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Why Axon Enterprise, Mylan, and Weight Watchers International Slumped Today

Dan Caplinger, The Motley Fool

The stock market spent most of the session in the red on Wednesday, but by the close, that was far from evident. The Dow Jones Industrial Average fell about 70 points, but other major indexes finished closer to unchanged as investors took solace in the continued strength of the U.S. economy. Even with that tailwind, some individual companies weren't so fortunate, suffering from business-specific challenges that hurt their share prices. Axon Enterprise (NASDAQ: AAXN), Mylan (NASDAQ: MYL), and Weight Watchers International (NASDAQ: WTW) were among the worst performers. Here's why they did so poorly.

Axon gets zapped

Shares of Axon Enterprise fell 8% after the Taser maker reported its fourth-quarter financial results. Axon saw a 21% rise in revenue, led higher by big gains in its cloud business and in sales from international sources. Bookings for its software and sensor offerings climbed by more than half as well, and other backward-looking metrics looked strong. However, top-line gains didn't translate into as much earnings growth as investors had wanted to see, and shareholders also seemed put off by guidance for 2019, which includes sales projections for growth of just 14% to 17%. Axon will just have to prove that it can sustain faster growth if it wants to regain investors' confidence.

Police officer with Axon branded body camera prominently displayed on upper torso.
Police officer with Axon branded body camera prominently displayed on upper torso.

Image source: Axon Enterprise.

Mylan doesn't look well

Mylan saw its stock drop 15% following the release of the pharmaceutical giant's fourth-quarter report. Revenue for the quarter was down 5% from the year-ago period, and adjusted earnings fell 9% on a per-share basis, closing a tough year for the company. Moreover, continuing manufacturing challenges at its West Virginia facility plagued Mylan, and even though the drugmaker hopes that 2019 will prove more promising, anticipated sales growth won't necessarily translate into higher profit. In the long run, Mylan will have to show that investments in its research and development capabilities will pay off with blockbuster drugs.

Weight Watchers leaves investors confused

Finally, shares of Weight Watchers International plunged over 34%. The weight loss and wellness specialist reported a 6% rise in revenue in the fourth quarter of 2018, with adjusted operating income climbing 28%. But guidance for 2019 was extremely weak, with calls for $1.25 to $1.50 in earnings per share comparing terribly to the $3.19 per share that Weight Watchers posted in 2018. Early reads on the key January membership season also showed poor results, and the company's name change to WW was badly communicated and confusing to customers. CEO Mindy Grossman still believes that changing the company's emphasis from weight loss to wellness fits better with shifting consumer preferences, but with heavy competition in the industry, Weight Watchers can't afford any further missteps in execution.

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Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Axon Enterprise. The Motley Fool recommends Mylan. The Motley Fool has a disclosure policy.