Procore Technologies Stock Rides A 5-Day Winning Streak To A 31% Gain

A recent surge in Procore Technologies stock highlights a tension between its rapid growth and its current lack of profitability.

A five-day run in Procore Technologies (PCOR) stock has added about $1.9 billion to the company’s market value. The stock has now moved higher for 5 consecutive trading days, delivering a cumulative gain of 31% over that period.

For shareholders, this recent performance has pushed the company’s market value to about $8.1 billion. The move has been specific to the stock, as the S&P 500 returned just +0.4% over the same 5 trading days.

How The Streak Stacks Up Against The S&P 500

Here is how PCOR stock stacks up against the S&P 500 over the streak and the periods around it:

The market is weighing strong growth against negative margins.

Procore reported second-quarter results after the close on July 29, with revenue of $375.2 million up 15.8% year over year, and announced an $845 million cash acquisition of DroneDeploy; the stock gapped higher the next day.

Procore’s revenue over the last twelve months grew 14.9%, outpacing the S&P 500 median revenue growth of 7.8%. Yet its operating margin over the last twelve months is -7.6%, compared to an S&P 500 median of 18.4%. The company also has negative trailing earnings. Streaks themselves are not unusual in the current market; 21 S&P 500 stocks are on winning streaks of three days or more, while 36 are on losing streaks.

A streak prompts a check of the business against the price.

A streak is a piece of information about momentum and market attention, not an instruction to act. The disciplined response is to re-evaluate the underlying business relative to its new, higher price. This recent gain contrasts with longer-term performance, as the stock has returned -3.9% over the trailing three months and -29.5% over the trailing twelve months. The data presents a clear trade-off for investors to consider.

If you are hunting for strength that has more behind it than a hot tape, our Guidance Momentum screen surfaces the names where management raised its own outlook, which is the kind of momentum that tends to persist.

Prefer the theme to this single name? Our ETF Scorecard shows how the software funds stack up. It is still a concentrated bet on that one theme, though, which is exactly the gap the portfolio below closes.

One Hot Stock Is A Story. Thirty Sound Ones Are A Strategy

A streak like this earns a place on your watchlist, and it also earns a question: how much of your outcome do you want depending on one company keeping this up?

The Trefis High Quality (HQ) Portfolio answers it with breadth: roughly 30 businesses picked for consistent cash generation, strong margins, and balance-sheet strength, sized and rebalanced by rules. It has a track record of outpacing a benchmark that combines all major indices – the S&P 500, S&P Mid-cap, and Russell 2000. Follow the story; invest in the strategy.