Should you target CyrusOne’s rebound after pullback?

on Jun 23, 2021
  • CyrusOne shares plunged more than 12% last week.
  • The stock attempted a rebound on Wednesday morning that lacked momentum.
  • CONE shares still look overvalued, meaning investors can expect more declines.

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CyrusOne Inc. (NASDAQ:CONE) is a real estate investment trust (REIT) that invests in data centers. The company’s stock price plunged more than 12% last week after the research firm Cowen downgraded it from a buy rating to a neutral rating citing a bleak outlook.

CONE shares bounced back on Wednesday morning, gaining approximately 1.17%. 

Fundamentals overview: CyrusOne still looks overvalued

CyrusOne trades at a high P/E ratio of 183.88. The forward 12-month P/E is even higher at 331.86, suggesting a potential earnings decline in the next 12 months. The stock price is down 5.66% in the last 12 months and up 1% this year. But still, nothing is exciting looking forward.

Source – TradingView

Technical overview: CONE rebound lacks momentum

CONE’s share price seems to be attempting a rebound, but it lacks enough momentum to drive it higher. The stock could fall further as it faces resistance from the 100-day MA.

Investors can target pullback profits at approximately $68.18 and $65.56. The key resistance levels are $73.04 and $75.84.

Bottom line: CONE stock looks poised for extended declines

Although CONE shares plunged recently, the current rebound lacks catalysts to drive the share price higher. Therefore, investors can expect another pullback before the stock establishes a more robust rebound.