THIS WEEK IS GOING TO BE NUTS!
In this weeks news letter, I’ll cover earnings and revenue expectations for a lot of the more popular retail investing tickers but also talk about CPI Data and what that means from a macro perspective. For each ticker I’ll briefly cover what the business does and what I expect from each earnings release. Obviously, this isn’t written in stone (there are always surprises) and it’s a lot like taking an educated guess on an NFL Sunday lineup.
Table of contents: This is in order, feel free to scroll down to the stock(s)/topic(s) that most interests you. A picture of the stock symbol will be listed before every section.
Monday
Digital Turbine earnings
Tuesday
PubMatic earnings
FuboTV earnings
Upstart earnings
Coinbase earnings
Doximity earnings
Wednesday
CPI Data
Matterport earnings
Stem earnings
Thursday
Grow Generation earnings
Palantir earnings
SoFi earnings
LET’S GOO!
We’re starting the week off strong on Monday
Digital Turbine $APPS is set to release earnings after hours. Digital Turbine is one of my largest positions and the best way to think about this business is that they are a supply side advertising company, or at least that’s what they’ve grown to be. Originally, the Digital Turbine software worked with Android phones to install certain applications on a users phone. The owners of the business (ran through the app) would pay to have their app installed and Digital Turbine would take a cut. Eventually, they acquired 3 different businesses: Ad-Colony, Fyber, and Appreciate. The significance of these acquisitions allows Digital Turbine to evolve their business model to a more recurring, ad-driven, model. Now, they don’t just install apps on an Android users phone, but they can also monetize those apps on a recurring basis through advertisements. I cannot tell you how strong of a competitive advantage this gives them in the world of phone app advertising. This also allows them to finally begin expanding into iOS devices as well. Moral of the story, this is a very strong, high-growth business model that is under-appreciated by Wall Street. Or, I should say, for now. This earnings is the first one as a fully combined entity and we’ll get a great idea for how this story is going to begin to unfold. I got them penciled in as a 3 part beat, current expectations:
Revenue: 191.26m
EPS: $.31
Full year revenue guidance: $1.13B
Market-cap: $6.33B
Tuesday is definitely a big day for my watch list and portfolio
PubMatic $PUBM is a sneaky one and could yield substantial shareholder returns if guidance is beat. It’s currently priced to fail, but after what I saw with Magnite $MGNI I am optimistic but still cautious at the same time. Advertising spend as a whole with the industry did rise this quarter, especially when it comes to digital ad spend. The important thing to know about this industry is that it is very cyclical and some of the top players revenue seems to correlate very close together. When it comes to PubMatic, what makes them unique and different (why they’re also in my portfolio) is that they run an infrastructure first tech stack to their programmatic advertising. To make this very simple, this allows them to be more flexible, run better margins, and innovate faster than the competition. Within digital advertising, competition is plentiful and some sort of competitive advantage is needed to take advantage of the biggest tailwind that is happening right now. That’s industry consolidation. Smaller players are getting bought out or failing, the bigger players are taking more of the pie. I think, with this earnings, PubMatic is at a make or break for shareholders. I think management is sandbagging big time and I think we see a triple beat. Current expectations:
Revenue: $45.74m
Non-GAAP EPS: $.08
Full year revenue guidance: $198.28
Market cap: $1.58B
Fubo is a stock that, I believe, many are rooting for but not everyone owns. What they currently do is different than what they’re trying to accomplish. In particular, they’re currently a sports first streaming service that has the largest offering of sports content on the market, even beating YouTube TV. But, I believe what they really want to do is become a sports first company that also integrates sports betting within their existing platform. This is a long shot, but it’s not impossible and the progression of this story is exactly what I’ll be looking for with this business. They’re currently expected to launch their sports book in Q4 of this year and they should release a beta in the next few months. They’re still growing exponentially with their platform but are currently running negative to break even gross margins, I am looking for this to improve as well as their ARPU. Long term, this business absolutely has multi-bagger potential if they’re able to successfully execute on their long term vision and strategy. I do think this runs a risk of selling off around earnings on an EPS miss (I think they beat revenue) which can create a buying opportunity. Current expectations:
Revenue: $121.42m
Non-GAAP EPS: -$.49
Full year revenue guidance: $531m
Market cap: $3.68B
