Each week, The Fly will announce the newest downgrades to Strong Sell in StockNews.com's POWR Ratings algorithmic model.

This Fly exclusive recap identifies stocks with over a $1B market capitalization that have been downgraded this week to the Strong Sell, or "F," rating in the service's proprietary model that analyzes 118 different factors, each of which contribute a little to the stock's predicted likelihood of underperformance. A bell curve distribution of StockNews.com's ratings shows that only the top 5% of the over 5,000 stocks rated by the system are assigned a "Strong Buy," or "A," rating while the bottom 5% are assigned a Strong Sell. The F-rated stocks would have tumbled an average of 18.98% a year since 1999, according to StockNews.com.

This week's downgrades to Strong Sell as determined by the POWR Ratings algorithm:

Roku (ROKU) - operator of a platform for streaming TV content publishers and advertisers whose streaming players and TV-related audio devices are available in the U.S. and in select countries through direct retail sales and licensing arrangements with service operators
Royal Caribbean Group (RCL) - a cruise company with a global fleet of 64 ships that owns and operates its flagship brand as well as Celebrity Cruises and Silversea Cruises
Carnival Corporation (CCL) - the world's largest cruise company with a portfolio of nine cruise lines and operations in North America, Australia, Europe and Asia
Ping Identity (PING) - provider of "Intelligent Identity" solutions that let enterprises remove passwords, prevent fraud, support Zero Trust, and accomplish other tasks to protect digital interactions
Shake Shack (SHAK) - restaurant company known for its burgers and crispy chicken sandwiches which operates more than 350 locations in the U.S. and more than 100 international locations
Tilray Brands (TLRY) - a cannabis-lifestyle and consumer packaged goods company with operations in Canada, the United States, Europe, Australia, and Latin America
Compass (COMP) - a technology-enabled residential real estate brokerage that identifies itself as "the largest residential real estate brokerage in the United States"
Digital World Acquisition (DWAC) - the blank-check company that has agreed to take Trump Media & Technology Group public
NexGen Energy (NXE) - a corporation focused on the development of the Rook I uranium project located in Saskatchewan, Canada into production
Independence Realty Trust (IRT) - a multifamily apartment REIT
Frontier Group (ULCC) - the parent company of Frontier Airlines, which operates more than 110 A320 family aircraft and markets itself as "the most fuel-efficient of all major U.S. carriers"
Planet Labs PBC (PL) - a provider of satellite imagery and geospatial solutions that designs, builds, and operates what it touts as "the largest Earth observation fleet of imaging satellites"
Recursion (RXRX) - a clinical-stage biotechnology company that says it is "industrializing drug discovery by decoding biology" with its Recursion Operating System platform that leverages machine-learning algorithms to generate a collection of hundreds of billions of searchable relationships across biology and chemistry
Teladoc Health (TDOC) - a direct-to-consumer telehealth provider
PAR Technology (PAR) - a provider of restaurant hardware, software, drive-thru, and back-office solutions
TransMedics (TMDX) - a medical technology company focused on portable extracorporeal warm perfusion and technologies to preserve organ quality to potentially increase the utilization of donor organs for the treatment of end-stage heart, lung, and liver failure
Natera (NTRA) - a provider of cell-free DNA, or cfDNA, testing with a focus on women's health, oncology, and organ health
Proterra (PTRA) - a developer and producer of commercial electric vehicle technology

Learn more about the POWR Ratings

The Fly's recent reporting on these stocks includes:

On August 5, JPMorgan analyst Julia Qin raised the firm's price target on Natera to $100 from $80 and kept an Overweight rating on the shares. Natera reported solid 2Q results and expanded reimbursement meaningfully boosts its revenue outlook, Qin tells investors. The company was also recently included in UnitedHealth's (UNH) preferred lab network, a further testament to Natera's "leading operating standards," says the analyst. She believes the company "continues to fire on all cylinders across the portfolio."

On August 4, a 3.25M share secondary offering from TransMedics priced at $40.00 per share. The deal size was increased to $130M from $100M and priced below the prior day's closing price of $41.21. JPMorgan, Morgan Stanley, Cowen and Canaccord are acting as joint book running managers for the offering.

