What Happened?
A number of stocks fell in the after-market session after President Trump announced "reciprocal tariffs" on all US imports, set at a minimum rate of 10%. Markets reacted negatively to the announcement, reflecting deep concerns among investors about the broader economic implications. The tariffs were likely seen as a significant threat to global trade flows, with the potential to slow economic growth, drive up consumer prices, and spark retaliatory measures.
Wedbush analyst Dan Ives captured the prevailing market anxiety, stating, "We would characterize this slate of tariffs as 'worse than the worst case scenario' the Street was fearing." His comment highlighted how the scope and severity of the tariffs far exceeded Wall Street's expectations, adding a new layer of uncertainty for businesses and investors.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, following stocks were impacted:
- Sports & Outdoor Equipment Retailer company Sportsman's Warehouse (NASDAQ: SPWH) fell 12%. Is now the time to buy Sportsman's Warehouse? Access our full analysis report here, it’s free.
- Hospitality & Restaurant Software company Olo (NYSE: OLO) fell 6.9%. Is now the time to buy Olo? Access our full analysis report here, it’s free.
- Aerospace company Howmet (NYSE: HWM) fell 8.6%. Is now the time to buy Howmet? Access our full analysis report here, it’s free.
- Consumer Subscription company Udemy (NASDAQ: UDMY) fell 8.6%. Is now the time to buy Udemy? Access our full analysis report here, it’s free.
Zooming In On Sportsman's Warehouse (SPWH)
Sportsman's Warehouse’s shares are extremely volatile and have had 71 moves greater than 5% over the last year. But moves this big are rare even for Sportsman's Warehouse and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was a day ago when the stock gained 109% on the news that the company reported impressive fourth quarter 2024 results, which blew past analysts' revenue, EPS, and EBITDA expectations. The key highlight was the turnaround in same-store sales, which were essentially flat, a sharp recovery from the nearly 13% drop in the same quarter last year. The financial outlook was also encouraging as its full-year EBITDA guidance outperformed Wall Street's estimates. The broader retail environment remained challenging, but the company's focus on local and seasonal demand and a leaner inventory should provide a cushion. Zooming out, we think this quarter featured some important positives.
Sportsman's Warehouse is down 28.8% since the beginning of the year, and at $1.83 per share, it is trading 56.3% below its 52-week high of $4.18 from June 2024. Investors who bought $1,000 worth of Sportsman's Warehouse’s shares 5 years ago would now be looking at an investment worth $332.73.
Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we’ve identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link.
