Why Del Taco Restaurants, NCR, and Axon Enterprise Slumped Today

Friday was another strong day for the market, as the Dow, S&P 500, and Nasdaq Composite all climbed to record levels. The prospects for an end to gridlock in the federal government gave investors fresh confidence as the Senate moved forward with a budget proposal that could pave the way for the Republican tax plan to become law without facing potential roadblocks from Democrats. Yet even though most benchmarks saw gains in the neighborhood of about half a percent, some companies suffered bad news that sent their shares lower. Del Taco Restaurants (NASDAQ: TACO), NCR (NYSE: NCR), and Axon Enterprise (NASDAQ: AAXN) were among the worst performers on the day. Below, we'll look more closely at these stocks to tell you why they did so poorly.

Del Taco leaves investors with a bad taste in their mouth

Shares of Del Taco Restaurants dropped 18.5% after the Mexican fast-food specialist reported its third-quarter financial results. Del Taco said that revenue rose 6% on comparable-restaurant sales growth of 4.1%, due largely to bigger average checks and a more favorable sales mix compared to the year-earlier period. Yet CEO John Cappasola cited food inflation and other factors in creating cost pressures for the fast-food chain, and that led the company to cut the upper end of its previous earnings guidance range due to weaker-than-expected restaurant contribution margin. Nevertheless, many of Del Taco's resulting guidance revisions were neutral to positive, including full-year comps narrowing to the upper end of the previous range, and in the long run, Del Taco is still confident in its ability to be successful.

NCR gets held up

NCR stock fell 11% in the wake of fallout from the company's third-quarter financial report. Revenue eased lower compared to the year-ago period, and even though NCR's bottom line saw considerable improvement, weakness in orders for automated teller machines weighed on investor confidence in the payment hardware and services provider. NCR also reduced its full-year guidance on earnings and revenue. Shareholders should keep in mind that the struggles that NCR faces in the ATM market could prove short-lived, but for now, investors weren't willing to be patient even amid relative strength in higher-growth areas like digital banking and the hospitality cloud.

Axon deals with SEC review

Finally, shares of Axon Enterprise declined 6.5%. The maker of Taser stun guns and law enforcement body camera equipment said late Thursday that the Securities and Exchange Commission has asked for information about financial disclosures for the 2016 fiscal year and for the first quarter of 2017. Axon said that it is working with the SEC to get the issues resolved, but the content of the letters suggests that Axon executives failed to respond as quickly as the regulatory agency would have preferred. Even though Axon dominates the new market for in-car and body cameras, it needs to ensure that it keeps the SEC happy about the way it handles its success.

Offer from The Motley Fool: The 10 best stocks to buy now

Motley Fool co-founders Tom and David Gardner have spent more than a decade beating the market. In fact, the newsletter they run, Motley Fool Stock Advisor, has tripled the S&P 500!*

Tom and David just revealed their ten top stock picks for investors to buy right now.

Click here to get access to the full list!

*Stock Advisor returns as of Oct. 9, 2017.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Axon Enterprise. The Motley Fool recommends NCR. The Motley Fool has a disclosure policy.