Earnings Update & Growth Stocks, Let the Good Times Role
This week was disappointing for many mega cap tech stocks, next week we have retail favorites reporting
Earnings season is in full swing with big banks and big tech now all reporting. A show of stocks that released earnings this week:
The purpose of this letter is to recap what we’ve learned from this last week and talk about 8 new stock ideas, how they performed last earnings and how they’re expected to perform this quarter!
Expected time to read: 10 minutes
Let’s briefly touch up on a few of the big dogs and retail favorites with a few quick summaries:
Facebook: Officially changed its name, effective Dec. 1st, to Meta. The ticker will now be $MVRS. Announced a $50B share buy back on top of a revenue miss by nearly $500m and an EPS beat at $3.22. Occulus revenue grew 195%.
Microsoft: Now the largest company in the world, taking APPL market cap. Reported a revenue and earnings beat with $45.3B and an EPS of $2.27. The growth is predominately fueled by cloud and personal computing revenue. Azure and other cloud products grew 50% YoY.
AMD: Posting a beat on top and bottom line of revenue at $4.31B and EPS of $.75. Raised guidance from $4.25B to $4.5B in the 4th quarter of 2021. Full year revenue growth expected to be 65%. The strong sales growth is coming predominately from data center chips.
Enphase: Growing 96.9% YoY, revenue beat by $7.74m to bring $351.5m. EPS beat of $.11 to yield $.60 per share. Substantially raised revenue to be between $390m - $410m, up from previous guidance of $374m.
Spotify: Advertising revenue jumps 75% to have top-line revenue beat by 3.5B euro’s, which beat by 50m euros. EPS missed by .25 but exceed MAU expectations with 22% YoY growth in premium subscriber revenue. Spotify’s studio business experienced double digit YoY growth.
Teladoc: Investors were mixed with AH revenue down to up more than +7% the next day. TDOC beat on both top and bottom line with revenue growing 80.6% YoY with $521.6m and EPS of -%.53 predominately fueled by stock based compensation. TDOC could be setting up to be a 2022 winner.
ServiceNow: Originally saw a decline in share-price after hours but recovered the next day as subscription revenue continued to grow. Revenue and EPS both beat with revenue coming in at $1.51B (+32.5% YoY) and EPS of $.31. Subscription revenue is forecasted to continue its growth trajectory at $1.52B
Twilio: Revenue beat with a surprised non-GAAP profit. Revenue ended at $740.2m (+65.2% YoY) and Non-GAAP EPS at $.01, GAAP EPS of -$1.26. NRR of 131%, slowing down from 137%. Guidance was raised beyond expectations with revenue projected at $760m - $770m up from $750m with EPS guidance down to -$.26 from -$.23 expectations.
UpWork: Trading down on slowing growth and competition concerns. A beat on top and bottom line with revenue at $128m (+32.4%) and Non-GAAP EPS of $.04. Guidance showed a decrease in revenue growth of $130m - $132m (+23% YoY)
Shopify: Missed nearly all expectations but managed to find a way to be up +7%. Revenue missed by $30m, showing $1.12B (+46% YoY) and Non-GAAP EPS missed by $.41, showing $.81. Surprisingly, GAAP EPS beat by $8.55. Subscription services revenue up +37% and merchant solutions up 51%. GMV also missed expectations hitting $41.8B vs $43.4B consensus.
Apple: Missed revenue expectations by $1.63B, hitting $83.26B with 28.9% YoY growth. EPS was in-line with $1.24 expected and met. Revenue for nearly every product line was down aside from iPad sales and services revenue showing $18.27B vs $17.57B expected. Apple dividend of .6% declared, in-line with previous.
Amazon: Missed expectations substantially, showing slowing growth. Revenue miss of $110.8B vs $111.16B expectations and EPS miss of $6.12 vs $8.92 expectations. Online sales slowed substantially, showing 3% YoY growth and revenue of $49.94B vs $51.53B. AWS still grew 39% YoY. Guidance was also down to $140B vs $142B expectations.
Atlassian: Beat top and bottomline expectations with revenue showing 33.6% YoY growth of $614m and Non-GAAP EPS of $.46. GAAP EPS of -$1.59. Guidance was also revised upward showing $630 - $640m vs $621m consensus.
Previously, for this earnings season, I did pre-earnings coverage on a few fast growing companies like: UPST, PLTR, APPS, INMD, SI, DOCN, OPLX, AMPL, DLO, GLBE, EXPI, NVEI, ZI, FUBO, SOFI, BHG, PUBM, AGFY, GTLB, BRLT.
These are some of the best small and mid cap growth stocks I can find. The reason why I try to cover these is to give you, the reader, additional insight and ideas for future or current investments. There are a few I think are positioned to perform very well assuming a good quarterly report. To get a similar description on the above stocks, I covered them in the first 2 letters in this three part series:
For the third and final part of this series of letters, I’m covering: Sea Limited $SE, Lightspeed Commerce $LSPD, CrowdStrike $CRWD, SentinelOne $S, Roku $ROKU, DraftKings $DKNG, Fiverr $FVRR, GrowGeneration $GRWG. For each company I will provide:
A brief description of each company
What happened last earnings call
What to look for this next earnings call
Revenue and EPS expectations
If you’d like to forward to a few of the above stocks, I’ve listed all companies in the order of: SE, LSPD, CRWD, S, ROKU, DKNG, FVRR, and GRWG
I hope it’s helpful!
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