It's been a tumultuous year for the markets, especially for the tech-heavy Nasdaq Composite index, which has posted a decline of over 33% year-to-date as of market close on Wednesday. Yet nearly all of the half-dozen public tech companies based in Pittsburgh are poised to end the year even lower.
Strip District-based autonomous vehicle developer Aurora Innovation Inc. (NASDAQ: AUR) leads the pack of area tech companies with the largest decline in its stock price between the dates of Jan. 4 and Dec. 28, posting a year-to-date decline of 89.3% as its stock trades at about $1.16 per share compared to the $10.79 per share it had at the year's onset.
McCandless-based software developer Smith Micro Software Inc. (NASDAQ: SMSI) has seen its stock price decline by over 58% year-to-date, trading at about $2.03 per share compared to the $4.87 it opened with at the start of the year.
Saxonburg-based semiconductor and optical laser equipment maker Coherent Corp. (NASDAQ: COHR) is the local tech company with the third-largest decline in its share price year-to-date, going from $74.49 per share last January to $32.22 per share as of Wednesday's close, a decrease of over 55%.
Canonsburg-based software simulation company Ansys Inc. (NASDAQ: ANSS) has seen its stock price decline by 40% year-to-date and traded at about $234.39 per share on Dec. 28 compared to its year-opening price of $391.10.
And East Liberty-based ed-tech company Duolingo Inc. (NASDAQ: DUOL) has seen its shares slide by 38% year-to-date, with its stock going from $105.86 in January to $65.38 as of Wednesday.
Moon Township-based digital IT services company Mastech Digital Inc. is the only local public tech company that has bested the Nasdaq Composite index so far this year as it has seen its shares decline by 31.5% year-to-date.
Overall, the average stock price of Pittsburgh's public tech companies is down 52% year-to-date.
According to Kim Caughey Forrest, the founder and chief investment officer at Strip District-based Bokeh Capital Partners LLC, it's important to note that a third of these firms are new to the public markets: Duolingo listed in July 2021 and Aurora followed a few months later in November. Ignoring the unique challenges facing these two companies, it also takes time to learn how to "talk to Wall Street," Forrest said.
"I don't care if you're a teeny tiny company or a really big company that gets a new CEO; you have to learn how to couch your estimates and give realistic guidance," Forrest said. "And when I say that, I mean you have to leave yourself a little room for upside."
More broadly, Forrest said it's also worth looking at each company and analyzing their near-term and long-term prospects amid the current environment. With that in mind, she said she's not too worried about the region's local public tech companies given the performance seen this year.
"I'm not at all discouraged because sometimes you can't escape the gravitational pull of the industry in which you operate," Forrest said. "And so if you have something to do with semiconductors, you're the baby getting thrown out with the bathwater; it just happens that way. I wouldn't count them down, and I wouldn't say that these companies are set up for success necessarily in the future either, because, again, we don't know what we're looking at in the future."
Forrest added that the end of the year proves "an interesting time" to look at any portfolio of stocks but clarified that movements like those seen over the past year are "probably not all that germane if you're going to hold [the investment] for the next 10 years."
"Does Dec. 31st mean anything; I say it doesn't," Forrest said. "It's one more day out of the days that you're going to hold this collection of stocks. Year-over-year gains and losses for the tax year are interesting, but that's about it."
