Significant changes to the bubble basket
The methodology behind the bubble stocks basket is not changing and thus we are still selecting the 40 largest stocks on market capitalization with the following characteristics:
- Market capitalization above $2bn
- Listed on exchanges in North America, Western Europe, Singapore, Japan, Australia, and Hong Kong
- 12-month forward EV/Sales above 8x
- 12-month forward EPS less than 0
Based on a current screening there are 26 stocks out of 40 stocks leaving the bubble stocks basket:
- Kuaishou Technology
- Sea Ltd
- Airbnb Inc
- NIO Inc
- Snowflake Inc
- DoorDash Inc
- Roku Inc
- Bilibili Inc
- Teladoc Health Inc
- XPeng Inc
- Cloudflare Inc
- Splunk Inc
- Exact Sciences Corp
- Gaotu Techedu Inc
- Farfetch Ltd
- DraftKings Inc
- GDS Holdings Ltd
- Ping An Healthcare and Technology Co Ltd
- Innovent Biologics Inc
- Zai Lab Ltd
- Kingsoft Cloud Holdings Ltd
- Yatsen Holding Ltd
- Oak Street Health Inc
- C3.ai Inc
- Canopy Growth Corp
- Appian Corp
Many of these companies still have market capitalization above $2bn and negative earnings expectations, but they have fallen a lot over the past year combined with revenue growing such that their 12-month forward EV/Sales ratio has gone below 8x.
The 26 new stocks entering the basket are:
- Rivian Automotive Inc
- Lucid Group Inc
- NU Holdings Ltd/Cayman Islands
- Cellnex Telecom SA
- Okta Inc
- SenseTime Group Inc
- Grab Holdings Ltd
- Confluent Inc
- Qualtrics International Inc
- Brookfield Renewable Corp
- SentinelOne Inc
- Robinhood Markets Inc
- Samsara Inc
- Gitlab Inc
- Asana Inc
- Monday.com Ltd
- Biohaven Pharmaceutical Holding Co Ltd
- Procore Technologies Inc
- Kingdee International Software Group Co Ltd
- Guidewire Software Inc
- Ginkgo Bioworks Holdings Inc
- Smartsheet Inc
- Novocure Ltd
- Shanghai Junshi Biosciences Co Ltd
- Ascendis Pharma A/S
- Intellia Therapeutics Inc
The table below shows the new updated bubble stocks basket and some key statistics. The bubble stocks basket now represents $687bn in market value down from $1,565bn a year ago highlighting the shareholder value destruction that has taken place in the part of the equity market. A year ago, the bubble stocks basket had a median 12-month forward EV/Sales ratio of 21.3x which has now declined to 14.6x.
Rivian Automotive Inc | 54,874 | -4.97 | 14.8 | 118.1 | NA | -41.2 |
Lucid Group Inc | 45,160 | -1.02 | 17.7 | 61.6 | NA | -27.9 |
NU Holdings Ltd/Cayman Islands | 41,017 | -0.02 | 14.9 | 29.9 | NA | -5.1 |
Unity Software Inc | 31,483 | -0.13 | 19.7 | 47.6 | NA | -24.7 |
Cellnex Telecom SA | 30,482 | -0.08 | 10.6 | 67.5 | 277.2 | -23.3 |
Okta Inc | 29,623 | -0.45 | 16.5 | 43.5 | NA | -15.0 |
SenseTime Group Inc | 29,154 | -0.03 | 31.5 | 7.8 | NA | 23.3 |
MongoDB Inc | 27,998 | -0.90 | 23.8 | 32.8 | NA | -20.8 |
Seagen Inc | 25,598 | -0.49 | 10.3 | 29.5 | 132.7 | -9.5 |
Bill.com Holdings Inc | 24,468 | -0.48 | 31.9 | 32.2 | NA | -5.2 |
BeiGene Ltd | 23,748 | -11.04 | 13.7 | 80.2 | 486.6 | -22.0 |
Grab Holdings Ltd | 19,491 | -0.25 | 17.2 | 88.4 | NA | -26.9 |
Confluent Inc | 19,079 | -0.75 | 33.8 | 24.6 | NA | -5.4 |
Affirm Holdings Inc | 18,336 | -1.44 | 10.5 | 55.9 | NA | -35.1 |
Alnylam Pharmaceuticals Inc | 17,658 | -3.35 | 12.4 | 42.3 | 224.0 | -12.9 |
Qualtrics International Inc | 17,559 | 0.00 | 11.7 | 33.8 | NA | -13.1 |
Argenx SE | 15,084 | -19.10 | 67.2 | 30.4 | 1,494.6 | -19.8 |
Plug Power Inc | 12,657 | -0.24 | 9.4 | 98.5 | 1,761.0 | -22.2 |
Brookfield Renewable Corp | 12,373 | -0.17 | 13.1 | 24.7 | NA | -6.8 |
Wolfspeed Inc | 11,849 | -0.16 | 12.6 | 25.4 | 269.4 | -14.8 |
SentinelOne Inc | 11,568 | -0.68 | 28.2 | 48.9 | NA | -14.2 |
Robinhood Markets Inc | 11,559 | -1.07 | 9.3 | 59.1 | NA | -24.7 |
Samsara Inc | 11,031 | -0.31 | 21.9 | 35.1 | NA | -22.1 |
Gitlab Inc | 10,773 | -1.04 | 29.1 | 64.1 | NA | -14.5 |
Asana Inc | 10,246 | -0.98 | 19.9 | 58.9 | NA | -26.3 |
10X Genomics Inc | 10,118 | -0.24 | 13.6 | 109.8 | NA | -39.2 |
Avalara Inc | 9,383 | -0.19 | 10.2 | 68.3 | NA | -16.4 |
Monday.com Ltd | 9,141 | -2.44 | 17.9 | 78.1 | NA | -32.9 |
Biohaven Pharmaceutical Holding Co Ltd | 8,570 | -5.16 | 9.3 | 20.8 | NA | -5.1 |
Elastic NV | 8,497 | -0.45 | 8.2 | 73.6 | NA | -25.5 |
Procore Technologies Inc | 8,358 | -0.76 | 11.4 | 68.5 | NA | -20.8 |
Kingdee International Software Group Co Ltd | 8,770 | -0.04 | 9.7 | 57.5 | 529.5 | -18.0 |
Guidewire Software Inc | 8,042 | -0.24 | 9.2 | 36.1 | 76.9 | -15.0 |
Ginkgo Bioworks Holdings Inc | 8,028 | -0.15 | 21.7 | 118.5 | NA | -35.0 |
Smartsheet Inc | 7,952 | -0.25 | 10.3 | 46.7 | NA | -19.0 |
Novocure Ltd | 7,818 | -0.38 | 13.0 | 73.5 | 960.6 | 0.3 |
Shanghai Junshi Biosciences Co Ltd | 7,609 | -0.89 | 14.9 | 61.7 | NA | -19.4 |
Guardant Health Inc | 7,353 | -4.38 | 14.4 | 116.5 | NA | -27.7 |
Ascendis Pharma A/S | 7,021 | -8.05 | 65.0 | 53.5 | 423.9 | -8.2 |
Intellia Therapeutics Inc | 6,940 | -4.10 | 163.0 | 69.2 | 617.9 | -21.1 |
Source: Bloomberg and Saxo Group