Stocks: Grab sinks, Rivian falls, Best Buy rises

Yahoo Finance Live's Rachelle Akuffo, Brad Smith, and Emily McCormick break down the action surrounding several of today's trending stocks.

Video Transcript

- Welcome back to Yahoo Finance Live, everyone. We've got just about 24-ish minutes left in today's trading session. Rochelle, Emily, and I want to put three stocks on your radar that we're watching going into the close. And I'll kick things off today for our triple play. My pick is Grab. Keeping a close eye on the declines that we've seen over the course of the day. Down 38%. In the quarterly earnings here that the company reported, it seems that it was impacted by some of the driver engagement incentives.

You also had this company impacted facing tougher conditions as the Delta and Omicron variants were raging on in this most recent quarter. And so the company had to cite that. They did achieve some of the outsized growth they mentioned in the merchandise volume, or the transactions ultimately in all that they saw, and revenues continuing to improve.

But I think at the end of the day, for the headwinds that ride hailing is continuing to see in the region that they operate where you've got more strict policies on COVID, that certainly hampered this most recent quarter. And this is going to be one to watch going forward to see how they rebound from this deeply down day.

- And I think the big concern here for investors in Grab is the fact that this company, yes, as you mentioned, Brad, is seeing some signs of growth. But it's not really showing signs of profitable growth. And as you mentioned, really shelling out for these incentives both to partners as well as to customers. We saw partner incentives were up 74% over last year to $218 million. And consumer incentives more than doubled. They were up 126% to $365 million.

So the big question really here is whether Grab is going to need to continue giving this level of incentives as this reopening continues or whether this is just a temporary thing as they try to bring customers and drivers back on quickly during the early phases of the reopening. But switching gears to another mobility-related stock, that's Rivian. Now, I'm keeping an eye on those shares. They are falling today after the company had to roll back a planned price increase on pre-ordered vehicles due to consumer outcry.

Now, what happened was that Rivian said on Tuesday that prices for its electric R1T pickup and R1S SUVs would be raised by about $12,000 each and that this would apply both to pending orders and to new pre-orders. So Rivian attributed these rising component costs as cause for this price hike. Now, this did not go over well with customers. And Bloomberg reported that apparently some cancellations actually ensued after Rivian's announcements. So earlier today, Rivian CEO did write a letter to customers, saying that price increases will now no longer apply to those who placed pre-orders before March 1.

But guys, I think there are really two things here to keep in mind and that probably are contributing to this falling stock price this afternoon. One is that this is not necessarily a good look for building brand equity when you implement these price increases without properly communicating them in advance to customers. And second of all is the fact that perhaps Rivian doesn't necessarily have the pricing power here if customers are actually canceling these orders following news of a price hike. So I think this is going to be one to keep an eye on here, especially as we have the stock taking a leg lower on the heels of this news.

- And, I mean, that's a fair point, Emily, because, I mean, with any purchase you make, you're in the business of trust. So if you put down a deposit and all of a sudden you're seeing this 20% price hike, it does make you wonder who you're really in business with. Now, I thought it was interesting that Tesla CEO Elon Musk couldn't help but weigh in when Rivian first announced this price hike before that reversal, tweeting, their negative gross margin will be staggering.

Now, obviously, a lot of people have a lot of vested interest here. You have Amazon that owns a 20% stake in Rivian and Ford a 12% stake. But quite a few missteps here out of the gate. Now, my pick for the day is Best Buy. Now, Best Buy is up for the day at about 9% higher today. And we did see that their fourth quarter earnings were better than expected. But revenue did fall short of projections. Now, that was due to a number of issues they listed, including supply chain challenges, as well as some staff shortages, as we saw that spike in Omicron COVID-related cases towards the end of last year.

Still, the stock is up today and year to date. And we did see that CEO Corie Barry weighing in, saying, we do not believe for one minute that we hit our peak revenue and margin this past year. Now, investors seem to be mirroring that optimism and buying into the company's long-term possibilities. Now, COVID also has the tech retailer stepping up the use of its stores as fulfillment centers. So we're seeing that with that larger increase, we're seeing 35% of these now called store hubs accounting for 70% of ship from store volumes. So, clearly, navigating that COVID space a little better than some of its competitors.

- Yeah. Investors certainly had apple pie in the sky type hopes for Best Buy in this most recent quarter. And it was still another record year. Let's not lose sight of that for fiscal year 2022. Record revenue and earnings. Some of the leaders trying to drive even more ways of operating. And they mentioned that the employees worked tirelessly to meet the customer's technology needs.

Let's also remember, of course, this is a company on the retail side where broader in the sector where they are trying to navigate any of those supply chain constraints and getting inventories in time for this most recent holiday season and then seeing that inventory move. There were times when if you were going in for a specific type of television, you weren't going to be able to find it on Best Buy online or in store.

And so with that in mind, I think for some of the targets that they've laid out going forward from here, that is what the investors have to hang their hat on, is an increase yet again in perhaps some of the projections that they're going to be looking at going forward, which shape up for, once again, perhaps another record year for Best Buy. So really, the outlook here, it seems that some of the investors are really glowing around right now.