Earlier in the week, Shake Shack reported its Q2 results, including revenue that missed the consensus forecast, and guided to Q3 sales that were below Street expectations.

On August 3, Ping Identity announced that it has entered into a definitive agreement to be acquired by software investment firm Thoma Bravo for $28.50 per share in an all-cash transaction valued at an enterprise value of approximately $2.8B. The offer represents a premium of approximately 63% over Ping Identity's closing share price on August 2, the last full trading day prior to the transaction announcement, and a premium of 52% over the volume weighted average price of Ping Identity stock for the 60 days ending August 2. The transaction, which was unanimously approved by the Ping Identity Board of Directors, is expected to close in the fourth quarter of 2022, subject to customary closing conditions. Upon completion of the transaction, Ping Identity's common stock will no longer be listed on the New York Stock Exchange and Ping Identity will become a privately held company.

The same day, Citi analyst Jason Bazinet lowered the firm's price target on Roku to $125 from $165 and kept a Buy rating on the shares. The company's Q2 results and outlook were disappointing but an analysis suggests Roku's Platform revenues are closely tracking YouTube's trends, Bazinet tells investors. As such, he believes the recent sales weakness is a function of macro headwinds and does not reflect execution issues at Roku. Bazinet remains a buyer of the shares.

In addition, Morgan Stanley analyst Benjamin Swinburne lowered the firm's price target on Roku to $55 from $80 and keeps an Underweight rating on the shares. While he was expecting growth to slow, the pace of deceleration, combined with lower gross margins and upcoming greater EBIT losses, "raise additional questions, including about the relative value of Roku's inventory to advertisers and how to call a valuation floor on the shares, Swinburne said in his earnings recap note to investors. Roku's decision to meaningfully ramp up operating expenses this year "proved ill-timed," as it pushes out profits for years to come at a time when the ad market has "clearly softened," Swinburne added.

On August 2, BofA analyst Andrew Didora resumed coverage of Frontier Group with a Buy rating and $19 price target following Spirit Airlines' (SAVE) announcement last week that it has terminated the merger agreement with Frontier. If the Spirit and JetBlue (JBLU) transaction gets approved, Frontier will be the largest ultra-low cost carrier in the U.S., giving it new market opportunities and supporting multi-year growth, Didora said. If the Spirit and JetBlue deal is not approved, it could potentially open the door for Frontier to reconsider merger negotiations at some point, the analyst added.

The same day, JPMorgan analyst Allen Gong upgraded TransMedics to Overweight from Neutral with a $48 price target. The company posted "another impressive beat-and-raise" in Q2 as momentum across all three organs was sustained by the continued ramp of the National OCS Program, Gong tells investors. The analyst cites the company's "highly attractive market opportunity, differentiated product offering, and above-peer growth profile" for the upgrade.

Meanwhile, Berenberg analyst Dev Weerasuriya downgraded Teladoc Health to Hold from Buy with a price target of $35, down from $42. The analyst cites the company's "underwhelming execution" and a lack of clear catalysts over the next 12 months for the downgrade. Teladoc's Q2 sales and adjusted EBITDA beat consensus, but margins were pressured by deteriorating yield on customer acquisition costs for BettterHelp, something the company expects to pressure margins and push fiscal 2022 results toward the lower end of the guidance range, Weerasuriya tells investors in a research note. The analyst says a chronic care pipeline "that is slow to mature," a higher-than-anticipated burden on BettterHelp performance due to consumer weakness, and the lack of visibility into the timing of a fully integrated whole-person care model "give us little to be enthusiastic about over the next 12 months."

Cowen analyst Charles Ryhee also downgraded Teladoc to Market Perform from Outperform with a price target of $34, down from $58, following the company's report of its Q2 results. Consensus estimates for Teladoc have not been fully de-risked for macro headwinds to Behavioral Health and the trajectory for Chronic Care, Ryhee tells investors. The analyst believes Teladoc will likely be challenged achieving its 2022 guidance while 2023 consensus adjusted EBITDA numbers are "likely at risk."

On August 1, Royal Caribbean announced that it has commenced a private offering of senior convertible notes to be issued by the company due 2025 in an aggregate principal amount of up to $900M. In addition, the company intends to grant the initial purchasers an option to purchase up to an additional $135M principal amount of convertible notes.