The S&P 500 is off almost 9% for the year-to-date, but the biggest decliners in the main benchmark of U.S. equity performance are faring far, far worse.
From small, somewhat obscure members of the index to the planet's best-known and biggest stocks, the S&P 500's most beaten-down names do have at least a few commonalities.
For one thing, they're all well into bear-market territory, down at least 27% on a price basis for the year-to-date. Some of these stocks are suffering the flip side of having been among last year's biggest winners. Plenty of stocks that rallied as pandemic or COVID-19 recovery plays in 2021 have seen much of their gains evaporate this year.
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Additionally, inflation, interest-rate anxiety and geopolitical tension have been particularly hard on pricey growth stocks in 2022. This tense background and an abrupt shift in sentiment made for an unusually punishing earnings season. Woe to any company that missed Wall Street estimates – or worse – issued downbeat guidance.
Those are just some of the factors driving the price declines of the S&P 500's biggest losers this year, which we list in the table below. But first, let's take a quick look at some of the more notable entries.
- Shares in Facebook parent Meta Platforms (FB, $207.71) lost more than 38% for the year-to-date through Feb. 17 after posting a disastrous fourth-quarter report. We learned that changes to Apple's (AAPL) iOS privacy settings clobbered FB's core advertising business. Meta users are fleeing its platforms for the likes of TikTok and other rivals. Making matters worse, the company issued a dismal outlook. And it's plowing billions of dollars into the metaverse – a perhaps decade-long project with no guarantee of a payoff. FB has shed $356 billion in market value in 2022, dealing a big blow to the market-cap-weighted S&P 500.
- PayPal Holdings (PYPL, $105.20) was the S&P 500's biggest loser through Feb. 17, declining more than 44%. Quarterly earnings that missed Wall Street's consensus estimate hurt, but more damaging was its shortfall in user growth. Worst of all, however, was PYPL's scaled-back revenue and profit forecasts. High-priced growth stocks stand no chance in this market when they can't deliver on expectations, both past and future. A series of analyst downgrades and price-target cuts only added to the selling pressure. "It will likely take several quarters of better results to restore investor confidence," says Argus Research analyst Stephen Biggar, who recently lowered his 2022 profit estimate and price target but maintained a Buy rating on shares.
- Moderna (MRNA, $146.36) was one of the S&P 500's best stocks in 2021, gaining 140%. But the higher they fly, the harder they fall. Shares are off more than 40% year-to-date as investors weigh the company's fortunes on the other side of the pandemic. UBS Global Research initiated coverage of MRNA at Neutral (the equivalent of Hold) in late January, citing the potential of its drugs under development. "We think MRNA's platform has significant applications beyond COVID-19, but that current levels reflect this potential based on the science to date," analyst Eliana Merle says in a note to clients. "In the near-term, we think COVID-19 remains the key focus and a source of near-term volatility for shares."
Have a look at the table below for the 10 worst stocks of the S&P 500 for the year-to-date through Feb. 17:
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