There are few businesses in the FinTwit community that have created as much controversy as Upstart. Either you get it and believe the story, or you don’t. Personally, I’m in the camp that I believe in the CEO and I believe in this management team. I think their competitive moat is in their people and what they’re doing, similar to my obsession with Palantir. At their core, they’re an artificial intelligence company that uses its AI capabilities to offer people loans. They move away from the traditional credit score and use their AI to run various different scenario’s to accurately project if they’re credit worthy or not. In 2021, few people understand that our entire economy works on the availability of credit. An AI platform that expands the ability for people to have access to more credit is very bullish. What’s more important is that they don’t necessarily replace the credit score, but work hand in hand with it and with the banks to enable more loans which translate to more income for their banking partners. They also acquired a vehicle e-commerce platform called Prodigy. Their philosophy is that they wanted to penetrate the vehicle market using their AI platform and try to offer more people loans to finance cars. I think this is genius, as it creates that all important fly wheel effect. I’m bullish, earnings expectations:
Revenue: $157.75m
Non-GAAP EPS: $.25
Full year revenue guidance: $601m
Market cap: $10.16B
Coinbase had a rough DPO and I think it has A TON to do with the general volatility of the crypto markets in general. I do not think this is stock is for the faint of heart because it will move a lot with Bitcoins price, which is volatile. You definitely have to have a long term outlook for this one. When looking long term, I think they’re a winner. They essentially act as both a crypto broker and an exchange. This means they own their own crypto but also allow other people to store their crypto on their platform. When it comes to revenue, they predominately make money from transaction fee’s. This basically means the more people buy and sell on their platform, the more money they make. This has led them to have some crazy margins with crazy profitability. I think they stay profitable, I think they become a long term winner but this earnings call all I am looking for is a general update on the state of the crypto markets and what they’re seeing. Expectations:
Revenue: $1.83B
Non-GAAP EPS: $2.57
Full year revenue guidance: $6.25B
Market cap: $53.9B
First, I think it’s important to say that I don’t fully understand this business model yet which is exactly why it’s on my radar. This new IPO’s financial metrics are stellar in terms of growth and profitability. However, with this growth and profitability I seriously wonder how long they have to continue growing or is this business reaching maturity. Currently, they act as a LinkedIn like social media platform for Doctors. They offer a solution for them to connect, find new jobs, exchange medical information, and even communicate directly with their patients through tele-health solutions. Where I hesitate is that they currently have about 80% of the total provider population on their platform and they are super niche’, meaning they may find it difficult to expand outside of the medical field long term. However, in the intermediate term they still have a strong runway for growth. They make money directly through pharmaceutical companies that pay for advertising space on this platform. I do think as they continue to increase engagement, the more pharma companies will want to partner with them, which will create more revenue. What I’m looking for in this earnings call is some sort of direction toward the innovations they’re working toward in their business. Expectations:
Revenue: $63.62m
Non-GAAP EPS: $.07
Full year revenue guidance: $277.84m
Market cap: $9.33B
Wednesday, things really start to heat up in particular with CPI Data that will really determine the outlook for small-caps and growth stocks in the short/intermediate term.
Inflation data is coming out this week and THIS IS IMPORTANT. I cannot emphasize how important this is because if inflation comes in hotter than expected again, no growth stock is going to move. Essentially what we’re looking at is this:
This what June’s CPI data release. What we saw is that inflation is running hot this summer, way too hot. If inflation continues to rise or even stay around .9% month over month, we could see the Fed taper sooner than expected. This will create a taper tantrum as the markets will adjust for less liquidity. This means a lot of growth and speculative stocks will see a drastic valuation reduction because capital will become more concentrated. However, if inflation sees a substantial tick down we will more than likely see a big bid for growth as the markets will price in a longer sustained QE and more dovish Fed. Let’s see if we can’t see something less than .6% MoM. My personal opinion, we get there because prices from my perspective have stabilized out and I trust our supply chain to get things together.
Because this business just de-spac’d there’s limited coverage of expectations from a numerical perspective. However, I have followed this business closely since they announced the merger a few months back. Let me start with this, I am extraordinarily excited about this business and this earnings call is something I’ve thought about since I first started looking into their business. What I’m looking for is transparency for this company. I want to see all their financial statements from top to bottom to see exactly how this business can be valued, currently that’s limited.
