What Happened?
A number of stocks fell in the afternoon session after the combination of rising oil prices, higher Treasury yields, and shifting rate expectations tightened the macro backdrop for corporate clients.
ADP's May payroll print (122,000 jobs added, above the 110,000 consensus) confirmed the labor market remains firm, but the data also pushed rate hike expectations higher, reducing the likelihood of the relief companies had been anticipating.
Adding to the weakness, GitLab announced it would cut approximately 14% of its workforce and exit 22 countries, signaling that enterprise clients continue to manage costs tightly even amid a broader market recovery. In a sector where spending depends on corporate confidence, higher-for-longer rates and geopolitical uncertainty are a direct headwind.
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:
- Advertising & Marketing Services company MediaAlpha (NYSE: MAX) fell 5.7%. Is now the time to buy MediaAlpha? Access our full analysis report here, it’s free.
- IT Services & Consulting company Grid Dynamics (NASDAQ: GDYN) fell 5.9%. Is now the time to buy Grid Dynamics? Access our full analysis report here, it’s free.
- Advertising & Marketing Services company Ibotta (NYSE: IBTA) fell 6.3%. Is now the time to buy Ibotta? Access our full analysis report here, it’s free.
Zooming In On Ibotta (IBTA)
Ibotta’s shares are very volatile and have had 29 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 previous big move we wrote about was 20 days ago when the stock dropped 10.6% on the news that reports of significant insider stock sales by a company director compounded investor concerns over recent weak financial results. Director Thomas D. Lehrman sold over 25,854 shares between May 11 and May 12, according to filings. This move followed the company's first-quarter results, which, despite beating guidance, showed a 2% year-over-year revenue decline and a sharp drop in adjusted profit margins from 17% to 11%. The company also guided for another revenue decline in the upcoming quarter.
Ibotta is up 42.3% since the beginning of the year, but at $32.58 per share, it is still trading 34.8% below its 52-week high of $49.99 from June 2025. Investors who bought $1,000 worth of Ibotta’s shares at the IPO in April 2024 would now be looking at an investment worth $315.52.
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