What Happened?
A number of stocks fell in the afternoon session after investors took a breather following a record-setting rally, with concerns over the Federal Reserve's next move and a prolonged government shutdown weighing on sentiment.
The pullback came as the U.S. government shutdown extended into its second week, creating uncertainty in the market. Investors were also closely watching for signals from the Federal Reserve regarding its monetary policy. This combination of factors led to a cautious mood on Wall Street, causing traders to pause and reassess their positions after weeks of significant gains. Adding to the unease, Chief Economist at Moody's Analytics, Mark Zandi, warned that 22 states are already showing clear signs of a recession, placing the broader U.S. economy in a precarious position.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Online Marketplace company eHealth (NASDAQ: EHTH) fell 5.3%. Is now the time to buy eHealth? Access our full analysis report here, it’s free for active Edge members.
- Consumer Subscription company Chegg (NYSE: CHGG) fell 2.7%. Is now the time to buy Chegg? Access our full analysis report here, it’s free for active Edge members.
- Gig Economy company DoorDash (NASDAQ: DASH) fell 2.2%. Is now the time to buy DoorDash? Access our full analysis report here, it’s free for active Edge members.
- Consumer Subscription company Coursera (NYSE: COUR) fell 4.6%. Is now the time to buy Coursera? Access our full analysis report here, it’s free for active Edge members.
- Social Networking company Snap (NYSE: SNAP) fell 3.7%. Is now the time to buy Snap? Access our full analysis report here, it’s free for active Edge members.
Zooming In On eHealth (EHTH)
eHealth’s shares are extremely volatile and have had 54 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 2 months ago when the stock gained 28.8% on the news that the company posted second-quarter results that surpassed revenue forecasts and raised its full-year financial guidance. The online health insurance marketplace reported that its total revenue fell 8% year-over-year to $60.8 million. Despite the decline, this figure significantly topped Wall Street's expectations. The company also posted an improved net loss compared to the same quarter in the previous year. The key driver for investor optimism appeared to be the company’s updated outlook, as management lifted its full-year 2025 guidance for both revenue and adjusted earnings, suggesting confidence in a strong second-half performance.
eHealth is down 44.2% since the beginning of the year, and at $4.98 per share, it is trading 55.3% below its 52-week high of $11.14 from February 2025. Investors who bought $1,000 worth of eHealth’s shares 5 years ago would now be looking at an investment worth $57.92.
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