3 Stocks Crushed by the Market This Week 04-25-14


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3 of the worst health-care stocks this week

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3 Stocks Crushed by the Market This Week 04-25-14

  1. 1. 3 Stocks Crushed by the Market This Week
  2. 2. Plenty of stocks took a beating this week, but few like these three health-care stocks. Here are this week’s big losers in health care – and why they were crushed.
  3. 3. The health-care technology company’s shares plunged over 29% for the week. Castlight Health (NYSE:CSLT) Source: Yahoo! Finance
  4. 4. • No real news for Castlight this week • Shares have continued downward momentum for the last three months • A frothy valuation following Castlight’s IPO earlier this year appears to be weighing heavily on the stock • Castlight’s business model of helping consumers make better health-care purchase decisions is great – but the share price got way ahead of near-term revenue and earnings potential Why Castlight’s shares got clobbered
  5. 5. Shares of the life sciences technology provider dropped more than 23% this week. Medidata Solutions (Nasdaq:MDSO) Source: Yahoo! Finance
  6. 6. • Investors were sorely disappointed by Medidata’s Q1 financial numbers • Adjusted earnings came in at $0.11 per share – well below the consensus estimate of $0.16 • Revenue grew 21% year-over-year to $76.6 million • Shares have traded at a premium price-to-earnings multiple, so any negative surprises (like the Q1 earnings) take their toll Why Medidata’s shares melted
  7. 7. The stock of the 3-D bioprinting company fell nearly 21% this week. Organovo Holdings (NYSEMKT:ONVO) Source: Yahoo! Finance
  8. 8. • No real news from Organovo this week • The stock’s continued woes probably relate to last week’s big news • On April 15, Organovo responded to what it termed “misleading and inaccurate reports” from two firms the company suspects are linked to short-sellers • Many investors are attracted to the long- term promise of Organovo’s bioprinting technology, but skeptics think that promise could be too far off to justify the stock’s current price tag Why Organovo shares tanked
  9. 9. • Castlight Health’s business model is compelling, while the potential for Organovo’s technology is intriguing • Medidata, however, already generates strong revenue and should see brighter days ahead on the bottom line • Like both of this week’s other big losers, though, Medidata’s valuation could be scary for many investors Best shot at bouncing back?
  10. 10. Find out which stock The Motley Fool’s chief investment officer selected as the top pick for 2014 in our free report!