PYMNTS’ CE100™ Index Reverses Gains as Weakness In Vroom Offsets Walmart’s Gain

The rebound — for the Connected Economy 100 Index, at least — proved to be short-lived.

In a week that saw wild gyrations in the broader markets, the same held true for the 100 stocks of companies that are changing daily life across several pillars of daily life, from finance to commerce to workaday activities.

We might expect at least some back and forth, given macro concerns such as war in Europe and rising rates. But individual company headlines, of course, have much to do with how equities behave — and more often than not, earnings were the prime movers of stocks over the last few sessions.

For the week ended March 4, the CE100 names slid 8%, bringing the year-to-date performance to ‑21%. That cumulative activity far underperformed the tech-heavy Nasdaq and the broader S&P 500 Index. In fact, the only week of outperformance we see is for the week that ended the month of February.

Performance YTD and For the Week Ended March 4, 2022

Source: PYMNTS

The CE100 Index is a top-down gauge of the overall performance of the 11 pillars, and if we drill down a bit into how they fared in the week, every pillar slipped. The most noteworthy declines were the Shop Index, down more than 14% and Stay Connected Index, off by 13.7%. The smallest drop came in the Be Well Index, down 70 basis points.

Returns, as Measured by Pillar, Through March 4, 2022

This isn’t to suggest that every stock fell within those pillars, but of the positive performers, gains topped out in the mid-single-digit percentage points. The top three performing stocks tracked as part of the CE10 were Walmart, up 5.8%, followed by Workday and Quest Diagnostics, both up 4.9%, respectively.

During the week, Walmart said it launched Choose My Model, a virtual tool powered by computer vision and artificial intelligence. It lets users of the company’s website and app pick a person that resembles their height, shape and skin tone to show how clothes would fit. In addition, Workday reported earnings during the week that topped expectations, while noting that subscription revenue, measured annually, should be up 22%.

Those gains weren’t enough to offset double-digit declines in Vroom, which lost more than half its value during the week (helping drag down the Shop Index), and in Flutter Entertainment and BowX Acquisition Corp. (WeWork), which each lost about a quarter of their value in the same time frame.

Vroom Stock Slides After Quarterly Report

Vroom’s slide came in the wake of its own quarterly results, which showed continued strength in used vehicle eCommerce sales. But higher online vehicle sales came with a pinch on margins as the firm’s pricing of those vehicles was not enough to offset higher acquisition costs. The stock touched all-time lows during the week and slid more than 40% right after results were announced early in the week.

To get a sense of how eCommerce is gaining ground within the vehicle industry, Vroom said that eCommerce units sold increased 92.7% to 21,243.

Management stated that the demand for used vehicles remains strong — in part due to the continued shortage of microchips and delays in new car manufacturing, which in turn, we note, constrain the availability of newer vehicles. But though the average selling price per unit increased to $33,699 in the latest period from $24,909 last year, gross profit per eCommerce vehicle unit slipped to $473 from $878 last year. Acquisition costs are higher, and labor costs are higher, too.

Flutter Entertainment slipped after the Ireland-based bookmaking company saw earnings drop by 11% as economies reopened, which in turn negatively impacted demand for online betting.

BowX Acquisition Corp. (WeWork) continued to sink, down by more than 24% as news reports came Friday that the company was mulling a fresh equity raise — and shares touched a record low on the heels of the news.