From Nasdaq, Inc.:

In 2024, there has been a rough start for the stock market. Some big rally drivers from 2023 took hits in the first few days of this year, including some Magnificent Seven stocks. Investors are advised to avoid investing in stocks with stretched valuations, such as DoorDash and MongoDB.

Following a 60% drop from its pandemic-era high, DoorDash rallied last year with a market value of about $37 billion. Despite potential economic obstacles, the company continued to grow at a solid double-digit rate throughout 2023. However, due to its high fees and marked-up prices, there may be an economic reality catch-up for DoorDash in 2024.

MongoDB has positioned its database software as an attractive alternative to market leaders, but it trades at a high valuation, about 16 times the average analyst estimate for fiscal 2024 sales. Revenue is increasing, but with high costs, MongoDB has yet to turn a GAAP profit. Despite its growing presence, the valuation of MongoDB looks optimistic.



Read more: 2 Overpriced Stocks I’m Avoiding in 2024