In this article, we’re looking at the biggest stock movements on August 26, 2019. The Dow Jones Industrial Average is up 1.0% while the S&P 500 gained around 1.1% today.
Roku stock rose today
Shares of Roku (ROKU) continued to rise today. The stock gained 3.8% and is currently trading at $142.81. Roku stock has gained a staggering 366% in 2019 and easily crushed market returns. It’s trading at an all-time high and valued at $16.6 billion, which is 15x its 2019 sales.
Analysts are cautious about Roku right now. Wall Street has an average 12-month target price of $117.5 for the stock, which is 17.5% below the current price. Roku would lose considerable value in a downturn due to its premium valuation, but the stock has solid long-term potential and should attract investor attention on every major dip.
Beyond Meat also among biggest stock movements
Shares of Beyond Meat (BYND) gained almost 6% today. Similar to Roku, BYND shares have also been on an absolute tear. The stock has more than tripled since its IPO despite losing 21% in market value this month.
The stock is trading higher today after Beyond Meat announced a partnership with KFC. According to this IBD report, “Yum Brands (YUM) chicken chain KFC on Monday said it would test a plant-based chicken item made by imitation-meat maker Beyond Meat (BYND) at a single restaurant in Atlanta.”
This news provides a huge opportunity for BYND and investors if the test run with KFC is successful.
Splunk stock fell 5% today
Shares of Splunk (SPLK) are down over 5% today. Splunk reported its earnings results for Q2 of fiscal 2020 last week, surpassing analyst earnings and revenue estimates. Yet shares are down 17% this month. Splunk stock fell after the first-quarter results as well. Investors were concerned about the company’s cash flow metrics.
Splunk has moved to a subscription-based model, which should lead to a stable stream of recurring sales. But this move has also affected the company’s cash flow as customers will now be invoiced annually. Splunk had received upfront payments from enterprises previously.
The billing transition resulted in a negative cash flow of $129 million for Splunk in the July quarter. According to this Forbes report, Splunk has forecast operating cash flow at -$300 million in fiscal 2020, down from its earlier estimate for positive cash flow of $250 million.
The cash flow issue put Splunk among today’s biggest stock movements but is a temporary concern. The company’s fundamentals remain solid. Splunk stock has lost over 21% in market value since the end of July 2019, and it should be an attractive pick at the current price, given its robust growth metrics.
Cree loss among today’s market movers
Shares of semiconductor company Cree (CREE) fell 8.3% today. The stock slipped 31% in August 2019 and is trading 38% below its 52-week high. Cree fell 16% on August 21 after its results came out for the fourth quarter of fiscal 2019. We warned investors at the time to tread cautiously with this stock since it was still trading at a premium.
Today, Piper Jaffray downgraded Cree from “neutral” to “underweight” and reduced its price target from $57 to $38. The investment bank was unimpressed with Cree’s weak outlook, which was driven lower by the ban on China’s Huawei.