What Matterport does is unique and one of a kind. They’re a business that specializes in digital twin technology. More specifically, they allow people to take 3D images of any sort of space, store it on their platform, users who view this 3D image can essentially conduct a virtual walk through. Many may only think of this business as a real estate first kind of company. I like to think of them for what they really are, a spatial data company. The opportunity for their tech is limitless and more importantly, aside from exciting tech, they know how to sell and they know how to grow the company. What I am looking for specifically from this call is further transparency (like I mentioned above) as well as an idea of what their margins look like and the path to profitability. I am absolutely looking to start a position in any sort of sell off, after review of their data of course.
This. Business. Is. Interesting.
Stem is something special and they got something special. I’ve been following this company and tracking their performance as well as their development since the minute they announced a merger. I have traded in and out of this one, but I haven’t been able to hold on to this company for the same reason as Matterport; lack of financial transparency.
In this next earnings call, I am looking for additional transparency into their margins, their software (Athena) growth and their hardware business. I am very excited to see how this overall growth story is developing. But currently, as I understand it today, Stem is a renewable energy company. What they specialize in is energy saving and renewable energy containment. They sell hardware that’s similar to Sunnova $NOVA and Tesla $TSLA where it uses battery technology to store excess energy that doesn’t need to be used right now. However, their competitive differentiator is their AI software, Athena. What Athena does is optimize, monitor and manage energy storage to make the most of current output. In the age of renewable energy, this reigns supreme and has a massive secular tailwind behind it. There’s no financial projections to go off of (that I have access to) but I look forward to reviewing their 10-Q.
Last but certainly not least, we end this week with a BANG of a day on Thursday.
I love this business, I absolutely love this business. Grow Generation has been a BluSuit favorite for at least a year. They’re the leading hydroponics supplier in North America and have grown exponentially for years with flawless execution. I like to think of them as a supply chain business, rather than just a store. They’ve intricately created a huge network of stores, with distribution centers close by, to be the premier supplier for both recreational growers and businesses. They run things through their in person stores mostly, with a Home Depot like approach and they also have their e-commerce website that’s growing exponentially as well. I’m not sure exactly how big they can become, but with this earnings, I think we may get a higher multiple after this beat. This is one business I’m not concerned about, I think it’s likely we get a beat and raise. Expectations below:
Revenue: $110.64m
Non-GAAP EPS: $.12
Full year revenue guidance: $462.01m
Market cap: $2.5B
I am fairly certain that there’s quite a few folks who are reading just to see what’s said about Palantir. I’ll start off by saying I think we get a beat on Non-GAAP EPS, revenue and they’ll do guidance of “30% YoY for the next 5 years”. I still think they’re sand bagging, big time. What they’re doing right now, today, for tomorrow, is incredible. They operate the leading software company that can do many different functions such as predictive analytics, AI processing, data management, security and storage. Everything is run through Apollo, which acts a lot like Jarvis on Iron Man. From Apollo, they have two different offerings Gotham and Foundry. Gotham is their government portion of their business and Foundry is their commercial/enterprise. The thing that really makes me believe in this company, is that with the moves they’ve made, I think they’re about to start seeing revenue acceleration through their various expanded product offerings for the private sector. I’ll leave the rest for a write up post earnings for all you guys, expectations:
Revenue: $361.1m
Non-GAAP EPS: $.03
Full year revenue guidance: $1.48B
Market cap: $41B
I am a user of SoFi and genuinely enjoy their product offerings. However, their story barely begins or ends with their financial services products. SoFi has three major business arms: lending, financial services, and Galileo. Their lending portion of their business is the largest, currently, but most mature aspect to their business. I anticipate on this being more of an enabler rather than a driver for the business moving forward. Their financial services portion is essentially what you and I, the consumer, uses. This offers stock trading, a checking account, a credit card, crypto trading, loan management, credit score monitoring, and more. Galileo is essentially their fin-tech enablement platform where it hosts and powers businesses like Robinhood, Dave, and it’s very own SoFi. Both Galileo and their financial services portion of their business are real growth drivers. Basically, this FinTech is looking to disrupt the way we manage finances and Banks are definitely concerned about this one. Expectations:
Revenue: $218.6m
Non-GAAP EPS: -$.05
Full year revenue guidance: $973m
Market cap: $13.28B
Conclusion:
This week is going to be a good one, buckle up for a heck of a ride folks.