Tech stocks ‘share a common ominous situation’, says Citi strategist

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Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow

“Tech themes share a common, unfortunately ominous, situation: slowing sales growth. Seasoned investors may connote this setup with complications including profitability pressures and valuations headwinds. Our resolution is twofold. First, we emphasize efficiency by screening for rising ROE driven by expanding margins and improving asset turnover. Second, we require a margin of safety based on our reverse-DCF framework and a fair value approach utilizing out-year street estimates.

These are: Alphabet, PayPal Holdings, Doordash, Trade Desk, Block, eBay, GoDaddy, Zoom Video Communications, VeriSign, Match Group, Maplebear, Etsy, Wayfair, IAC, Zoomlnfo Technologies, Hims and Hers Health, Marqeta, ZiffDavis, Opendoor Technologies, Angi, Redfin, Adyen, LYCorporation, Wixcom, Schibsted Asa, Zalando, Nuvei, Deliveroo, Just Eat Takeaway.com, Criteo SA and AUTOI Group.

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