surge that began in early May as investors worry about the future path of monetary policy ahead of impending Federal Reserve Chair Jerome Powell’s testimony before the U.S. Congress.
A wave of negative performance hit all the main U.S. stock indexes and sectors on Tuesday, giving the market an overall gloomy feel.
The market alert was initially flagged by Benzinga last Friday (June 16), when it reported the relative strength index (RSI) for the S&P 500 Index had reached its most overbought level since November 2021, signaling that bullish momentum had likely peaked.
Based on their valuation metrics, such as the forward price-to-earnings ratio and the forward price-to-sales ratio, five overvalued stocks that are part of the holdings of the iShares Russell 1000 ETF (NYSE:IWB) have been identified as being particularly vulnerable to an uptick in bearish momentum if the current market decline intensifies.
5 Overvalued Stocks Poised For Bears’ Comeback
5) Cloudflare, Inc. (NYSE:NET)
- Cloudfare is a web infrastructure and security company providing a range of services to enhance website performance and protect against cyber threats.
- Forward price-to-earnings ratio (based on the next 12 months expected earnings): 191.7x
- Forward price-to-sales ratio (based on the next 12 months expected revenues): 16.3x
- Year-to-date performance: 44%
- Short interest: 6.34%
4) Upstart Holdings, Inc. (NASDAQ:UPST)
- Upstart is an innovative lending platform that utilizes artificial intelligence and machine learning algorithms to assess creditworthiness and offer personalized loans to individuals.
- Forward P/E Ratio: 211.4x
- Forward P/S Ratio: 4.5x
- Year-to-date performance: 147%
- Short interest: 29.7%
3) MongoDB, Inc. (NASDAQ:MDB)
- MongoDB, Inc. is a leading provider of modern, document-oriented database software, offering a flexible and scalable solution for managing structured and unstructured data in diverse applications and environments.
- Forward P/E Ratio: 256.3x
- Forward P/S Ratio: 16.5x
- Year-to-date performance: 89%
- Short interest: 5.07%
2) Snowflake, Inc. (NYSE:SNOW)
- Snowflake is a cloud-based data platform that enables organizations to store, manage and analyze vast amounts of data in a highly scalable and secure manner, helping businesses derive valuable insights and make data-driven decisions.
- Forward P/E Ratio: 292.4x
- Forward P/S Ratio: 19.6x
- Year-to-date performance: 21%
- Short interest: 4.4%
1) 10x Genomics, Inc. (NASDAQ:TXG)
- Description: 10x Genomics is a biotechnology company focused on developing advanced genomic tools and technologies to enable researchers to gain deeper insights into biology and accelerate discoveries in areas such as cancer research, immunology, and drug development.
- Forward P/E Ratio: 381.1x
- Forward P/S Ratio: 10.6x
- Year-to-date performance: 57%
- Short interest: 4.6%
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